How to Not Be a Victim of Crypto Scams
While some people are major crypto enthusiasts, others stay away from cryptocurrencies because there are too many scammers on the internet. In recent years, many people have paid a lot of money for established cryptocurrencies like Bitcoin.
You may have sold high while buying low to make a lot of money. Although this is a clever move to generate extra income, you may be susceptible to crypto scams. Other people watching your gains may be jealous enough to try and steal your coins and wealth.
Cryptocurrency scams are always on the rise because more and more investors keep jumping on the bandwagon in hopes of a significant windfall. If you want to keep investing safely in cryptocurrencies without falling for Bitcoin scams, here is everything you need to know to protect yourself.
What Is Cryptocurrency?
Cryptocurrencies or crypto are digital tokens. These can be used for payment like regular money if they are accepted by a merchant. The main difference between cryptocurrency and the notes you have in your wallet is that you need to store Bitcoin, Ethereum, Dogecoin, or any other tokens in a “digital wallet.”
Some businesses will accept them if you want to pay for products or services. However, since cryptocurrencies have shown how many people make money and become multimillionaires, many people are jumping on the bandwagon.
You can buy or sell cryptocurrencies through online platforms. The transactions will be made with blockchain technology. This is an extensive database system that makes it easy to trade coins.
However, it is also one of the main reasons why transacting in crypto has become more frightening in recent years. Newcomers to the world of cryptocurrencies are more prone to falling for scams that plague the entire blockchain ecosystem. Some cryptocurrency scams are more obvious than others, but people should still be careful.
Types of Crypto Scams
There are numerous types of crypto scams that you may have come across. One of the most common is the Telegram scam. Telegram is a platform that became the breeding ground for Bitcoin scammers. The platform allows anyone to promote anything they want.
Therefore, it is easy for a scammer to post an advertisement about coins they are selling, even if they are not legitimate. There is no one checking every post to ensure that the person is true to their word.
Most crypto scams can be traced back to a platform like Telegram because it is easy to communicate and share information without being shut down. Telegram also lets scammers contact victims directly in the most discreet way. One of the most common Telegram crypto scams is the tech support scam.
This is where a scammer would pretend to be a major cryptocurrency exchange to help investors “fix” their account problems. A scammer may also reach out to offer an upgrade on an investor’s account security. This is a scam because the person can impersonate any legitimate cryptocurrency exchange.
If you are on the receiving end of these Bitcoin scammers, they will ask you to share your login credentials. They may also ask you to transfer your cryptocurrency to another wallet for “payment,” even though these services are unreliable.
Always note that a legitimate broker will never ask users for payment or login credentials. If you encounter this issue, you should contact your original exchange to verify that the person you are in contact with is not working for them.
Impersonation Crypto Scams
As a cryptocurrency investor, it is essential to know that fraudsters often approach those who are less tech-savvy. A scammer does not have to work very hard to obtain documents from their victims to complete account verification processes.
After an account is opened, the victims deposit their funds into it. This is when the scammer gets full access to a victim’s account. They can then clear out all the funds and transfer them elsewhere.
Cryptocurrency scams are also difficult to trace because of the privacy and secrecy involved while trading. A scammer can effortlessly transfer a victim’s crypto by swapping them into highly liquid currencies like Bitcoin.
This makes it easy to transfer into their own digital wallets where you cannot trace your loss anymore.
Giveaway Crypto Scams
Giveaways are the most straightforward cryptocurrency scams because everyone loves winning freebies. In a giveaway scam, the fraudster promises to give you free cryptocurrency as part of a competition. They will then request that you verify your wallet address.
This would have to be done by sending some coins to a wallet with an address specified by the scammer. Thanks to social media, especially Facebook and Twitter, giveaway scams can spread like wildfire. A scammer will use a fake account to impersonate the Twitter handle of a celebrity or finance guru to tap into their followers.
They may also try to pretend that they are a famous crypto company you trust. If they are not pretending, they may hack into some of these accounts momentarily. Remember when the top Twitter accounts of Elon Musk, Joe Biden, and Kim Kardashian got hacked?
The compromised Twitter handles then tweet links to an unknown cryptocurrency wallet that they use to conduct the giveaway scam. Then they ask people to deposit coins and collect thousands of dollars worth of cryptocurrencies before the tweets are reported and removed.
Social media platforms are actively cracking down on spam accounts and posts, but there are still ways that fraudsters can quickly collect enough funds from victims before shutting all the accounts and disappearing.
Employment Crypto Scams
Employment scams involve scammers who mimic executives and recruiters from top companies. They may advertise bogus job listings to lure unsuspecting candidates. They may use a platform like Telegram to solicit cryptocurrencies from those eager to find a job.
A recruiter may reach out saying that they can hire you for a well-paid role if you participate in crypto-asset transfers. This is dangerous because it can also lead to illegal money laundering.
