Cryptocurrency Scams And How to Avoid Them – Bitcoin scams have risen in line with the public interest in cryptocurrency investing. The amount of cryptocurrency held by the average investor increased by more than 15% between 2020 and 2021, according to the Financial Conduct Authority.
However, scammers of all sizes have taken advantage of investors’ fear of missing out on this hot new market.
Is crypto safe?
Even seasoned investors frequently inquire about the safety of bitcoin. There are always thieves attempting to profit on investors’ enthusiasm to earn and their lack of experience, just as there are with any other popular investment.
Cryptocurrencies, particularly bitcoin, are all the rage these days. They’ve generated returns that investors in the S & P 500 or the FTSE 100 could only dream of.
Scammers will inevitably flock to this area. It might be difficult to distinguish between hackers and those who are simply adept.
It is impossible to remove or undo a block once it has been added to the chain’s terminus.
A golden copy of the proper ledger of transactions is shared by all the machines that safeguard the network. For maintaining a blockchain safe and up to date, they are rewarded in the blockchain’s internal money, such as bitcoin or ether.
However, most investors aren’t asking that question. Scams, wrongdoings, and ransom demands have all exploited cryptocurrency as a payment option.
The 2017 NHS ransomware attack is the most well-known example. As a result of this, the UK’s emergency medical services were shut down as part of a global cyber strike.
Spotting a Cryptocurrency Scam
The following is a list of the most common types of bitcoin fraud. The greatest method to protect yourself, like with any investment decision, is to:
• Do not take any information at face value
• Always be curious
• Always make your research before carrying out any financial transactions
Coinbase is among the most well-known bitcoin exchanges in the world. In April 2021, the exchange came out publicly on the Nasdaq stock exchange in the United States. However, because of its widespread use, it is now being utilized in phishing scams via SMS and email.
The goal of this type of scam is to convince the potential victim to click on a malicious link. By visiting that dodgy website, attackers can infect their target’s phone or computer with malware or other computer nasties, harvesting their data or stealing other personal information.
When it comes to money, we generally prefer to rely on somebody who knows more than we do. This is where crypto-technical-support fraud enters the picture.
In 2018, the FBI issued a warning about scammers appearing as cryptocurrency exchange support employees, earning victims’ trust, and then stealing their digital currency deposits.
In this situation, the scammer’s goal is to obtain the password that opens your cryptocurrency digital wallet. This enables them to steal the cryptocurrency by sending it to a different wallet.
The best secure cryptocurrency wallet is a point of contention. MetaMask, a software wallet with five million monthly active users, is one of the most popular.
It is always linked to the internet and is available as a browser extension for Google Chrome or Mozilla Firefox, as well as a mobile app.
Others swear by hardware (offline) wallets like the Trezor Model One and Ledger Nano, which are industry leaders.
We all enjoy getting something free. And it’s for this reason that giveaways are one of the most successful techniques of cryptocurrency theft.
In one typical scam, victims are informed that sending their crypto to a celebrity — who is, of course, a phony — will quadruple their money. In May 2021, the US Federal Trade Commission told Reuters that in just six months, $2 million (£1.45 million) had been wired to Elon Musk impersonators.
Scammers that promise crypto via “airdrops” — in other words, free money transferred to your cryptocurrency wallet are well-known on Telegram and Twitter.
The worst part is that victims are frequently coerced to give sensitive personal information or are defrauded of their own cryptocurrency.
Crypto Phishing Scams
Scams involving cryptocurrency are similar to those involving forged emails, SMS texts from an unknown number, or any other annoying fraud. They’re a depressingly common occurrence.
Cryptocurrency Ponzi and pyramid schemes are two types of Ponzi schemes.
Reports of people making large sums of money with cryptocurrencies naturally attract more investors.
However, opportunists are waiting to steal your cryptocurrency through a standard Ponzi scheme.
Instead of being invested in assets to create returns, money from new investors is used to pay earlier investors what they believe to be large profits, luring in more supporters. During this procedure, the scammer takes a portion of the money for themselves.