Cryptocurrency is a digital currency that can be used to buy goods and services, and is widely used to carry out transactions online. Cryptocurrencies are traded online because there is no physical coin or a bill used for the marketing done by Crypto. However, Crypto users may fear the security of their data when it comes to online transactions. Furthermore, since use of digital currency has also led to crypto scams taking place, users may worry about safeguarding themselves. Although Crypto being an online ledger with robust cryptography technology, is capable of protecting crypto transactions. But, digital frauds are, at times, unavoidable.
There are several benefits that arise from crypto investment, some of them are mentioned below:
- People can quickly and directly send and receive digital currencies amongst themselves. There will not be any mediator between them.
- Crypto transactions are safe, and their data is kept secure through a method known as encryption.
- The transfer costs for dealing in currencies are minimal.
- Cryptos are not directly affected by national borders. A person from one country can send crypto to another person from a different country.
- People do not need permission from their country’s authorities to use the crypto ecosystem.
- Crypto markets are always open 24 hours a day and all seven days a week.
The units of bitcoin can be purchased more conveniently when compared to other variants of cryptos. Traders can choose to buy it from cryptocurrency exchanges, via gift cards, or through investment trusts.
Despite cryptocurrency being new in the trend, crypto scams are still taking place. Below are some of the common crypto scams listed briefly.
- Bitcoin investment schemes:
In the process of bitcoin investment schemes, the tricksters contact the investors by mentioning that they are seasoned “investment managers.” The fake investment managers tell the investors that they have made millions in crypto investment as a part of this scheme. They also give so-called promises to the investors that they will help them make millions by investing with them. First, the tricksters request an advance fee. After that, the scammers steal the advance fee instead of assisting the trader in earning money. The fraudsters might also request personal identification information by saying it is to transfer or deposit funds. To scam traders with bitcoin in another way, the cheaters consider the actual photos of the celebrities and use them on fake accounts, articles, or ads. It is to show the people that a star is promoting a considerable profit gain from their investments. It may sound natural, but the endorsement is fake.
- Romance Scams:
Tricksters use dating apps to commit crypto scams. Here, they form relationships that are, in fact, long-distance and strictly online. The truth is one party takes its time to get the trust from the other party. Then, as time passes, the former party may ask the latter to give some money in digital currency form. After receiving the money from the victim, the romance scammer disappears. These types of scams are also referred to as “pig-butchering scams.”
In the phishing scam, victims receive fake email from scammers. The links are provided to the victims to enter their personal information, such as the crypto wallet key information. Crypto users get only a unique private key to their digital wallets. But if the private key is lost, it is impossible to access your wallet. Since each key is given separately to a wallet, the person must create a new wallet to trade in Crypto again.
- Man-in-the-middle attack:
When users go to a public location and login into a cryptocurrency account, there is a high possibility of fraudsters stealing confidential information. A scammer can take any data sent on the public network, including passwords, cryptocurrency wallet keys, and account information. A thief can collect this sensitive information using a man-in-the-middle approach whenever a user is logged in publicly.
- Social media cryptocurrency giveaways:
Many fake posts exist on social media that promise bitcoin giveaways. Some scams have fake celebrity accounts to promote their giveaways and convince people. Anyhow, when somebody clicks on the giveaway, it will take them to a fraudulent site asking for them to verify by sending an insignificant part of their bitcoin.
As crypto scams are becoming increasingly frequent, the preventive measures below can be followed to protect yourself and your cryptos.
- Please do your exploration on cryptocurrency if you need to learn about that. Search on the internet by using the name of the company and the name of the cryptocurrency. Always use phrases like “review,” scam,” or “complaint” after the name, while searching on the internet.
- Fraudsters may try to put more force on you to send the money sooner. For example, they might mention that they will provide huge discounts and bonuses if you do it immediately. In another example, cheaters may pretend to be a close friend or a relative who needs money, in the form of Crypto.
- Verify the ads posted on social media about cryptocurrencies. The victimizers always publicize them on social media.
- Someone may call you and say that there is a fantastic crypto investment opportunity. They may try to sell it to you. Strictly speaking, do not fall for those calls and acknowledge them as red flags.
- If you want to put your money in cryptocurrency, then don’t be in a hurry. If you don’t know about how cryptocurrency operates, then thoroughly study it. After that, you can knowledgeably decide on your crypto investment.
- Keep your crypto wallet keys always safe with you, as you could stand the chance of losing your cryptos if you lost them.
- Please refrain from sharing details about your crypto investment on direct messages with anyone. These cheaters may use distinct tactics to convince you to invest in Crypto or to share sensitive details with them.
- When visiting a cryptocurrency trading website, cross-check the website’s address before entering your personal information. If you feel that the crypto website sounds familiar, get the URL from a formal source.
People have to protect themselves and are responsible for the safety of their own financial assets. Preventive measures are pivotal and must be taken to be safe from crypto scams. Therefore, crypto users must be aware of the risks involved when investing in crypto and should be careful when dealing with Crypto transactions.