How Cryptocurrency Scams Work: 5 Things To Spot
Thanks to the first cryptocurrency, Bitcoin, new cryptocurrencies have been developed to allow crypto enthusiasts to purchase, sell, or exchange cryptos on any cryptocurrency trading platform.
The millions of individuals and businesses in the world engaged in the crypto industry influenced the growing number of ordinary people to take an interest and start exploring the cryptocurrency field.
However, the number of crypto enthusiasts interested in earning profit through Cryptocurrency isn’t the only one rising. Thanks to the Internet’s power of allowing anyone to become anonymous, scamming and hacking among crypto investors and firms have also become well-known.
Some cases reached the point of losing $9 million each day in Cryptocurrency scams, and what’s terrifying is that it’s not even the greatest scam that happened in the crypto world.
With the increasing number of crypto scams and thefts in the field, it’s perfectly normal to be cautious to avoid being a part of the thousands of victims of this act. Fortunately, there are various ways to spot these suspicious acts easily! To help you steer clear from it, check out these five things to spot cryptocurrency scams:
1. Pyramid Schemes
People online may appear friendly and willing to help by offering to share their experience and some tips, especially to newbies who just got into crypto trading – this act is just part of the plan to get crypto enthusiasts to invest in their scheme. Some of these schemes are referral-based, bringing in people to recruit new investors.
They will inform newbie investors to pay in crypto to have the right to recruit other investors in their program and will get cryptocurrency as a reward. These scammers will promise you the more you pay crypto, the more money you’ll make, which is not true.
2. Fake Websites
Scammers lure newbies in cryptocurrency to visit fake websites, which show off opportunities to invest and mine cryptocurrencies – and many of these websites appear real and show newbies that if they invest, it will truthfully grow.
However, victims of fake websites report that they are informed to send more crypto every time they try to withdraw their profits but get nothing back in the end.
When it comes to safe and secure websites to trade cryptocurrency on whilst avoiding scams, always double-check the URL of the site you’re visiting and, of course, always opt for platforms and services with a solid reputation like eToro, and Immediate Edge.
3. Giveaway Scams
One famous crypto scam is through giveaways – which works by giveaway ads promoted on social media sites such as Twitter, Facebook, and other sites that appear to be sponsored by famous people in crypto fields or celebrities who engage in crypto that promises a sudden increase in the crypto you’ll send. In most cases, the coins sent by deceived investors just end up being sent to a scammer’s wallet.
4. Online Dating
Since the rise of online dating applications throughout the years has also paved the way for scammers to take advantage of people by using various platforms, there have been cases of online dating scams, especially for long-distance relationships.
When a trust has been developed, these so-called lovers promise huge amounts of money returns on exciting, new cryptocurrency investment schemes. When they get what they want, they ghost the investor, leaving with the invested money.
This method is another way scammers use to scam investors – by acting and making people believe they are a real government authority, business, or famous icon in the crypto world.
There have been reports about depositing cash into Bitcoin ATMs of impostors claiming to be another person. Other cases also involve losing money to scammers that acted as a firm and tried to trick some newbie investors, such as the largest U.S based cryptocurrency exchange and wallet provider – Coinbase.
Perpetrators of the crypto scams don’t just target newbie individuals and firms; they also target crypto wallet providers. Despite being a leading form of crypto storage, some are still susceptible to malicious activities.
In Conclusion, Stay Alert!
That said, it’s important to be careful with who you send cryptocurrency to. To avoid being a victim of scams, you must look for the five factors mentioned above, do deep research about the individual or firm you find online, and figure out if they are who they claim they are. Performing research about certain crypto can help you avoid scammers and thieves, so be very careful when trading cryptocurrency on any platform.