HOW TO AVOID CRYPTOCURRENCY SCAM
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The enormous growth of cryptocurrencies in recent years has created a ton of opportunities for fraud. Scammers are constantly seeking for new ways to take your money. Fraudsters stole $14 billion in cryptocurrency in a year, according to research by blockchain data company Chainalysis.
It’s critical to be aware of the risks if you’re interested in cryptocurrencies. Continue reading to learn more about typical cryptocurrency scams, how to recognize them, and how to prevent them.
CRYPTOCURRENCY INVESTMENT SCAM
Cryptocurrency scams come in a wide variety. Among the most typical are:
- FAKE APPS
Scammers frequently use bogus apps that can be downloaded from Google Play and the Apple App Store to deceive cryptocurrency investors. These bogus apps are swiftly identified and taken down, but that doesn’t mean they aren’t having an effect on many bottom lines. Numerous users have downloaded phony cryptocurrency apps and fell victim to them.
- Phony websites
In order to deceive their victims, scammers may develop phony cryptocurrency trading websites or imitations of legitimate cryptocurrency wallets. These phony websites frequently have domain names that are somewhat similar to those of the real websites they are meant to imitate. It is challenging to distinguish between them because they resemble trustworthy websites so much. The two main methods used by fake cryptocurrency websites are:
- Phishing pages: all the information you provide, including your crypto wallet’s password, recovery phrase, and other financial credentials, is obtained by fraudsters.
- Taking theft as an example: You might be able to withdraw a little sum of money at first through the website. You might increase your investment in the site as your current investments appear to be doing well. However, the site either closes down or rejects your request when you later wish to withdraw your money.
- Gift-giving fraud
In what is known as a giveaway scam, the con artists here claim to equal or multiply the cryptocurrency handed to them. Clever messaging from what frequently appears to be a legitimate social media account can engender a sense of legitimacy and urgency. People may transfer money rapidly in the hopes of receiving an immediate return due to this allegedly “once-in-a-lifetime” chance.
- Fake Initial Coin Offerings
Startup cryptocurrency businesses can acquire funds from potential customers through an initial coin offering, or ICO. In exchange for paying active cryptocurrencies like bitcoin or another well-known cryptocurrency, buyers are frequently promised a discount on the new crypto coins. Many initial coin offerings (ICOs) have proven to be fraudulent, with criminals making elaborate efforts to defraud investors. Examples include hiring up bogus offices and producing upscale marketing materials.
HOW TO AVOID CRYPTOCURRENCY SCAM
Cryptocurrency frauds are common and often very well done. The following actions can be taken to safeguard yourself:
- Keep an eye on your wallet app: When sending money for the first time, send a little amount to verify the app’s validity. If you observe strange behavior while updating your wallet app, stop updating and delete the app.
- Keep your wallet safe: A wallet with private keys is required to invest in cryptocurrencies, so keep it secure. It’s quite likely a fraud if a company requests your keys in order for you to take part in an investment opportunity. Secure the keys to your wallet.
- Do your own Research (DYOR): The most widely used cryptocurrencies are not con artists. However, if you’ve never heard of a specific cryptocurrency, do some research on it. Check to see if there’s a whitepaper you can read, learn who controls it and how it functions, and check for real reviews and endorsements. To check for scams, find an accurate and reliable list of bogus cryptocurrencies.
- Just invest in items you are familiar with: It is important to take a break and conduct additional study if you are unsure of how a specific cryptocurrency operates before deciding whether or not to invest.
Lastly, never use money you can’t afford to lose on an investing opportunity. Understanding the risks is crucial because cryptocurrency is speculative and volatile even if you aren’t being scammed.