Recently there was a huge scam in which Twitter accounts of prominent figures like President Barack Obama, Joe Biden, Elon Musk, Bill Gates, Kanye West, and Michael Bloomberg getting hacked. It was actually a type of cryptocurrency scams where fake tweets were put on their verified accounts to reach a larger audience.
In the fake tweet, followers were asked to send money to a particular address using Bitcoin and in return, they would get twice the amount. This type of cryptocurrency scam is quite common and you should be aware of all the fraudulent methods scammers resort to for tricking unsuspecting people. This is why I have compiled various different ways on how to avoid cryptocurrency scams:
- Fake Crypto Investment Platforms
- Giveaways Scams Via Tweets & Other Social Media Updates
- Scamming Emails, Phishing, Technical Support, Impersonation Scams
- Investment Scams
- Loader or Load-up Scams
- Initial Coin Offerings (ICOs)
- Unregulated Brokers & Exchanges
- Bitcoin Trading Systems
- Mining Scams
- Pump and Dump schemes
Let’s discuss these in detail:
How To Avoid Cryptocurrency Scams?
1. Fake Crypto Investment Platforms
There is a large number of fake websites or mobile apps that have been created to resemble authentic crypto investment companies. But there are several ways to identify a fake website. For instance, you should always look for the small lock icon indicating security near the URL bar and avoid sites that have no “https” in the site address. Sometimes, attackers create a fake URL by replacing one letter of the address. For instance, they can replace a zero in it instead of the letter ‘o’ which can lead you to a fake site.
Another common method used by hackers is to create fake mobile apps that have similar names and UI as the authentic ones. Before you enter your login credentials on any platform, you should double-check whether the app or website is a safe and secure one.
2. Giveaways Scams Via Tweets & Other Social Media Updates
Just like the recent fake cryptocurrency scam that took place on Twitter, one can fall prey to dubious schemes via misleading tweets or Facebook or any other social media updates. If you see a social media post offering a cryptocurrency deal that’s too good to be true, the chances are that it’s fake.
3. Scamming Emails, Phishing, Technical Support, Impersonation Scams
Now this one is a common method that each one of us must have come across. You probably get a lot of spam emails or calls impersonating your bank and trying to fish out your login credentials or other sensitive info. Similarly, attackers can show up as your legitimate cryptocurrency company in your inbox with identical logos and branding.
They often come with malicious links or files so you should never click on a link inside such emails or messages. Scammers go as far as to announce fake ICOs, or initial coin offerings, to steal funds. Don’t fall for these fake emails and website offers. Take your time to look over all the details. Also, keep these points in mind:
- Never give remote access to your machine to support staff or anyone else for that matter
- Do not share your 2FA (2-Factor Authentication) security codes or passwords
- Never accept outbound calls asking for your confidential personal information
- Scammers can spoof legitimate phone numbers as well
4. Investment Scams
Scammers often set up seemingly legitimate platforms that claim to offer high, and often unrealistic returns if you send cryptocurrency. In such cases it’s advised to take certain precautions:
- It’s okay to be skeptical of websites or services promising high returns
- Send cryptocurrency to known and trusted third parties only
- In case of a new contact, research the organization thoroughly to verify its authenticity
5. Loader or Load-up Scams
Cryptocurrency scammers usually offer “loading” services on a variety of platforms. They claim that they require Coinbase accounts with high limits, and in return, promise to offer the victim a portion of the proceeds. In such cases, they use stolen credit cards on compromised accounts to sustain payment fraud.
In the end, the victim is left with payment delinquencies after the actual cardholder discovers the fraud. By then, the scammer steals any available cryptocurrencies and levies unauthorized charges on verified payment methods.
6. Initial Coin Offerings (ICOs)
Initial Coin Offerings are basically fundraising mechanisms for newly launched cryptocurrencies. Investors in ICOs receive tokens in the new venture. Investors pour billions of dollars into ICOs each year. There are several ICOs that are legitimate, there are several who have no real business plans or technology behind them.
In fact, many get launched with nothing more than a whitepaper by individuals with no technology or industry experience. So you should be very careful before investing in ICOs no matter how great the promises are.
7. Unregulated Brokers & Exchanges
There are dozens, if not hundreds, of unregulated online exchanges and brokerage firms that offer cryptocurrencies and cryptocurrency trading products. Once again, you should be wary of too-good-to-be-true promotions and promises of quick riches as it could be just another cryptocurrency scams.
Once you invest money, this type of firm will charge you outrageous commissions or make it very difficult to withdraw funds. In a worst-case scenario, they can simply steal your money.
8. Mining Scams
Any regular investor can mine cryptocurrencies via cloud mining that works without expensive hardware. There are several cloud mining services that let users rent server space at a fixed rate to mine altcoins.
Now, this sounds like a lucrative option to mine altcoins like Bitcoin sitting at home without investing in hardware. But as a first-time investor, how would find out if the services are genuine, or are they just running cryptocurrency scams to steal your hard-earned money?
Well, one method to identify the fake ones is by analyzing their lofty promises. They tend to promise high returns on your investment and never mention the hidden fee that is applicable to the returns. They design their systems smartly to keep on sucking money from unsuspecting investors.
In reality, no genuine company can guarantee such huge profits. So always be vigilant before signing up for cloud mining servers. Also, make sure that your data doesn’t get compromised when you are on a shared server.
9. Pump and Dump schemes
To avoid suspicion and make the opportunity lucrative, cryptocurrency scammers buy a new altcoin in large proportion. This increases the market price of the cryptocurrency for some time and triggers a fake sense of good returns among other investors.
As soon as the unsuspecting investors begin to invest in the new coin and the prices shoot up higher, the scammers sell their share of coins for a higher price. Thus they not only retrieve the money they initially invested but also end up gathering more than that.
If we talk about securities market, pumping and dumping is illegal. But when it comes to cryptocurrencies, it falls in the grey zone. To avoid getting duped by pump and dump schemes, you should try to choose a more popular and stable coin to avoid falling into cryptocurrency scams.
The post 9 Ways To Avoid Cryptocurrency Scams|Beware Of Bitcoin Scams appeared first on Fossbytes.
9 Ways To Avoid Cryptocurrency Scams|Beware Of Bitcoin Scams
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