The discussion around cryptocurrency is now quite popular, and there is a lot of excitement surrounding this topic.
In this guest post, we will go through eight different cryptocurrency-related scams that companies need to steer clear of.
What is a Cryptocurrency Scam?
As a result of Elon Musk’s tweets promoting Dogecoin, the cryptocurrency’s price saw a significant increase. These tweets became headline news.
8 Cryptocurrency Scams to Watch Out For
Scams using cryptocurrencies result daily in the loss of many millions of dollars. To assist you in avoiding falling prey to the shadier side of the crypto market, here’s a list of the eight most prevalent scams that you should be on the lookout for!
Downloaded Scam Applications Relating to Cryptocurrency
The fraudulent use of cryptocurrencies may also take the form of phony mobile applications that falsely claim to have connection to a certain coin. They are con artists attempting to defraud you of your money or your personal information.
How to Keep Away?
You may prevent falling victim to these scams by ensuring that any cryptocurrency applications you download come from reliable sources. If this is not possible, you should investigate the app before downloading it to ensure that it is genuine.
Scams Based on Phishing
Scams using phishing are yet another prevalent kind of bitcoin swindle. Someone is trying to fool you into giving them your personal information, such as your login credentials or your credit card number. This one is a sort of social engineering.
How to Stay Clear of It?
You may evade falling victim to these by exercising extreme caution concerning the websites that you visit and the emails that you read. You may perform a fast search on Google to discover if other people have reported a website as a scam if you are unsure as to whether a certain website is genuine. In addition, you should never click on links that are sent to you by email or text message from somebody you do not know.
Digital Games & Collectibles
Convincing you to pay money to con artists via the use of a giveaway scam is a sort of social engineering known as “social engineering.†A specialized subset of giveaway scams involves the offering of digital goods such as games and collectibles. These scams often take place on well-known social media platforms such as YouTube and Instagram.
Someone may try to deceive you into giving them your money or private information by telling you that they will offer you a digital game or collectible for free. For example, they may promise to provide you with skin for your favourite game or a rare Pokémon card in exchange for your information.
One such incident in which this took place was the con involving the squid game. It is also known as a rug pull case, which refers to a deceptive strategy in which crypto engineers quit projects and abscond with the monies invested by investors. In the world of new crypto schemes, rug pulls are observed rather often.
During this time, a crypto exchange business began an investigation into the Squid token and froze the wallet addresses of all the token developers. This investigation is still ongoing. Before all was said and done, it is believed that the masterminds behind the plan got off with $3.3 million in illicit profits.
Does it imply that everything about such a thing has been finished? Not even close. Unfortunately, competent programmers now can construct fictitious worlds and games on the blockchain, and they can begin the next social engineering assault as soon as the next popular Netflix show is released.
How to Keep Clear?
Again, doing in-depth research is the most effective method forwarding against the deception of this kind. Be aware of the people you are interacting with as well as the situation you are putting yourself in. Be very sceptical of anybody who assures you that they will give you a valuable or rare item for free. It is quite likely to be a hoax.
Idealistic Con Artists
Scams using trading cryptocurrency are rampant on dating apps, and according to the Federal Trade Commission, between October 2020 and March 2021, almost 20% of the money stolen by con artists via romantic scams was transferred through cryptocurrencies to phony accounts (FTC). If you are in a digital connection with someone and they ask for cash or presents early in the relationship, this is a red flag that you may be participating in a scam of this kind.
How to Stay Well Away?
Being wary of everyone you encounter on the internet is the most effective way to prevent falling victim to this con.
Ponzi Schemes
Thanks to Bernie Madoff, a former chairman of the NASDAQ who stole billions of dollars’ worth of funds from his investors before he was sentenced to jail, the fifth fraud on our list is one of the most well-known business opportunity scams. Bernie Madoff is responsible for this hoax.
Ponzi schemes, which are illegitimate investment operations in which the operator creates returns for older investors using income supplied by new investors, is what Madoff engaged in. It is sometimes referred to as a pyramid scheme; the little point at the very top of the pyramid indicates the promoters who earn money off the enormous base of investors at the very bottom of the pyramid.
What are some warning signs that they could have?
These kinds of currency scams often offer substantial or even absolute returns for crypto investors.
How can One Avoid It?
Schemes for multilevel marketing (MLM)
A genuine multi-level marketing company, on the other hand, generates revenue from the sale of goods or services. Many trading cryptocurrency multi-level marketing (MLM) scams make lofty profit projections but don’t really provide any goods or services for sale.
How to take proper care?
Pump and Dump
The phrase “pump and dump†refers to yet another kind of prevalent trading cryptocurrency fraud. After that, after the price has increased to a certain point, they sell everything. This is something that often occurs on lower-volume coins, which are coins that are smaller in size and less well-known. Scammers often promote a currency on social media to drive up its price, at which point they sell the coin for a profit.
How to Stay Well Away?
First and foremost, you should educate yourself on the inner workings of Bitcoin by doing some research in this area.
Cons that Target Cryptocurrency Investors
Scams involving investments in cryptocurrencies con many individuals into falling for them.
This scam is commonplace in the world of initial coin offerings (ICOs). Initiated Coin Offerings (ICOs) are events that take place when a corporation gives investors tokens in return for money.
How can One Escape This?
Be cautious of websites and other businesses that offer unattainable levels of return on investment or other types of opportunities. When it comes to everything else on this list, if anything about an initial coin offering (ICO) seems too good to be true, you can bet that it probably is. Never transmit bitcoin to anybody who isn’t a known and trustworthy third party.
The Bottom Line
Be mindful of falling for any of the many coin scams that are now circulating.