Like it or not, cryptocurrency is everywhere these days, changing the world as we know it. It has a few qualities that make it unique to this asset class, such as decentralization, security, and the speed of innovation. If you’re just like everyone else, you invest in cryptocurrency to earn some money. Indeed, it’s so competitive that it’s rarely a profitable venture, but that doesn’t mean you can’t make money from cryptocurrency. There’s reason to believe cryptocurrency will be universally adopted in a few years and overtake traditional investments.
If you trade cryptocurrency like Bitcoin or Ethereum or are thinking about it, you need to know that cryptocurrency scams are currently driving online crime. Scammers want your tokens and will do anything to get their hands on them. To protect your digital assets, it helps to become aware of the most popular scams that are lurking around you. While malicious actors are always inventive, there are some tricks they commonly resort to. Here are some red flags to look out for.
Scammers Are Always Finding New Ways to Steal Your Coins
More often than not, scammers use dating websites and apps to trick unsuspecting victims into believing they’re in a long-term relationship. There’s a nickname for this practice: pig butchering. This dishonest scheme originated in Southeast Asia and is spreading globally, predominantly executed by cryptocurrency scammers. Countless people are looking for their significant other on the Internet, but instead of finding love, they find themselves swindled out of their money. If you’ve received a text or a chat message from a stranger with an attractive profile photo, it’s wiser to be suspicious.
In a romance scam, the threat actor plays with your emotions. After trust has been granted, they’ll randomly brag about how much money they’re making and even show you evidence of their gains. Before you know it, the scammer will pivot you to a discussion about investing. As you can imagine, it’s all a lie, so the money is deposited straight into the thief’s account. Not only do you risk losing your investment, but also the transaction fees. It’s estimated that worldwide damages were in tens of thousands of billions.
An impersonation scam involves copying identifiable elements of a person, brand, or organization for fraudulent purposes. To win the attention of potential targets, many fraudsters promise to match or multiply the coins sent to them. Equally, the scammer might tell you that they’re an IRS agent, FBI agent, or Amazon representative and convince you that the only way to protect your funds is to invest all your money into cryptocurrency. You might be tempted to transfer your money quickly in the hopes of safeguarding your account. Because scammers are skilled in social engineering, they’re experts in deception and manipulation. Never accept calls asking for your personal information, 2FA security codes or passwords, etc.
A rug pull means pulling out the rug. It’s a cryptocurrency scam in which project members struggle to raise capital and then remove the liquidity all of a sudden and disappear. Rug-pull scams are common with Web3 projects and NFTs and are part of a history of investment schemes. If a developer drains the liquidity, the program isn’t able to function, meaning that investors can’t withdraw their funds. Cryptocurrency is involved from start to finish. Other times, fraudsters inflate a token’s value and then immediately sell their own supply, which crashes the coin’s value.
You can protect yourself by choosing established cryptocurrency projects. For example, DApps using Ethereum have real-world applicability in finance, gaming, real estate, education, and so forth. You’ll need a wallet and some Ether. If you do your homework, you can multiply your gains. In case you didn’t know, conversion from Ethereum to the US dollar can be done at the current rate and the historical rate. Please check out the ETH price USD if you’re curious to find out more. Investing in a crypto project is exciting, but if you want to secure a decent return on the investment, do your homework.
Don’t Think You’re Immune to Falling for Shady Scams
Even experienced investors can fall victim to scams, so stop giving yourself such a hard time. Sophisticated fraudsters dupe anyone, no matter how clever they are. If you don’t want to become a mark, keep in mind that only scammers demand payment in cryptocurrency, guarantee profits/ big returns, and mix dating with investment advice. If you’re asked to share the seed phrase of your crypto wallet, take part in an investment opportunity, or restore your account, it’s just an attempt to steal your funds. Don’t fall for it.
Malicious actors will use high-pressure tactics to convince you a once-in-a-lifetime opportunity is available. They want you to act before you have time to think. If you happen to receive urgent payment requests, the best thing you can do is ignore them. Cryptocurrency transactions are irreversible, meaning that you won’t get your money back if anything goes wrong. When using a crypto exchange, double-check the site’s address to make sure it’s the right one. Obtain the URL from an official source, such as the exchange’s official LinkedIn account. Online fraud continues to grow with the increase of Internet sites, and fake websites are becoming a big menace.
All in all, as cryptocurrency evolves, fraudsters will continue to do as well. Be vigilant – in other words, be watchful or alert. You should only use secure, reputable platforms like Binance to enjoy strong security features like two-factor authentication, address whitelisting, and device management, to name a few. Don’t invest in the unknown and unknowable. Strategic thinking, deducing, and assessing will point the way to profitability. Your best line of defense is awareness and education, so understand why others fall for cryptocurrency scams.
If something sounds too good to be true, it most certainly is. Even if methods evolve and change, the tell-tale signs of a potential scam remain the same. The cryptocurrency industry doesn’t have a fraud problem, meaning that incidents aren’t commonplace, but it’s better to be safe than sorry.
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