Cryptocurrency scams: what you need to know

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Cryptocurrency scams: what you need to know
The burgeoning world of cryptocurrency is home to a lot of fraudulent activity with scammers aiming to profit from users who are new to crypto. Not only newbies can fall for a scam’s tricks – some scams can prove to be very convincing and bring down anyone in the crypto sphere.

In this article we will help you to be aware of the common scams and keep your cryptocurrencies safe online.

What is cryptocurrency fraud?
Cryptocurrency fraud is a fraudulent activity in the crypto industry where the perpetrator seeks financial or personal gain. Internet scammers and hackers try to make easy money from unsuspecting victims by tricking them into doing something e.g. B. clicking on a link or providing personal information to gain access to their finances.

In cryptocurrency scams, thieves often try to break into a victim’s digital wallet to access their crypto holdings. They can usually gain access to a wallet by asking you to connect your wallet to a fraudulent website or by tricking you into handing over your wallet’s private keys.

What are the different types of cryptocurrency scams to look out for?

phishing scam
Phishing scams are nothing new, but people still fall victim to them every day. A phishing scam can look like a malicious link in an email or a fake website that can sometimes subtly look like its legitimate counterpart. The link or website can be set up to steal your personal information such as your private crypto wallet keys or internet passwords.

Man-in-the-middle attacks
Similar to phishing scams, man-in-the-middle attacks are a way for scammers to steal your personal information. Instead of links, the man-in-the-middle will intercept a Wi-Fi connection on a public network to gain access to your cryptocurrency wallet or personal account information. To prevent this from happening, make sure you use a VPN to protect your data when creating one Crypto deposits at Ignition Casino.

Investment Manager
Scammers can pose as investment managers promising to help you make huge profits from your portfolio. These bad actors will encourage you to send them cryptocurrency and they can claim that they can increase the value by 50x. “However, if you comply with their request, say goodbye to your crypto,” she warns Forbes Advisor. The scammer is likely to fool multiple people with this type of scam and then disappear with everyone’s crypto.

market manipulation
Market manipulation is no stranger to crypto markets. This is where techniques are used to fool investors by artificially increasing or decreasing the price of a crypto coin or token, resulting in huge buying or selling by investors. Market manipulation techniques include spreading false information on the internet or artificially increasing trading volume so that the coin appears more in demand.

Pump and dump schemes
This is happening in both the traditional stock market and the crypto markets. A pump-and-dump scheme is when a coin’s owners sell all of their holdings when a coin hits the market. This leads to an artificial price spike that drops immediately after the Initial Coin Offering (ICO) ends. These schemes can be exacerbated by false claims surrounding a project that draw a lot of attention.

carpet pulls
This fraudulent act is known to be perpetrated by project creators where they build a project and encourage many people to participate in pre-sale token purchase. After the token is sold and all the funds are collected from unsuspecting investors, the scammers disappear with the money and the project ceases to exist.

How can you avoid crypto scams and scams?
In 2021 alone, over 46,000 people reported being involved in cryptocurrency scams To deceive. That’s a staggering sum and these scams cost around $1 billion falling into the hands of scammers.

Here are a few options stay safe and alert in the crypto space:

  • Ignore all unsolicited messages – scammers often send promises that are too good to be true on Twitter and Discord.
  • Check the link before you click it – make sure you trust any crypto-related link before you click it.
  • Always do your research – before investing in any coin, make sure you know a lot about the company you are investing in and trust the team behind it.
  • Never share your private key or seed phrase with anyone – store the information offline in a safe place.
  • Check the website address – Scammers often change a letter or number in the address to make it look like a legitimate website.
  • Treat everything with extreme caution – you need to feel confident about any payment request or investment opportunity before executing it.

Investing in crypto can be fun and profitable, but it’s always important to be cautious and remember that this is real money and you can lose it.

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