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Whether you have just joined the cryptocurrency world a few months or weeks ago, it won’t take long until you discover that this field certainly comes with many risks, as it is with other investment sectors. Given the highly volatile nature of the cryptocurrency market that causes the roller-coaster changes of digital coins, there’s no denying that cryptocurrency can be dangerous.
However, volatility is not the only risk that can harm any trader’s career; many people hide behind their devices and portray negative roles like hackers, fraud or scammers. If you are a newbie still exploring the field, choose a legit bitcoin trading platform with a strong background that has proven safe and clean transactions.
To avoid immediately falling victim to the hands of scammers, it’s wise to make a list and do some extensive research rather than settling with the first platform you see without considering better and safer options. Most often, safe and legit platforms are often backed by the blockchain and digital currencies, a decentralised public ledger that stores data about transactions that users can track.
How do crypto scams work?
If you do some research about this section of cryptocurrency, you’ll be surprised at how creative these scammers are. There has been a long list of cases regarding this issue, and the number keeps increasing every year; Last 2021, crypto scammers took a record of $14 billion from crypto scams.
Scammers are always coming up with new ideas and finding new ways to steal your money through cryptocurrency, so how do you detect one? One way to be in a safe place is to always assume that any platform that would ask you to pay cryptocurrency before you can enjoy their mentioned services is a scammer.
Most often, they would present different ways that you can pay, such as gift cards, wire transfers or cryptocurrency; Once you pay the certain fee, brace yourself as there’s almost no way to get that money back, as this is what these scammers were aiming for.
There are multiple and various ways that these scammers use and are very engaging, which would lead to some investors falling for their words. Some would come up with websites almost identical to the original platform, send scamming or fishy emails containing made-up content, develop a fake mobile app that users can download, and even provide bad social media accounts that would ask for a small amount of crypto.
What are the common types of scams?
As mentioned above, scammers are getting creative and more developed as the year passes by. Every year, they come up with a new and believable way to target people and benefit from it. With the various crypto platforms and agents in the market, it can be challenging to identify which ones to believe and which ones are pure scammers.
Given this, it’s important to choose a legit crypto platform in the market or select a reliable system like Bitcoin Profit that connects traders to trustworthy brokers to completely avoid falling victims to the hands of scammers in the market. Sign up to Bitcoin Profit to start trading safely.
To give you an idea, we’ve compiled a list of the common types of scams used that caused millions to billions of losses. Ensure to do additional research to fully know how to identify these tactics and steer clear from them.
1. Impersonation scams
Given its name, this scammer sets up customer support lines and poses as a ‘legit’ company and aims to ‘help’ various service industries like finance, retail, telecom, tech, and many more. They lure investors by posting a certain phone number on the internet for everyone to see and would direct the attention of those who need assistance to them.
Aside from that, they may also make direct outbound calls and make false claims to deceive and manipulate their target into providing important information that they will use for scamming purposes.
2. Giveaway scams
We all know that almost everyone is hooked up to social media and uses different platforms for various purposes – from communication to entertainment. Even scammers are utilising these sources of information and entertainment by posting screenshots of made-up messages from various companies that promote giveaways.
This info comes up with hyperlinks that redirect any user to a fake website set up by scammers. Fake accounts will then be very active to respond to make it look legit, but this is where the danger comes in: these websites will ask users to verify their address by sending cryptos to the scam giveaway.
3. Investment scams
Crypto is not easy money, so it’s natural that most people would do almost anything just to earn or increase their profits; scammers took advantage of this mindset. Some fraudsters would ask users to invest money by promising that they will receive higher returns without risks and would engage them to bring more people to do the same.
Unlike other scams, this type of scam needs a constant flow of people investing in keeping them going as they will use the money for various purposes.
4. Extortion scams
This type of scam is more appealing and believable to users because of how it works. Scammers who utilise this type will often trick users into believing that they are legit by presenting they have more information about you than they do. For instance, these scammers might show users their old passwords or other information to ‘verify’ that their scam is legitimate.
How to avoid crypto scams?
Before you decide to invest in cryptocurrency, keep in mind that the market is highly volatile, and once your money is gone, there’s no way to get it back. With that being said, you should be very careful with your every move and rethink your decisions before making a final step.
1. Do research
There are various resources online that contain facts and information about the crypto world, including social media platforms where billionaires and influencers are online. However, it’s important to do your primary research before investing when it comes to your money.
You can start with reading guides and tips for beginners, but be sure to get your info from a legit source. Also, note that if an investment sounds too good to be true, it’s probably a scam, so do deeper research.
2. Be cautious
It’s wise to treat with extreme caution anyone who reaches out to you directly asking for payments or offering you an investment opportunity. Make sure not to trust emails even if they appear from a legitimate source; be sure to do a background check to see if it really is from the original platform and not just from a scammer who utilises impersonation scams.
3. Secure your crypto wallet
Crypto or Bitcoin wallets are an essential part of your crypto career, and losing your key means losing your funds since there’s just no way to get it back. If you own cryptocurrency, never share your private key and ensure to place it in a safe place. There are two types of wallets: hot and cold. If you’re storing huge funds for a long time, choosing a wallet that allows storing funds offline is recommended.
4. Check legitimate sources
Always double-check the URL for websites you visit that are related to crypto. Many scammers copy the URL of legitimate sites and swap out or add letters or numbers. Also, ensure that the website you visit is secure, so look for the little lock symbol next to the URL or turn on your antivirus software.
Throughout the years, scammers developed several methods that they utilised to take advantage of users and unregulated computing systems to steal cryptos. To avoid being part of the list of cryptocurrency scams, it’s important to learn more about the different factors, such as the things listed above, to stay safe and ensure a secure cryptocurrency career.