Indeed, the rise in digital currency has spelled trouble, as scams target not just cash right now but crypto users in an aggressive manner. In 2021, scammers made away with $14 billion from users, and in 2022, another $4 billion. Guess what though? Even after crypto crime dropped at about 65% in 2023, it is likely that these numbers start creeping up again due to the ever-increasing popularity of Web3. we have had a few experiences in recent times with the BAYC NFT phishing that had scammers carting away with more than 54 ETHs.
One just has to remember that carefulness is all that matters when it comes to dealing with cryptocurrency.
Why? Because crypto transactions are usually final. Once initiated, can only be reserved by the second party – IF (and that’s a big if) they are willing to reverse the transaction.
Now let’s talk about the most common crypto scams and some advice on how to avoid them. But before we proceed…
What are Crypto Scams?
Just like the regular scam we hear about everyday where people get defrauded of their cash, crypto scams are the same, only this time crypto scammers aren’t trying to take your cash – they’re trying to take your crypto.
Common Cryptocurrency Scams
Bitcoin Investment Schemes
Scammers would pose as investment managers and claim they make big profits with bitcoin just to bait their victims. When trasacting, they ask for the money up front, take it, and the con is on. In some cases, users who aren’t careful or “lucky” enough might have their personal information stolen by these bad actors under the guise of needing it to transact.
Rug Pull Scams
Scammers inflate the value of a new project, NFT, or coin and then disappear with the money of the investors. As an example, the price of the Squid coin scam token inflated from one cent to over $90, before it all came crashing back down to zero after trading was stopped, leaving investors with nothing.
Phishing Scams
This type of crypto scam involves sending emails with malicious links to fake websites that intend to steal users’ personal data. Always go directly to the website instead of clicking on email links, no matter how legit they appear.
Investments Scams
These are scams that promise high returns with “zero risk”. Scams like these usually start from social media page or dating apps. Be cautious of unsolicited offers and messages that promise investment opportunities that are too good to be true.
Fake Apps
Scammers create applications in the expectation to scam users and get them to invest in something. Apps of such sort can be deleted soon, but even this cannot help reduce the harm that they can make.
Giveaway Scams
The promise is usually to double or triple your cryptocurrency. Scammers would usually use high-convincing messages to create a sense of urgency and trick people to send over their assets.
Man-in-the-Middle Attacks
Public Wi-Fi may potentially leave your data in the open for scammers. Using a virtual private network to encrypt your data can go a long way to safeguard your information.
Fake Crypto Exchanges
They promise big profits in fraudulent exchanges, but then steal your deposit. Stick to reputable exchanges and always do your research before posting your personal information.
Employment Scams
This can also be done by scammers claiming to be recruiters for hot jobs that require payment for training in crypto. They can also act as a job seeker to gather information about you and your crypto accounts.
Best Practices for Not Falling for Cryptocurrency Scams
Never Share Financial Information or Private Keys
Guard your sensitive information even from trusted parties. Deal with it directly and securely when necessary for a transaction.
Double Check URLs and Domain Names
Always ensure you’re on the right website domain or social media handle. Look out for misspellings and verify that the account is legitimate.
Be Wary of Offers That Sound Too Good to Be True
When you hear phrases like “guaranteed return,” that might be a red flag. Legitimate investments have risk and cannot assure instant profit.
Ignore Unsolicited Messages
Be wary of all unsolicited offers, especially those promising high returns. Make transactions and report fraud via official channels.
Research Before You Send Crypto
Send coins only to wallets you control, or to wallets that belong to another party you trust. Research the legitimacy of a business or an individual before transferring assets.
Don’t Respond to Threatening Messages
Scammers may also want to use threatening messages to pressure you into making quick decisions. Be sure to take your time to assess the situation calmly.
Conclusion
By understanding the common ways that crypto scammers try to steal your crypto and by following the tips above, you’re able to safeguard your digital assets and prevent it from happening to you.
