How Do I Avoid A Cryptocurrency Scam?
Cryptocurrency comprises a digital payment system that does not depend on banks to validate transactions. Instead of depending on a centralized issuing or regulating authority, cryptocurrency relies on a decentralized mechanism to track transactions and produce new units. It’s a payment system that allows anyone to send and receive money anywhere. Rather than being solid money that can be carried about and exchanged in the real world, cryptocurrency payments are digital entries in an online database identifying individual transactions. Financial transactions consisting of bitcoin currency are recorded in the general ledger. Cryptocurrency is stored in digital wallets.
Cryptocurrencies are digital assets that people invest in and use to purchase online. You use real money, such as dollars, to purchase “coins” or “tokens” of a particular cryptocurrency. The name cryptocurrency is generated since it uses encryption to verify transactions. Storing and distributing bitcoin data between wallets and public ledgers necessitates a high level of coding. Cryptocurrency could be a decent investment if you’re willing to recognize that it’s a high-risk gamble with a chance of paying off – but also that you could lose all of your money. Before investing in bitcoin or other cryptocurrencies, you must do it with your eyes wide open.
If you are someone who’s interested in Cryptocurrency, then you’re definitely at the right place. We can give you the best practices in identifying red flags as well as help you in recovering your stolen money from scammers!
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Tips & Tricks to Avoid Crypto Currency Scams
Cryptocurrency transactions are irreversible, which means that once you transmit cryptocurrency to a third party, you can’t stop or reverse the transaction. You must be certain of the legitimacy of any involved third-party services and merchants before sending cryptocurrency to a blockchain address and only sending cryptocurrency to businesses you trust. Since the exchange is done digitally via an online platform, you are likely to encounter many scams.
Remember that cryptocurrency markets are volatile and that once your money is gone, it’s gone for good. Cryptocurrencies are not insured in the same way that traditional currencies are. This article will act as your guide in how to recognize these scams and prevent yourself from being played by them.
1. Fraudulent Activity Under False Pretenses
Any kind of fraudulent activity under false pretenses is a common practice. However, it has gotten so extreme that people scam you into believing that they are the real deal when, in fact, they are there to rob you of your currency. Therefore, do not be deceived by fake sites. A surprisingly large number of imposter websites that appear exactly like the official website are developed on a regular basis.
Beginners frequently fail to distinguish between legitimate and phony investments. Whether you’re unsure, ask those who have worked in the area for points on how you can differentiate between original websites and fake ones. Stay on the lookout for phishing emails, as they are the most common way to get trapped.
Crypto phishing schemes strive to gain the keys to your crypto wallet, rather than your email or banking login information, as with traditional phishing scams. Most of these are known as “technical support scams” because the impostor would usually pose as a technical support agent in order to acquire your personal information. Representatives from phony companies or those posing as legitimate companies will approach you and offer to assist you in regulating your cryptocurrency in return for your login credentials.
They may also imply that they need access to the computer or other device or that they require you to send cryptocurrency to a suspicious wallet address. Never give important information to persons who contact you without your permission, no matter how convincing or urgent they appear to be.
2. Extensive Research
With the introduction of cryptocurrencies, hackers have been able to take advantage of blockchain weaknesses to scam millions of individuals all over the world. Industry analysts expect that the number of hacking instances will climb in the coming days and weeks if the online crypto sector continues to attract new users at an unprecedented rate.
As a result, investors should spend time researching the cryptocurrency or other digital assets they intend to invest in. They could begin by visiting the official website of the cryptocurrency initiative. Get to know more about the company’s founders, developers, and current patrons. Discover where you can acquire the project. It should help make decisions on whether or not the project is feasible.
3. Protection of Wallet
It is imperative you take care of your wallet in order to protect your cryptocurrency. Every wallet has a private and a public key. The private key is meant for you only and should never be disclosed to others. It is not public information and, therefore, should be kept discreet. Wallets, on the other hand, have risks, and holding private keys in crypto is usually the safest option.
4. Email Scams
Even though it claims to be an email from a credible cryptocurrency organization, proceed with caution before investing your digital money. Is the email exactly the same, as well as the logo and branding? Are you able to confirm that the email address belongs to the company? One of the reasons it’s crucial to choose a company with real people working for it is the opportunity to check on this. Contact somebody that works there if you have any concerns about an email. Also, never go to a website by clicking on a link in an email.
Scammers frequently launch fraudulent ICOs, or initial coin offerings, in order to steal large sums of money. Don’t be fooled by these phony email or website offers. Take your time to examine every aspect. Unfortunately, there are numerous ways for some Internet users to mine or steal cryptocurrency using insecure computing platforms. Before you start investing in cryptocurrencies, learn more about how to stay safe and secure in this new market.
