The increasing rate of cryptocurrency fraud is getting more trouble for new investors and crypto traders. This issue affected many people badly as those scammers victimized them. It is essential to understand how cryptocurrency scams work and identify fake cryptocurrencies by deeming this situation and massive record-breaking fraudulent cases. With this understanding, you will better know how to protect your money.
Cryptocurrency Investment Scams
Here are some different forms of common cryptocurrency scams you have to beware of. Let’s discuss them briefly:
1. Fake Websites
Crooks are involved in making illegitimate websites to fool innocent people. The indication to ferret out whether it is an original or fake website is that they copy legit websites having a similar-looking username which most people ignore.
People often get confused when analyzing its genuineness as so many scams are around. Some websites will take all your confidential data, and you will get empty-handed. The other way of scamming is that they will initially build your trust by reimbursing you a little of your investment, and eventually, you can’t find it anymore, and all your assets go in vain.
These scenarios can happen to you, so keep these things in mind before putting your trust in fake cryptocurrency websites and to prevent your money from common cryptocurrency scams.
The above-discussed situation of scam is called phishing. These websites took off your data by pretending to be legitimate websites and, with a proficient or professional layout, showed up as original. When you enter your key to the crypto wallet, they steal whatever amount you have in your wallet.
2. Pump and Dump Schemes
This is a specialized and advanced technique to do another level of scam. To understand it, you need to have a basic knowledge of the trading market. When a commodity is more in demand, the price increases, people spend a lot of money buying it, and the producer gets a lot from it.
Scammers play the same techniques. They promote any coin or token on social sites to make people aware. When they spread awareness, people consider it beneficial, and countless people start buying it frequently. Then suddenly, it’s worth it after earning a substantial handsome amount from investors. Also, this is one of the biggest crypto scams.
3. Fake Apps
Many people find it more convenient to have an application for every purpose. They are easy to use, and you can find helpful information by downloading an application. These scammers also hit there by designing fake apps for people with similar features to make them look legitimate. These websites don’t stay for a more extended period, but people in a shorter period target as many as they can.
4. Fake Celebrity Endorsement
In the standard cryptocurrency scams list, you will find it too. In such a case, they took advantage of any celebrity or public figure with whom people have emotional connections, and usually, people blindly follow their favorite stars.
They promoted their fake cryptocurrency websites through them and got the desired attention. Ultimately they achieved their target.
5. Giveaway Scam
I’m sure everyone must hear about giveaways on social media once in life. These giveaways are like a hunting tool to trap people, a part of the biggest crypto scams. People find it as luck testing, and often people participate in it greedily, but they get nothing in return.
6. Blackmail and Extortion Scams
Another below the Beltway of stealing cryptocurrency from users is blackmailing. These scammers hack the personal data of the potential clients to find all their history and confidential material based on which can frighten them that all their private things will be shown publicly. Also, if they don’t send their password or wallet or keys, scammers use this way by hiding their original identity.
7. Cloud Mining Scams
Have you ever heard about mining? These mining companies and websites allow you to do as much as possible to get a specific amount. Some do it by taking some investment while some allow you for free, but in the end, it is going to waste your time, money, and energy.
8. Fraudulent Initial Coin Offering (ICOs)
This encompasses bitcoin scams in the sense that some companies scam bitcoin owners to trade it with coins that are worthless or equivalent to nothing.
They will show you that they are new and growing in the market and give you a highly favorable impression that drives you to buy it, and you will lose bitcoins with this scam. Although not every website or offer is a scam, you must be extremely careful as it falls under the common cryptocurrency scams category.
How To Spot Cryptocurrency Scams?
After recognizing various kinds of reported crypto scams according to the crypto scams list, here are those techniques through which you can get a better idea to figure out whether it’s a scam or not and how to avoid them.
The Promise Of Guaranteed Results: If you are an investor, you must know that every risky investment has a probability of loss. A common saying goes that the higher the risk, the higher the return. So never believe anyone is saying it’s a risk-free investment.
A Poor or Non-Existent White Paper: Before investing in any cryptocurrency, remember that they must possess a clear, unambiguous, and valid white paper. Avoid it if you don’t find it or if there are any problematic factors.
Excessive Marketing: Investors must have marketing information on how fraud companies market themselves in extraordinary ways. Legit companies don’t need to engage people with different strategies as they will grow on the right path. If you notice extreme marketing, don’t invest in that company or double your research to get the facts.
Unnamed Team Members: If you go on google and search for a legalized company, you will get all the required information about that company, including the team members’ names who are involved in a company’s growth. But scam companies hide their names, so this can be a technique to know where to invest and where not to.
Free Money: Anyone offering free money for cryptocurrency in this era of hustling for money is undoubtedly fake.
How to protect yourself from cryptocurrency scams:
Now you are well aware of fraud and its signals, and here we have some tips to prevent these scammers. Let’s move ahead:
Protect Your Wallet: First, investors must know that your wallet is like your bank account. Just like you can’t share your pin code with anyone, wallet key information is equally confidential, and you must not convey it at any cost.
Keep An Eye On Your Wallet App: The cryptocurrency apps that you are using also tells you about its authenticity. When it has frequent bugs, or you’re finding it not working as they claimed. If the problem arises, you must not continue working on that application to avoid any crypto scam.
Only Invest In Things You Understand: Understanding the trading of cryptocurrency is more essential and prior than investing in it. So when you plan to invest, first, do a deep and thorough analysis and research to get the facts straight, and no one can cheat on you.
Take Your Time: Please do not invest in a hurry or greed; you might regret later for it. Take enough time to understand the proposal and then decide when you make sure from all possible resources that you are not getting trapped by any scam.
Be Wary Of Social Media Adverts: You must understand that social media is the most effective tool to commit fraud and make people believe wrong things. These scammers know how to achieve their evil targets through social media ad campaigns.
Ignore Cold Calls: In the common cryptocurrency scam ongoing list, scammers use this way too. If you receive any call and a person says he is selling crypto, don’t trust him as the legit websites will never contact you like this.
Is It Too Good To Be True? In short, in all these tips mentioned above and indications, we want to explain that you must be wise enough to figure out and know all the differences between a legit website and a fake which can make it easier for you to decide correctly.
What To Do If You Fall Victim To A Crypto Scam?
Scamming is also possible, so you must know further steps once you’ve been affected by scammers. In such a case, you can change your financial information as soon as possible by contacting your bank or where you created your account to recover scammed bitcoins immediately.
