Ways to Avoid Cryptocurrency Scams: Beware of Bitcoin Scams
How to avoid cryptocurrency scams?
1. Fake crypto investment platforms
There are a large number of fake websites or mobile apps that are made to look like the real crypto investment companies. But there are several ways to identify a fake website. For example, you should always look for the little lock icon that says encryption next to the address bar and you should avoid websites that don’t have “https” in the link. Sometimes, the attacker creates a fake URL by replacing a single character in the link and displaying the same interface. For example, it can add a zero instead of the letter “o” which can lead you to a fake website.
Another common method used by the hacker is to create fake phone apps that have names and user interface similar to the original ones. Before entering your login credentials on any platform, you should double check whether the app or website is secure or not.
2. Fake donations via tweets and other social networks
Just like the recent fake cryptocurrency scam that took place on Twitter, one can fall prey to shady schemes via misleading tweets, Facebook posts, or any other social media updates. If you see a social media post offering a deal that is too good to be true, it is likely a fake and a scam.
3. Fraudulent emails, phishing, social engineering, and impersonations
Now this is a popular method that every one of us must have come across. You are likely to receive a lot of spam emails or calls impersonating your bank and trying to find out your login credentials or other sensitive information. Likewise, attackers can pose as a legitimate cryptocurrency company in your inbox with identical logos and brands.
Such messages often come with malicious links or files, so you should never click on any link within emails. The scammer goes so far as to advertise fake Initial Coin Offerings (ICOs), or Initial Coin Offerings, to steal funds. Don’t fall for fake emails and website offers. Take your time to go over all the details. Also, keep these points in mind:
*. Never give remote access to your device to tech support or anyone else for that matter.
*. Don’t share 2FA (2-Step Verification) security codes or passwords.
*. Never accept calls asking for your confidential personal information.
*. Scammers can also impersonate legitimate phone numbers.
4. Fraudulent investment
Scammers often create seemingly legitimate platforms that claim to offer high, often unrealistic, returns if you send value in cryptocurrency. In such cases, it is advised to take some precautions:
*. It is okay to be suspicious of websites or services that promise high returns.
*. Send cryptocurrencies only to known and trusted third parties.
*. In case the details are new, research the organization thoroughly to verify that it is correct
5. Loader scam
The cryptocurrency scammer usually offers “upload” services on a variety of platforms. It allegedly asks for Coinbase accounts with high limits, and in return, promises to give a portion of the proceeds to the victim. In such cases, it uses credit cards stolen from compromised accounts to continue payment fraud.
Ultimately, the victim is left with payment delays after the actual cardholder discovers the fraud. By then, the fraudster steals any available cryptocurrency and charges unauthorized fees on verified payment methods.
6. Initial Coin Offerings (ICOs)
Initial coin offerings are basically fund-raising mechanisms for newly launched cryptocurrencies. Investors in ICOs receive tokens in the new project. Investors pour billions of dollars into an ICO every year. There are many legitimate ICOs out there, and there are many that don’t have real business plans or technology behind them.
In fact, many of them are launched using just a blank sheet of paper by individuals with no technology or industry experience. So you should be very careful before investing in initial coin offerings no matter how big the promises are.
7. Unregulated brokers and exchanges
There are dozens, if not hundreds, of unregulated online forex and brokerages offering cryptocurrency and cryptocurrency trading products. Again, you should be wary of very good promotions and promises of quick riches as they might just be another cryptocurrency scam.
Once you invest the money, these kind of companies will charge you outrageous commissions or make it very difficult to withdraw money. In the worst case scenario, they can simply steal your money.
8. Fraudulent mining operations
Any regular investor can mine cryptocurrency via cloud mining that works without expensive hardware. There are many cloud mining services that allow users to rent server space at a fixed rate to mine altcoins.
Now, this looks like a profitable option to mine altcoins like bitcoin from home without investing in hardware. But as a first-time investor, how will you find out if the services are foolproof, or if they are just cryptocurrency scams to steal your hard-earned money?
Well, one way to identify fake services is to analyze lofty promises. Most of them tend to promise high returns on your investment and never mention the hidden fees that apply to returns. They cleverly design their systems to keep sucking money out of unsuspecting investors.
Indeed, no real company can guarantee such huge profits. So always be vigilant before subscribing to cloud mining servers. Also, make sure that your data is not at risk when you are on a shared server.
9. Pumping and discharging schemes
To avoid suspicion and make the opportunity as profitable as possible, the cryptocurrency scammer buys a new altcoin at a huge percentage. This increases the price of the cryptocurrency market for some time and creates a false sense of good returns among other investors.
Once unsuspecting investors start investing in the new coin and the prices go up, the scammer sells his huge share of the coins at a higher price. Thus they not only get back the money they initially invested but they end up collecting more than that.
If we talk about the stock market, pumping and dumping is illegal. But when it comes to cryptocurrency, it falls into the gray area. To avoid being scammed by pump-and-dump schemes, you should try to choose a more popular and stable coin to avoid falling for cryptocurrency scams.