How to Keep Safe from Cryptocurrency Scams

January 17, 2021

Reading Time: 4 minutes

Crypto-related scams have continued to be on the rise ever since cryptography virtual currencies gained popularity globally. Inasmuch as operating in a digital environment has many advantages, including peer to peer focus and elimination of third parties, cybersecurity issues are a real menace. Digital transactions are irreversible. This makes them a perfect target for scammers online.

The Financial Conduct Authority (FCA), in retaliation to the growing cryptocurrency-related scams, plans on banning sales and marketing of financial products that highlight popular cryptocurrencies such as Bitcoin from 6th January. The FCA is not stopping people from buying cryptocurrencies. It is set to ban the sale of crypto assets based on their prices, which becomes a better avenue to scam off unsuspecting individuals.

While we all remain to be awed by the decentralized finance markets, it is crucial to pinpoint the downsides involved. Just last year, the total money lost due to crypto scams netted approximately to1.8 billion. This article informs on popular scams in the crypto world and subsequent means to keep safe or navigate these circumstances.

How to Spot Investment Scams

First things first, we should understand the different types of investment scams.

  1. A totally made-up deal that cannot be proven
  2. Investment exists and is operational, but the scammer uses the money for personal gain other than investing in the promised deal
  3. The scammer pretends to be working for a reputable corporation to deceive you into his tricks.

Having this in mind, the following are the common means scammers use to launch self-benefiting attacks on unsuspecting investors, especially those new at this game.

Fraudulent Websites

The easiest assessment to check whether a site is as legitimate as it claims is to their authorization by the FCA. This is, however, only applicable in England. In the UK, each firm has to be authorized to conduct any type of financial service. The rest of us need to check whether the website courting you has a small lock icon near the URL bar. If a site lacks an HTTP/HTTPS in the address bar, take a step back and carry on further research.

There are instances where imposter websites are designed to look identical to the master site. These kinds of spam often redirect users to a different platform for payment. These tricks could be subtle as replacing a letter O with the number 0. It is imperative to check and cross-check and the web address you are working with lest you become a victim of these unpopular crypto-related scams.

Suspicious Tweets

If it is too good to be true, then the high chances are that it is not true. Commonly you will see a tweet by famous celebrities you follow campaigning towards a certain cause. Far too often, those could be fan accounts or worse- impostor accounts. Another key point to note and accept is that no one will ever give you free cryptocurrencies. As rude as it may sound, no type of profit-making business works like that.

Mid last year, Twitter was hacked in what they called ‘a coordinated social engineering attack,’ which scammers used to promote a large-scale Bitcoin scam. Popular profiles, including those of Joe Biden, Barak Obama, Kanye West, and Elon Musk, were hacked and used to lure thirsty investors into giving away their proceeds.

You ought to be very vigilant about who to trust in this business as it the only way we know how to keep safe from cryptocurrency scams.

Scam Ads on Youtube

Youtube has actively struggled with misinformation and outright scams. Despite lawsuits and google ad’s strict regulation, scams still find their way on the website and circulate for days.  In April, Ripple’s CEO filed a lawsuit against Youtube for failing to restrict giveaway scams that promise free XRP and ended up damaging the company’s reputation.

Ethereum founder, Vitalik Buterin, was recently featured in another scam front that was distributing free Ether coins. Unexpectedly, these ads were run on authentic crypto channels. When questioned, the perpetrators owned to playing foul by claiming the ads were reported on Youtube, but the site had not taken any apparent action by that time.

Social media sites have become a typical marketplace where crypto-related scams are masterminded and easily launched. Instagram, Facebook, Twitter, and even email are common targets to these scams, especially the pump and dump scams. It is up to us to be more discerning and faithfully avoid getting in business with anyone or corporation until you run a proper background check, especially if you are new to this type of business.

Mining Scams

Coin mining is what allows regular investors like you and me to make folds of money in the comfort of our homes without the need for any specialized hardware. Amazing indeed until the real challenge kicks in; what among the few cloud-mining services offered are authentic, and which ones just want to share in your hard-earned sweat?

A quick way to identify malicious offerings is by a promise of high returns in just a short span. Again, if a deal seems too sweet, think twice. Authentic companies should never guarantee a profit.

Another way scammers can manipulate us is through crypto-jacking. This defines a scenario where a scammer uses your computer’s processing power without permission to mine crypto for their own benefits. To remain safe from mining scams, consider integrating browser extensions such as adblocker to defend against crypto-jacking, alongside taking extra caution with the sites you visit and referral links you click on.

Impersonation Scams

At times, fraudsters may pose as customer support for real companies and contact customers through spammed phone numbers available on the internet. Customers in need of help are more likely to be the victims here. To avoid being prey to such skims

  • never give out remote access to your machine to ‘claimed support,’
  • never disclose your two-factor authentication security codes or passwords.
  • Never share your private keys with others

Conclusion

Crypto-related scams have kept on evolving to lengths that are undetectable to any non-discerning eye. This will, however, not stop us from continuing to invest in the crypto space. Before settling on a DeFi project, conduct a history check on the organization and analyze its history of hacks and data breaches.

If you happen to be contacted by a company out of the blues, offering deals too good to be true and pressuring you to make a decision without much recollection, it is probably a scam. At mycryptoparadise.com, we are keen to ensure you are guided wholesomely in an effort to keep you safe from common ignorance-induced scams in the crypto-space. The perfect example is our copy trading methodoly that guides more beginners more accurately by examples.

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