Crypto Scams and How To Avoid Them [Crypto Tips and Know Hows]

Cryptocurrency’s popularity has brought about lots of interested investors and traders. However, scammers and fraudsters that flock into the crypto market see this as an opportunity.

Scammers are always seeking new ways to steal your money, and the tremendous expansion of cryptocurrencies in recent years has opened up many doors for fraud. In 2021, cryptocurrency crime set a new high, with fraudsters stealing $14 billion in cryptocurrency. This data is according to a recent report published by blockchain data firm Chainalysis. Being aware of the risks is critical if you’re interested in cryptocurrency. Continue reading to learn more about frequent cryptocurrency scams and how to recognise and prevent them.

Crypto scams come in all shapes and sizes. These are the scams and frauds involving cryptocurrencies.

1. Fake Internet Sites

Scammers sometimes develop bogus cryptocurrency trading sites or false versions of official crypto wallets to deceive unwary customers. These fake websites are modelled after real crypto websites. Thus they’ll be convincing enough, especially to beginners at crypto trading and investing. These fake crypto sites work either of the following ways.

As phishing pages: The scammers get all the information you submit, including your crypto wallet password and recovery phrase, as well as other financial information.

As simple theft: The site may first allow you to withdraw a small quantity of money. Then when you begin getting these profits, you’ll get encouraged to invest more, but when this happens, you’ll withdraw your money, and the site will decline this request.

2. Phishing Scams

Phishing scams frequently target the most popular crypto stored in crypto traders or investors’ hot wallets. Crypto wallet private keys, which are required to access funds within the wallet, are the target of scammers. Their mode of operation is similar to previous phishing scams and is linked to the bogus websites mentioned before. This scam will send emails to unknowing crypto traders, which will ask them to provide their private information and keys. Having obtained these data, the scammers can now access the trader’s funds and transfer them to their own.

3. Pump-and-Dump Crypto Manipulation

This crypto manipulation fraud involves traders hyping up a particular coin or token via email or social media platforms like Twitter, Facebook, or Telegram. Traders hurry to buy the coins because they don’t want to miss out, driving the price. After successfully raising the price, the con artists liquidate their shares, resulting in a crash as the asset’s value plummets. This can happen in seconds.

4. Fake Apps

Next, are the fake apps scammers made available even to Google Play and Apple App Store. These apps are also a way to target unknowing and novice traders who would want to trade using their phones. These apps are easily detected and removed. However, there are still victims of these fake app scams. Thousands of people have downloaded fake cryptocurrency apps.

5. Giveaway Scams

A giveaway scam is another website scam that offers to equal or multiply the crypto a trader or investor transferred to the scam website. These scams usually come with clever messaging from what appears to be a legitimate social media account that can instil trust and generate a sense of urgency. This ostensibly “once-in-a-lifetime” opportunity may tempt people to send money rapidly in the hopes of receiving a quick payout.

Is Crypto a Scam?

Crypto is not a scam. However, many trading scams exist due to their popularity; these scams and frauds are sophisticated and convincing.

Ways to Protect Yourself From These Crypto Scams:

1. Sign up with a legit cryptosystem.

Research a crypto trading website, broker, or cryptosystem before registering and funding your account. It is better to go for a reputable and well-known crypto exchange like Binance, brokerage sites like Robinhood, or even a cryptosystem connecting you to regulated crypto brokers like Immediate Edge. We recommend reading reviews about all three platformsm so you can form your own opinion better:

2. Protect your wallet and manage it with caution.

You’ll need a wallet with private keys to invest in cryptocurrencies. If a company asks you to share your keys in exchange for an investment opportunity, it’s almost always a hoax. Keep your wallet keys safe and secure.

Furthermore, Send a small amount the first time you transfer money to confirm the integrity of a crypto wallet software. If you notice strange behaviour while updating your wallet app, stop the update and delete the program.

Finally, do not invest or trade money in crypto that you can’t afford to lose, just as with any investment opportunity. Even if you aren’t being conned, Bitcoin is a volatile and speculative asset, so you must be aware of the hazards.

3. Only invest in things you understand.

If you’re unsure how a cryptocurrency works, it’s advisable to take a break and do some more research before deciding whether or not to invest.

So when scammers use high-pressure techniques to persuade you to invest money immediately, don’t. Be sure that you’ve done all necessary research before investing or trading, even if you are offered such promising bonuses or discounts if you engage immediately. Before you invest any money, take your time and do your homework. Research.

Therefore, research is your best guard and armour in the crypto industry. The most widely used cryptocurrencies are not a scam. Bitcoin and Ethereum coins are popular for a reason. If you’re unfamiliar with cryptocurrency, do some research on it. See if there’s a whitepaper available, learn who manages it and how it works, and check for credible reviews and testimonials. Check for scams with an up-to-date and reputable phoney cryptocurrency list.

4. Be cautious of advertisements on social media.

Crypto scammers frequently utilise social media to promote their fraudulent schemes. They may establish authenticity by using unlawful photos of celebrities, high-profile entrepreneurs, good freebies, or free money. Thus, when you see ads like these on social media, always have some sense of doubt and research before trusting the website.