5. Fake Applications
Scammers also use false apps available for installation on Google Play and the Apple App Store to deceive cryptocurrency investors. Though users can often recognize and delete counterfeit apps, this doesn’t suggest the apps aren’t having an influence on many businesses. According to Bitcoin News, thousands of individuals have already downloaded fraudulent bitcoin apps. Every investor should be aware of certain possibilities when it comes to downloading an application.
Does the app name seem to be misspelled? Go with your intuition and cross-check. Is there a fake look to the branding, such as a different color or some difference in the logo? Take note of the little things and look into the details.
Do you suspect that someone had scammed you?
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You will feel safe knowing that experts with years of experience will be guiding you!
6. Scams Through Giveaways
Scammers are making use of social media to spread their giveaway schemes. They upload screenshots of fabricated company and management correspondence promoting a giveaway with links to bogus websites. Fake accounts will then reply to these posts, confirming the legitimacy of the hoax.
After that, the bogus websites will ask you to “verify” your address by transferring cryptocurrency to the scam giveaway. Coinbase Earn is a real way to make money with cryptocurrency, and all Coinbase freebies will connect you to Coinbase.com. You will never be asked to transmit cryptocurrency to an address in order to receive cryptocurrency back from Coinbase.
Under the pretense of address verification, never send cryptocurrency to giveaways. All giveaways and offers found on social media should be taken with a grain of salt. Screenshots in reply messages should not be trusted since they might be falsified and manipulated. Do some research on any entity that is courting you on social media using your favorite search engine.
If an offer appears to be too good to be true, it most likely is. Check to see if the giveaway URL takes you to Coinbase.com. Any phishing or scam attempts should be reported.
7. Load-Up Scams
These are brazen scams in which someone asks for your crypto wallet or credit card data in order to increase your account limit. In exchange, the fraudster promises a share of the profits they claim to make from their investments. Instead, the victim’s crypto is stolen, and they have frequently left to foot the bill for bogus credit card transactions.
They “fill up” the victim’s account with cryptocurrency and then take it all, leaving the victim liable for any transactions performed with their wallet credentials. Even if they say you can trust them, never give out your credentials to a third party. If you notice this type of behavior on a legal, regulated exchange, please report it so that it can be addressed.
8. Blackmail Scams
Scammers also utilize blackmail emails as a popular social engineering technique. Scammers send such emails claiming to have a record of the user’s visits to adult websites or other unlawful web pages and threatening to disclose them unless the user shares private keys or sends bitcoin to the scammer. These are examples of extortion attempts that should be reported to a law enforcement agency like the FBI.
Why Are Crypto Scams on The Rise?
The evolving nature of the cryptocurrency market today, as well as the type of impact it will have on the future of business, elicit a lot of similar feelings. As individual investors, speculators, and other sorts of institutional investors shift their focus to the lucrative cryptocurrency markets, scammers and cheats turn their attention to them as well.
The advent of cryptocurrencies has provided hackers the chance to take advantage of network flaws and defraud millions of individuals around the globe. If the digital crypto business keeps drawing new users at an extraordinary speed, industry experts predict that the number of hacking incidents will continue to rise in the coming times.
Between January and July of this year, significant cryptocurrency breaches, hacks, and fraud are estimated to have cost more than $650 million. Many more have yet to be disclosed because of many factors, along with a lack of adequate technological understanding.
Scammers earned a total of $14 billion in cryptocurrency in 2021. From 2020 to 2021, losses from crypto-related crime increased by 79 percent. Theft of cryptocurrencies surged 516 percent from 2020 to $3.2 billion in value. In 2021, the most common type of cryptocurrency-related crime was scamming, which was followed by theft, the majority of which was committed through the hacking of cryptocurrency firms.
DeFi is a huge part of the tale for both, according to the firm, which is another cautionary note for individuals playing in this developing section of the crypto market. Furthermore, another reason for cryptocurrency scams to be on the rise is because of the vast amount of people coming to the platform with very little information or experience regarding it.
This gives the hackers the chance to exploit the massive amounts of users that are flooding the cryptocurrency game.
Stay Clear of Crypto Scams!
In conclusion, the concept of cryptocurrency is revolutionary. However, due to a lack of awareness regarding this technology, people become subject to numerous scams. It is crucial that you are aware of all the potential scams that may target you in order to avert any major crisis from taking place. Make sure to cross-check all the references as well as consult with an expert on the matter before investing in crypto currency.
You’ll be able to recognize a crypto-related hoax quickly to minimize the risk of it from happening to you if you understand the ways hackers attempt to take your information and consequently your money by recognizing the common ways scammers try to steal your information. It’s also important to report scams to the platforms where they’re being perpetrated. If you notice a scammer posing as a representative of a cryptocurrency exchange, report it to the exchange. Report it to Twitter if someone is circulating fraudulent giveaways on Twitter.
The authorities should also take severe repercussions to combat these scams in order to let the cryptocurrency market reach its full potential. However, on an individual level, it is imperative that you know what you are getting yourself into and the dos and don’ts in order to prevent being the target of any scams.
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