Avoid 10 Common Crypto Scams
With cryptocurrency entering the mainstream culture, scams involving cryptocurrencies are becoming more prevalent. The area is a fertile ground for scams because cryptocurrencies are complex and can yield significant gains, piquing people’s curiosity.
As the price of cryptocurrencies continues to increase, so does the number of crypto frauds. Cryptocurrency scams come in all different forms and are continually evolving, which is why many naive people and businesses get reeled in.
The Most Common Crypto Scams
This list describes common crypto scams but does not cover every play in a big book of crypto fraud.
Hackers can access digital wallets, companies creating coins, and even transfers. Although no one is safe from hacking, keeping your money and savings spread across multiple accounts or digital wallets is generally a good idea to minimize your loss if one is hacked.
- Giveaway Crypto Scams
A scam as old as time, scammers will come up with incentives, even celebrities and pretending to be celebrities or famous investors, to persuade naive people to hand over their crypto. These frauds tend to surface on social media and messaging platforms, such as WhatsApp, Twitter, WeChat, Telegram, and other messaging apps.
Phishing is another classic scam that involves sending emails to deceive consumers and collect their personal information. Even though a phony company sends the email with the intention of stealing your money, it may appear to have come from a legitimate cryptocurrency company. Never click an email link asking for your information.
- Fake cryptocurrency wallets
Hackers developed a scheme to sell phony crypto wallets online, which take users’ coins instead of protecting them.
- Exit Scams
Also referred to as an initial coin offering (ICO) scam, an exit scam involves fraudsters who pretend to have created a promising new type of cryptocurrency that will bring huge returns. But after amassing enough cash, the scammers disappear with the money from investors.
- Social Media Scams
Hackers can construct phony accounts that impersonate trustworthy sources. People tend to let their guard down when they believe offers from social media accounts like Facebook and Twitter.
- Ponzi schemes
A well-known scam involves the promise of significant gains from promised investments. In a Ponzi scheme, the person responsible for the fraud can earn more money the more investors they bring on board. However, the money is not being properly invested, and the investors lose everything. Many fall for this scam because it promises quick returns and risk-free investments.
- SIM hacking
By accessing your phone or SIM, hackers can gain access to your cryptocurrency wallet. Avoiding text messages, calls, or emails that ask for your personal information is a good tactic to stop scammers from stealing your bitcoins.
Coinjacking refers to hackers stealthily utilizing your computer to mine cryptocurrencies. Using unwary users’ machines, coinjackers can establish massive mining pools. Most cryptojacking programs can be thwarted by installing ad blocker software.
Last but not least, hackers can infect your cryptocurrency accounts with a damaging tool called “worms” by tricking you into downloading malware onto your phone or computer. Malware can take your private data and cause you to lose your cryptocurrency. When browsing websites, social media, and emails, avoid clicking on questionable links.