A cryptocurrency, a form of digital money has seen tremendous growth in the last few years. But this new-era digital monetary currency has a lot of risks involved.
And here, we are not talking about just the volatility and uncertainty of the market, but the online cryptocurrency scams that are rising daily. The scams are everywhere, and cryptocurrency is no different.
As cryptocurrency is all virtual, it is not regulated or backed by any central entity like banks, or financial institutions. People mostly buy a cryptocurrency for investment, while others use it to do online transactions without having to pay a transaction fee.
If you’re too planning to invest in these digital assets, the first thing you should about is cryptocurrency scams. Continue reading this article till the end to learn more about cryptocurrency scams and how to avoid them. So, let’s start now!
What Are Cryptocurrency Scams?
Cryptocurrency Scams are a type of investment fraud, carried out by scammers looking to steal money from the people, who want to invest in cryptocurrencies such as Bitcoin, Ether, etc.
The cases of reported scams are increasing year after year. According to the report, the estimated crypto fraud was reported approx $14 Billion in 2021. As the crypto world is full of scammers, there are several ways to avoid them.
Top 5 Cryptocurrency Scams To Watch Out For:
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 frauds. The US Commodity Trading Commission has warned investors of these kinds of scams where the scammers use chat rooms and push messages to manipulate people.
Scammers may dupe investors by following odd tactics:
- 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 an enormous payout that might double your money
Here is a list of some common cryptocurrency scams:
Phoney Websites:
You might be an expert at investing, but you are sure to come across an imposter one day or the other. How to recognize a scam website? If the small lock and the “https” in the URL are missing, it might be a cryptocurrency scam website.
In addition, there are several websites that look exactly like the original. So take every step cautiously.
Fake Mobile Applications:
Another common way to scam investors is with fake mobile apps that are available on Google’s Play Store and Apple’s App Store. However, most experienced investors easily find such applications and remove them from their phones. But still, there are a relative amount of cryptocurrency scams taking place through such apps.
It would be best if you watched out for inauthentic branding, misspelled brand names and copy, and a change in the original logo shape or color.
Fraudulent Emails:
Emails have always been one of the massive tools for all kinds of scams. Therefore, you need to be super careful and look out for signs all over.
Does the brand name or logo look 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 and initial coin offerings. 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 from social media handles like Twitter and Facebook. Especially when what they are offering is beyond exaggeration or beyond what can be offered.
Malicious bots are good at 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.
Cryptojacking:
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, and crashes, it might be the case of cryptojacking.
Tips To Avoid Cryptojacking-
- 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.
How To Avoid Cryptocurrency Scams?
Falling for cryptocurrency scams can be a devasting experience. However, there are several ways to avoid them. So, start with a few tips to help protect yourself from these types of scams:
Keep Your Cryptocurrency in Cold Wallet:
When you buy cryptocurrencies, you either have two wallet options to store them: Hot and Cold Wallets. To avoid getting scammed, we suggest you to keep your digital currency in cold wallets only as they are not easily accessible by fraudsters.
Take Your Time:
As scammers use odd tactics to dupe you, they may offer you bonuses or discounts if you invest with them quickly. But instead of falling for these lucrative offers, we suggest you to take your time and do your own research about these bonuses and discounts.
Beware Of Fake Social Media Ads:
Most crypto scammers use social media platforms to promote their schemes. They often use pictures of celebrities to make it look like a genuine scheme. But you should not fall for these fake advertisements.
Avoid Sharing Your Details On Call:
Apart from social media, scammers also use cold calling techniques to dupe investors. If you got a call from an unknown source willing to buy your cryptocurrency investment, we suggest you avoid it as it might be a scam. Never share your personal or account information with anyone.
Do Your Research:
If you’re unfamiliar with cryptocurrency, do some study on it. See if there’s a whitepaper you can read, learn who controls it and how it works, and check for credible reviews and testimonials. To avoid being a victim of a scam, look for an up-to-date and reliable false cryptocurrency list.
Choose A Reliable Brokerage Platform Only:
This is the most crucial step to avoiding potential cryptocurrency scams. There are many fake online brokerage platforms that flee away with their clients’ money. So, we recommend you choose reliable and reputed brokerage or exchange platforms.
Here’s a list of some reliable crypto exchange or brokerage platforms:
- Kraken
- InvestBy
- WhiteBit
- XBO
- ABInvesting
What To Do After Falling Victim To A Cryptocurrency Scam?
Crypto fraudsters frequently sell the information they get from you. To avoid future harm, it’s critical to update your usernames and passwords across the board. Alternatively, you should contact your bank if you have your account information with someone.
You can report a social media crypto scam to the appropriate social media network if you are a victim. You can report frauds to the appropriate authority in your jurisdiction, depending on where you live — for the US, you can contact:
- The FTC at ftc.gov/complaint
- The Commodity Futures Trading Commission (CFTC) at 866-366-2382 or at CFTC.gov/TipOrComplaint
Bottom Line:
Scams are everywhere, but crypto investors may reduce their risk of falling victim to market manipulation by being aware of these scams and taking proactive precautions.
Using reputable exchanges such as InvestBy and conducting comprehensive research before making any investment decisions are the best ways to avoid cryptocurrency scams. Alternatively, you can report a fraud to the Federal Trade Commission if you fall victim to it.
