Last Updated on 1 year by Komolafe Bamidele
Cryptocurrency is a huge deal right now, and scammers are taking notice.
Over the last few years, the industry has seen a rise in the popularity of crypto and blockchain technology, which has gotten investors all riled up.
However, that’s also gotten fraudsters’ attention – for many crypto scams, 2022 will be their most enormous opportunity yet to make a big haul from naive investors.
Love it or hate it, cryptocurrency investors are opening themselves up to new risks – especially when trading on centralized exchanges that have fallen prey to hacks in the past.
If you want to invest in cryptocurrency or have already made your first crypto investment, here are some things to look out for.
Which are the Types of Cryptocurrency Scams?
Below, we’ll have a look at some popular scams in which people lose their Bitcoin, Ethereum, XRP and other coins.
The Classic Social Engineering
The act of social engineering involves using psychological manipulation and deception to gain control over vital information relating to the security (i.e., the keys) of users’ cryptocurrency accounts.
This is done in order to steal their cryptocurrency. One way this can be done is by making people think they’re dealing with a trusted entity.
Cyptocurrency Romance Scams
Scammers often use dating websites to trick people into thinking that they’re in a real relationship — just so they can get their hands on your cryptocurrency.
As long as you’re using common sense, cryptocurrency scams like this should be easy to avoid.
But even if you do get tricked, you can get help from other people who’ve been scammed, because cryptocurrency scams like these are all the rage right now.
NFT Tokens Bubble
If you’re looking to get rich quickly, selling blockchain-based gaming tokens is a bad idea.
The gaming industry is great at making people think they’re getting rich quickly while they’re actually not.
Scammers are excellent at taking advantage of things that are popular, and if gaming is hot right now, then scams will follow.
Cryptocurrency Market Opportunities
Buying cryptocurrency will not necessarily make you rich all the time. In fact, you should only buy XRP or other coins from reputable companies.
While Bitcoin and other coins are thriving, they’ve also drawn scammers aiming to capitalize on the enormous wealth that can be accumulated by cryptocurrency.
The key to avoiding these scams? Research. Research your startup of choice; read their whitepaper; figure out who’s running it; how it works;
what the mission is; the tech behind it; everything you can do to make sure that your money goes into something legitimate.
ICOs Cryptocurrency Scams
The Initial Coin Offering, or ICO, is a major player in FinTech right now.
It’s a new crowdfunding method that gives startups the chance to raise funds for their projects from people who are interested in it.
ICOs can be revolutionary for startups. But beware: there are many scams out there, and the government isn’t involved at all.
Blackmailing Attempts
Scammers like to blackmail you. They claim to have records of your private browsing history and other naughty stuff in such emails unless you pay up.
Also, scammers like to try and blackmail you by claiming to be IT staff and know about your online activity, therefore demanding that you pay them in bitcoin.
These cases represent a criminal extortion attempt and should be reported immediately.
Red Flags for Crypto Scams
- Fake influencers claiming they are popular – if you come across someone who pretends they are a guru or something, run away.
- Free bonuses, free money or anything “FREE” – there are a couple of things you need to know in this life and one of them is that nothing comes for free.
- Easy money – same as the freebies. If it was so easy to make money, everyone would make a lot.
- Fine print suspicions – usually, the scammers want to sound legitimate and offer you a contract. However, in the T&C’s, the first thing you need to do is check the fine print.
How To Protect Your Money?
Your digital wallet is not as protected as you think. Hackers are targeting wallets regularly, and the chances are that it’s going to happen to you, too if you’re not careful.
Make sure that your wallet is protected with the same forethought that you’d use for a literal safe – meaning, treat your crypto as if it were paper money.
Wrapping Up Common Cryptocurrency Scams
The new wave of cryptocurrencies has brought its fair share of problems, but it’s nowhere near as bad as it’s made out to be.
That said, the only way to stay safe in such a volatile market is to learn about what makes cryptocurrency scams tick – and how you can avoid them.
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