All virtual platforms and transactions involve at least some kind of risk – it increases dramatically when it comes to digital currencies and exchanges. The volatility of the market, the lack of strict regulations, and the virtual nature of the crypto market are the factors that make these currencies and the transactions related to them vulnerable to scams.
Frauds and scams are not new – they have always been here and will always continue to be. But the problem with a cryptocurrency scam is that you might not even know that you are scammed! Unlike money, once you pay for something with digital currency, there is almost no way to get your cryptos back. And doesn’t this sound like a golden opportunity for the fraudsters?
Let us take a look at some of the common cryptocurrency scams and how to spot them.
Popular Ways In Which Crypto Scams Take Place
● Fake Websites
One will get astounded by how many fake sites and platforms are out there on the internet. While in search of a start-up, or a famous company, there is a high chance that you might encounter an imposter website. And as you begin your transaction or payment, you’ll find that the webpage keeps getting directed. This could be one of the sure signs of a hoax.
A fake website gives the perfect opening for phishing to take place. By directing you to a malicious page, the scammer can extract all the necessary details – your bank account-related details, the private key to your crypto wallet. It is a very popular method as people fail to differentiate between a genuine website and a scam one.
You can practice a few precautions to avoid this. Look out for the lock sign near the URL. This is a symbol that ensures your connection with that particular site is secure. Check whether the URL contains HTTPS in it. Taking this a step further, you can type the URL by yourself, so that you don’t end up on a website that’s similar to the actual one.
● Wallet Hack
Crypto exchanges used to be the place where people stored their digital currencies. But, nowadays we have digital wallets for the same. And, undoubtedly, a breach in the exchange or into one’s wallet makes it so much easier for a schemer to steal all the personal information and your currencies. One such example of a hack took place in June 202, where the details of 1 million users were stolen by the hackers from an exchange.
Using a cold storage wallet can be a good place to start practicing caution. A cold storage wallet contains your private key offline, thus providing no way for a hacker to steal your details. As for exchanges, you have to ensure that you invest only in certified and popular cryptocurrency exchanges. You can go URL and find more details about this.
● Social Media Frenzy
The best way to reach millions of people in one go is through social media, especially well-established platforms like Twitter. These hackers breach famous people’s accounts and use the opportunity to promote fraudulent websites and links. Obviously, the followers will rush up when they find “offers” and “discounts”. There are fake accounts that are run by bots that make these empty promises about unbelievable returns and rates. Do not trust them.
If you get even one request asking for cryptos or to join an exchange or some other suspicious message, make sure that you don’t reply, and possibly block that account. A lot of links will be put up, promising attractive offers in a minimal period and all that. Do not fall for this tactic.
● Blackmail/Flashy Emails
An email scam could be of two types – one could be fake mail looking exactly like it is sent from a legitimate company where you have already invested. Another type is where the hacker or scammer blackmails you with some personal information like the kind of websites you visit, etc.
The best way to avoid this kind of scam is not to click on the links provided in these emails. These links will probably direct you to a scammer website that looks just like one of the popular crypto websites. Take your time and verify all the details before you provide your details to a website.
Indications That You Are Involved In A Cryptocurrency Scam
Regardless of taking numerous precautions, people tend to fall into the trap of crypto scams all the time. Unfortunately, many believe the lies spun by fraudsters and tend to get cheated in the end. Here are some tell-tale signs of crypto scams that one can refer to in case you are suspicious of the company in which you have invested your cryptos..
● No Real Purpose
A scam project will mostly not have any end goal to achieve or any utilitarian purpose. This is one of the biggest red signs you will face when it comes to a crypto scam. A lot of times, a pyramid scheme is brought into use, and this ultimately results in more money for the scammer. These projects do not aim to solve any real-life problems or provide any benefits to their customers.
● To-Good-To-Be-True Returns
Sounds exciting, doesn’t it? That’s the exact response a scammer will expect from their audience. Before investing in schemes that promise you unnaturally high profits check the return rates for similar projects and compare them. Some fraudulent websites even offered up to 40% returns per month and people did fall for this trick. Think logically. How can a company provide such high returns in a short time frame?
● Lack of Transparency
When the company is open with its customers about their actual losses and gains, it is a good sign that shows their transparency. In case if the firm in which you have invested is trying to cover up their mistakes, especially their losses, then it is time to back out.
● All Bark No Bite
If the company through which you are trading is spending all their inputs in advertising and flashy promotion instead of actual investments, then it could give rise to critical problems. When the hype is too much and the company is strategizing an MLM scheme, it is definitely going down the wrong road.
One invests in digital currencies because they come in handy in the future. So, choosing to invest in the right place is a crucial part of the whole procedure. In case you suspect that you have gotten caught in a scam, do not hesitate to voice your complaints. File a complaint to the right officials and think of how you can get your investments back. Stay vigilant, stay safe!