9 Common Cryptocurrency Scams And How To Avoid Them (2021)

Photo by Executium from Unsplash

The truth is…

You’re your last line of defense in cryptocurrency.

Because this market is unregulated, unprotected, and with irreversible transactions.

It’s not only volatile but a breeding ground for scammers.

And to prove how murky it is,

Scams have increased by 1000% since 2019. And people have lost $80 million in cryptocurrency scams.

In this market, it’s vital to do due diligence before you invest, lest you risk losing your investment.

Now here is free advice before you invest your fortune…

Do a research and find if the company you want to invest in:

· Is blockchain-powered.

· Have specified its digital currency and ICO rules.

· Have genuine people behind its system.

· Have business plans to solve actual problems.

If the company doesn’t have the above in place…

Avoid.

Let’s take a look at these nine cryptocurrency scams and how to avoid them.

Grab your coffee and let’s get started…

9 common cryptocurrency scams and how to avoid them (2021)

Photo by Executium from Unsplash

1. Imposter websites

Imposter websites mimic the real ones. If you’re not keen, you won’t be able to tell a part of their URL from that of the company.

To identify this

First, ensure there is a small lock icon that shows security next to the URL and with HTTPS. If that doesn’t exist, disregard the site.

Besides, their URL has little unseen changes, for instance, with a ZERO (0) instead of letter O, or using M instead of N.

To avoid this,

Carefully type the exact URL of the legitimate company in your browser, double-check and confirm.

Such fake websites are prone to spelling and grammatical mistakes. If you notice such, shun.

Ignore websites that promise high rapid returns.

And

Those that claim to be an extension of the legitimate company or claiming to be its affiliate.

2. Unregulated brokers

How well do you know the broker handling your cryptocurrency portfolio? A greater percentage are out there to have a share of your bucks.

So how do you spot them?

They lure you with low investment and quick skyrocketing returns.

Now the moment you strike a deal with them and deposit your money, they will come up with conditions that will make it impossible to withdraw your money. And thereafter, go mute.

And just like that, you lose your money into the thin air. Ouch!

They want your private credentials. They will ask you to provide them with your personal passwords, seed passwords, and personal info.

Never

Give out your private credentials. No customer care, project manager or even a government official needs your private authorizations to do their work, not even a cryptocurrency company.

They prompt you to take quick actions without a second thought

Take note;

That cryptocurrency fraudsters, take advantage of your fear, ignorance, and greed. No investment, in any part of the world, has quick skyrocketing returns within a brief span.

Any broker rushing you to take action is a scammer. So, take heed.

My rule of thumb is…

‘’slow down and be skeptical’’

3. Social media updates

Social media is a sweet spot for cryptocurrency scammers.

Just the way imposter accounts of celebrities and prominent people exist, the same way cryptocurrency imposter accounts exist.

They are an imitation, promising fake giveaways and offers. Intending to lure you to make an investment.

Don’t click!

On such giveaways and offers.

In fact,

Don’t take any advice on social media based on cryptocurrency investment.

It’s full of fake news!

4. Scamming emails

There are high chances of you receiving emails purporting to come from legitimate companies.

They are so good at imitation that you would hardly notice that they are fraudsters, with replica logos and branding of the legitimate company.

Take your time and check on the logos and branding to confirm legitimacy.

If they have provided contacts, then make inquiries. Chances are high that the imposter company won’t answer all your questions, something that is unlikely of a real company.

The reason, it’s important to deal with a company that has actual people working round the clock. So that when you have doubts, you can make inqueries to the support desk.

5. Fake mobile apps

People have repeatedly fallen victims to fake cryptocurrency apps and lost enormous investments. And even as Google is trying to fish them out, the developers still churn out fresh ideas to stay ahead.

How do you identify these fake apps?

· They have inauthentic branding and incorrect logos.

· Most of the time, their images and descriptions have errors, unlike legitimate companies who only publish clear images and descriptions.

· They have a poor user experience.

To evade such, make inquiries from the legitimate company’s website if they have an app. If they do, then download from a link provided.

6. Fake ICOS (Initial coin offering)

A study conducted in 2017 showed that 80% of ICOS were fake.

There are many fraudulent ICOS who’ve crafted fake white paper to dupe investors. They conduct marketing campaigns across social media platforms promising high quick returns upon investments.

Carry out extensive research on any ICO before buying it, the same to less known cryptocurrencies.

7. Use of malware and viruses

Fraudsters use malware and viruses to break and steal in your wallet accounts.

Ensure you have a two-way authentication (2FA) to protect your cryptocurrency account and robust antivirus program.

Think twice before you click on any links, to prevent phishing scams and malicious links.

And closely monitor your wallet accounts, credit cards, and bank accounts.

8. “Pump and dump” scams

“Pump and dump” scams are a price manipulation scheme.

Here

Fraudsters hype a certain cryptocurrency. They do this via their websites, blogs, and social media platforms.

They hype a cryptocurrency, which is low-priced but with high risks.

Once they skyrocket the value, they cash out and dump the crypto by selling it to naïve investors who think that this is the next big thing.

Be wary of cryptos that have low tradeoff volume but suddenly have a quick high rise.

Do in-depth research on the credentials of any cryptocurrency before investing in it.

9. Blackmail fraudsters

These fraudsters reach out to you, mostly via emails, claiming to have incriminating information about you.

And will instruct you on how to buy a cryptocurrency and send it to them.

Failure to which?

They will send the implicating evidence to all your contacts’ emails and social media platforms.

The phrases they use are that they have hacked your computer or have taken control of your webcam and recorded your malicious acts.

It’s all a lie!

They don’t have any incriminating evidence against you, and nothing will happen if you don’t send the crypto.

Ignore such threats.

Over to you

Know the risks involved before you invest in cryptocurrencies and how to be safe.

Because here…

Your account for your own security.

Slow down, be skeptical, learn, research, and be on the lookout for the latest red flags.

Mollyne Apollo is a passionate ghostwriter,blogger,and copywriter,working closely with B2C and B2B businesses.Contact her for a copy that converts.