Cryptocurrency Scams: The new-era digital monetary currency, called cryptocurrency, has a lot of risks involved. And here, the talk is not about just the volatility and uncertainty of the market, but the online scams that are rising daily. These scams are a way of the new age technology, and cryptocurrency is no different.
Cryptocurrency is all virtual. There is no physical entity like banks, financial institutions involved. Some well-known Cryptocurrencies are bitcoin and ether, but there are other new ones in the market too. People mostly buy a cryptocurrency for investment. Some people use cryptocurrency to do online transactions without having to give the transaction fee. It can be purchased through credit card payment or through a process called “mining.” It is stored in your mobile, computer, or any other hardware in a digital wallet.
Things You Must Learn Cryptocurrency Before Investing Right Away
Before you go about investing, know that it is not at all similar to using your traditional currency. Moreover, scammers are requesting people to pay via cryptocurrency for the reason that the payment once done is irreversible.
Not Backed Up By The Government: Unlike the physical money that is backed up by the government, this virtual currency is driven entirely by the curves of demand and supply. This can create fluctuations, and in turn, might make profits or losses for investors. Moreover, cryptocurrency investments are very flexible and have fewer regulations and protection as compared to other financial assets like stock, mutual funds or bonds. When you store your cryptocurrency in the digital wallet of a company, and the company goes bankrupt or out of business, the government won’t be able to help you get your money back.
Unstable Value: The value of cryptocurrency fluctuates very frequently. It changes by the hour. Sometimes when the value of this currency goes down, there is no assurance that it will go up again.
As more people are going for this new-age currency, scammers are finding more ways to get under the bridge. Most scams are mostly an exaggeration of what could happen in real life.
It is widely seen that most of the scams are just new versions of the old, vintage frauds. The commodity trading commission from America has warned investors of these kinds of scams where the scammers use chat rooms, push messages to manipulate people.
One needs to stay away from the following deals while investing in cryptocurrency
- unclear or blur claims about a company with no specifications
- assuring free money
- gives you the assurance that you will make a particular amount if you invest
- the promise of enormous payout that might double your money
Here is a list of some common cryptocurrency scams and how you can avoid them
You might be an expert at investing, but you are sure to come across imposter one day or the other. How to recognize a sham website? If the small lock and the “https” in the URL are missing, it’s a scam website. There is n number of websites that look exactly like the original. So take every step cautiously.
Fake Mobile Applications
Another common way to trick people is with fake apps that are present in the play store and apple store. Most stakeholders easily find such application and get them removes. But still, there are a relative amount of crypto scams taking place through such apps.
It would be best if you watched out for inauthentic branding, misspelt brand names and copy, change in the original logo shape or colour.
Emails have always been one of the massive scam tools for all kind of shams. Therefore, you need to be super careful and look out for signs all over. Does the brand name or logo sound inappropriate? Is the email id linked to the correct and legitimate company? If you have second thoughts about the company that sent the mail, connect the dots and ask someone who works there.
Most scammers use emails to announce phoney ICOs, initial coin offering. It is very important to take time and do the research.
Dull Social Media Updates and Tweets
Fake accounts are panned out everywhere, even on social media. Never trust offers that come on social media handles like Twitter and Facebook. Especially when what they are offering is beyond the exaggeration or beyond what can be offered.
Malicious bots are good with making it seem legitimate. If you even invest a small amount in it, it is most likely that you will never see that money again in your life.
Here, the scammers use the processing power of your phone or computer to get through it and use the cryptocurrency to their benefit. If you visit a scam website, the scammers can put some fraudulent code on your device and help themselves through without you even noticing.
If your device hangs a lot, is slower than usual, crashes, it might be the case of cryptojacking. These tips might help –
- Shut down the sites and delete apps that slow your battery
- Install antivirus software
- Please do not click on links without having a clue about where they lead.
Reporting the Scams
You can report the frauds here
The FTC at ftc.gov/complaint
The Commodity Futures Trading Commission (CFTC) at 866-366-2382 or at CFTC.gov/TipOrComplaint