When applying for jobs, always ensure that a company never contacts you through an unprofessional platform like Telegram. They must always have a legitimate website and email address with employees on LinkedIn for you to verify. Never send any money or cryptocurrency to accounts that you are unsure of.
Phishing Crypto Scams
The next significant cryptocurrency scam you should avoid is phishing. Phishing crypto scams are popular due to their success. Without much effort, someone can gain access to your online bank and email accounts. Phishing attacks come in various forms and shapes.
The end goal is to trick victims into handing over sensitive login credentials. This helps a scammer gain access to your crypto assets. The most common way people fall for phishing scams is by visiting a website or clicking on a link sent by someone.
Usually, a hacker may gain access to a friend’s account and send you messages from there to make you believe that you can trust the person.
The website domain address would look like the original organization’s site, which is why phishing attacks are brutal. The scammer will then try to persuade you to enter your login details on the fake site, which will run a phishing script to steal your information.
Investment Crypto Scams
This is where scammers promise products and services that offer high returns without any risk. Sounds too good to be true, right? A scammer will ask you to transfer your cryptocurrency to another account, or they may request that you grant access to your wallet.
When something sounds too good to be true, it is likely a scam.
Otherwise, everyone would be jumping on the same investment bandwagon, and it would not be lucrative enough. The trick with investment crypto scams is that the scammer might deposit small returns into your account to gain your trust.
Then they will take all your assets and disappear randomly one day. This type of crypto scam is trendy among newcomers who do not have enough knowledge about the industry. It is similar to a Ponzi or pyramid scheme.
Extortion Crypto Scams
Scammers may contact you, saying they have incriminating information or pictures of you. They will threaten to release this information if you do not transfer some cryptocurrency quickly. They may also show you something they obtained through a data breach to seem more convincing.
For instance, a scammer can get an old password of yours and mention it to scare you. This is criminal extortion, even if the scammer is bluffing. You can mark any communications as spam and report all incidents to your local authorities and the FBI.
Always run malware scans on all your devices to ensure that a scammer does not get a hold of any personal information. If they share your new password with you, you should change it immediately.
Remember that these are scare tactics, and the scammer could be bluffing. However, it is always better to be safe than sorry by protecting all your information thoroughly.
How to Avoid Crypto Scams?
Now that you know the different types of crypto scams, you will notice that scammers can be very creative. Therefore, it is up to you to take precautions to protect your assets. The first tip is to avoid sending any cryptocurrency to unknown addresses.
A reputable broker will not ask you to transfer cryptocurrency for “verifying” or “fixing” accounts. You should also avoid sending coins for any address verification purposes.
Giveaways should also be avoided. Unless you are best friends with the creator of Bitcoin, most people would never give something valuable away for free. You should also avoid falling for fake screenshots that promote bogus offers and giveaways on social media.
Do Not Trust Anyone
Even if the social media account looks legit and might be your favorite influencer, you should check if their account has been hacked. Even they would not generously give away crypto that could be worth a lot. Do not trust anyone with your assets.
Many people impersonate public figures, especially government officials, to ask you directly for payments. No matter how good an “investment opportunity” sounds, it is most likely a scam unless you absolutely trust the person you are dealing with.
Keep Data Secure
Never share your private key with someone or the seed phrase in your digital wallet. This information should always be stored in a cold wallet offline to secure it from hackers and scammers.
A cold wallet is also called an offline wallet or hardware wallet. It holds your private key and wallet addresses away from anyone who can connect to it from the internet.
Then you should also take advantage of enabling two-factor authentication. Whichever crypto wallet or exchange you use. You should have this in place as an extra layer of protection.
Check Site Address
Always double and triple-check every website’s URL. This is because crypto scammers who want to grab your assets through a phishing scam will copy the URL of legitimate websites.
Then they will swap some of the letters and numbers around to make it look like the company’s actual URL. If you see any “typos” in the URL, it is most likely a scam website to which you should avoid giving any information.
Finally, always reject offers that require an up-front fee, especially if the payment has to be made in cryptocurrency. Stay away from recruiters who promise to hire you for your dream job if you transfer some Bitcoin around.
Use Secure ATM
There are hundreds of Bitcoin ATMs, but it is always best to find the most secure one to protect your assets. Check out Byte Federal for the most convenient and safe experience.
Successfully Avoid Crypto Scams
Now that you know all about crypto scams and how to avoid them, it is time to start securing all your devices and stored information. Remember that no legitimate company or authority will approach you asking for crypto transfers.
You should never transfer your coins to strangers and run from any investment opportunities that seem too good to be true. It is likely a scam if someone asks you to pay in cryptocurrency or gift cards.
Always report incidents to the local authorities and ignore further messages designed to scare you. If you enjoyed reading this crypto guide, check out some of our other posts for more information.
Subscribe to Jebiga for a dose of the best in gear, design, rides, tech and adventure.