Ethereum, Bitcoin, Dogecoin – you’ve likely heard about these cryptocurrencies by now. More businesses started embracing them as digital payment methods, and many consider them appealing investments. Cryptocurrencies currently value more than $1 trillion, and they won’t go away anytime soon – and the same is true for all the scams that occur in this market.
Financial investments alone involve several risks, but your cybersecurity doesn’t have to be one of them. That being said, here are some of the most common crypto scams to watch out for.
Blackmail cryptocurrency scams
Blackmail, also known as extortion, is an old scamming approach. It occurs when you get an email saying that someone has compromising data about you, such as private information, photos or videos, and asking you to pay money or otherwise, this information will be released.
In the crypto world, this scam occurs when someone asks to pay in crypto because it’s impossible to reverse the transactions. If anything like this happens to you, report the scammer to the authorities.
Impersonation crypto scams
Cybercriminals often fake their identities to convince people to carry out crypto transactions. They pretend to be a trusted source, such as government authorities, banks, or credit card providers and ask you in an email to complete crypto payment.
The government doesn’t yet regulate crypto, and not all ventures currently accept it. Therefore, it’s paramount to keep this in mind and be cautious when receiving this kind of email request. As a safety measure, you can double-check with that particular source via another communication channel and determine whether the website is trustworthy before performing any transactions.
Social media scams
These scams are also common in the crypto world. They can take the form of a fake social media post or an ad requesting crypto payment. Other users may respond to such a post or leave reviews, making it look like a real opportunity. However, these users may not be people but bots. Or, the post could be from someone who has fallen victim to hacking.
You should also beware of influencer cryptocurrency scams that happen when someone encourages users to send them payments that may increase. Remember these scams next time you notice the next crypto post or advertisement. After all, you can never really trust social media because things may be different from what they seem.
Business opportunity scams
Business opportunity scams occur when you get an unsolicited offer to become a crypto investor. You’re lured to a fraudulent site and encouraged to invest and make a profit quickly.
The website may even include testimonials or celebrity endorsements to make it look reliable. But it’s only a scam. After completing the transaction, the offer isn’t at all fruitful. It’s pretty much the opposite – you only lose your money.
Like blackmail, phishing scams are an old-school cybercrime that happens over email and implies a request for money. They are similar to impersonation scams, meaning that cybercriminals pretend to be trusted sources. The ultimate goal is to get your personal data that they will later use to access your credit cards or bank accounts. Cybercriminals send repeated emails hoping to get what they want by tricking people with this tactic.
For phishing crypto scams, the fake payment request is in the form of crypto. Cybercriminals may even pose as a crypto enterprise disclosing their initial coin offering to seem authentic.
Since they are used as a digital payment method, different apps were designed for several cryptocurrencies. Cybercriminals are very skilled at replicating these apps – in 2021 alone, over 300 000 downloads of fake apps led to banking credentials being stolen from victims.
By downloading these fake apps, users send payments directly to scammers. Hence, it’s paramount to watch for some red flags before downloading a particular app to ensure it is legit.
What are some warning signs of fraud to look out for?
Now that you know about the most common crypto scams, it’s time to learn how you can recognize them. Here are some common warning signs of fraud:
- The offer seems unrealistic;
- The request for payment is urgent;
- You’re asked to make a payment via social media;
- You get threatening messages;
- The post or ad has a lot of enthusiastic reviews;
- You get ‘guarantees’ to become rich instantly;
- The site’s address bar doesn’t begin with HTTPS.
How can you avoid cryptocurrency scams?
You can definitely prevent a crypto scam if you know how to recognize it. With that in mind, here are some tips that will help you stay safe and invest with confidence:
- Do your research before investing. There are many cryptocurrencies out there, and they continue to evolve. Before investing in any of them, it’s paramount to do your research – after all, you can’t put your money into something you don’t know anything about. Perhaps you want to invest in popular crypto like Bitcoin. In this case, you may be tempted to jump all into it – after all, everyone is investing in this crypto, so it’s reliable, right? While this is true, you still need to check the bitcoin price chart beforehand and determine whether you can get the most out of this investment by learning everything about this coin. Similarly, you want to know whether the crypto you want to invest in is associated with complaints or scams.
- Don’t pay attention to urgent requests. Urgent payment requests are generally a red flag pointing to a scam. If they hit your inbox, you should delete them right away or mark them as spam. Remember, if someone really needs money urgently, they will reach out to you in another way than asking you to make a crypto payment.
- Beware of ‘get-rich-quick’ scams. ‘Get-rich quick’ opportunities may be alluring, but any guarantees and promises to make money right away are usually scams. Crypto itself is an investment that comes with opportunities. However, it won’t make you a billionaire overnight, and you must be in the game for the long run if you want to make a profit.
- Report any suspicious activity. If you fall victim to a scam, you should report it to your crypto exchange, the Federal Trade Commission or the Securities and Exchange Commission. Doing this will keep the crypto exchanges safe for everyone else using them.