Cryptocurrency Scams
Introduction
CRYPTOCURRENCY
SECURITY
Intro
Before you join the crypto world and start investing in digital currencies, you should understand how it works, and what are the risks involved.
It’s true that you can earn a lot of money from cryptocurrencies, but you can also easily lose your investment if you put your trust in the wrong people.
Just like in the real world, you’ll find a lot of people with bad intentions, willing to take your money at any moment.
Before you join the crypto world and start investing in digital currencies, you should understand how it works, and what are the risks involved.
It’s true that you can earn a lot of money from cryptocurrencies, but you can also easily lose your investment if you put your trust in the wrong people.
Just like in the real world, you’ll find a lot of people with bad intentions, willing to take your money at any moment.
ALWAYS BE PREPARED
It’s important to always be prepared and informed, and to take the appropriate security measures in order to keep your investments safe. In this section, we are going to present you with some of the most frequent cryptocurrency scams, and then we’ll discuss how to avoid falling for them.
Most frequent cryptocurrency scams
It’s extremely easy to fall for the get-rich-quick schemes, and simply ignore some obvious signals that give away the fact that you’re being scammed. You need to stay focused at all times, and most of all, be informed. Never trust someone explaining something you don’t understand. Always take every piece of advice with a grain of salt.
ALWAYS BE PREPARED
It’s important to always be prepared and informed, and to take the appropriate security measures in order to keep your investments safe. In this section, we are going to present you with some of the most frequent cryptocurrency scams, and then we’ll discuss how to avoid falling for them.
Most frequent cryptocurrency scams
It’s extremely easy to fall for the get-rich-quick schemes, and simply ignore some obvious signals that give away the fact that you’re being scammed. You need to stay focused at all times, and most of all, be informed. Never trust someone explaining something you don’t understand. Always take every piece of advice with a grain of salt.
BEWARE OF THE Fake ICOs! (Initial Coin Offerings)
The ICO phenomenon has been skyrocketing recently, with new cryptocurrencies coming out every day, all of them promising to be better than the others, with various novelties. While it’s true that most ICOs are genuine, you need to be aware that some of them can be, in fact, scams. You will often see various coins launching with no whitepapers, business plans, or any kind of technology behind them.
It’s also not uncommon to see new altcoins coming out with various unsubstantiated claims as an attempt to become viral. As a rule of thumb, if something seems too good to be true, it probably is – especially in the world of cryptocurrencies. Always do a proper research on an ICO before investing in it, find out as much as you can about who’s in charge of the project, read their whitepaper and check out their developer team. If the team behind the ICO is anonymous or very weak, you might consider looking into another one.
AWARENESS CAN SAVE A LOT OF MONEY
Always check if the whitepaper has enough information and is comprehensive, and if their roadmap is clear and transparent.
This can give you a good understanding of whether the developing team has long term plans with the project, and whether they take their job seriously.
After all, no investors would like to trust their money with someone who doesn’t have a plan.
Ponzi schemes
This kind of scam is presented as an investment scheme, that promises incredible returns over extremely short periods of time, with “no risks” associated. Usually, scammers will set up a website and explain a false system that will take your bitcoin and multiply it over and over again, without requiring you to do anything.
Sometimes, in order to gain credibility, some of the first users who sign up will actually receive some money in return. What they aren’t aware of, however, is that this money comes from the people who invested right after them, and so on. At the beginning, the website might look real, and you might see your balance increase, without you even touching the account.
Scammers will usually take their time and set up various marketing and social media campaigns, in order to draw attention and attract as many people as possible. They might even offer legit services for a certain period, until enough money has been raised. Afterwards, when they’ve raised enough capital, they will typically either simply disappear and never come back again, or claim that they’re going under maintenance or that they’ve been hacked, and run away with the investors’ money.
Once again, if a service or website promises you unbelievably good return on your investment with little to no risk, it might be a sign of a Ponzi scheme.
Fake exchanges/wallets
There are hundreds of unregulated platforms and brokerage companies out there, and some of them unfortunately prove to be scams.
As an investor, you should always trust your capital with a legitimate company, that doesn’t promise you services which are simply too good to be true. There have been many cases where people deposited their money on ghost exchanges or wallets, which later on proved to be scams.
One way that this kind of scam works is that once you request a withdrawal or you want to get out of the exchange, the company will either not respond to your requests, or claim various reasons as to why they’re delaying your requests.
Sometimes, this can end badly, and you might not see your money again.
Fake exchanges/wallets
This is another extremely common way through which many people end up losing their capital every day. If you’re in the crypto world and have actual investments out there, in various online accounts, you really need to take an extra step in keeping your computer secured. You might one day open the wrong email and download an attachment – and in a matter of minutes all your investments can be gone.
The digital world is continuously evolving day by day, and unfortunately, so are the digital attacks. Recently, a new type of malware has been released, which specializes in stealing bitcoins. It can reportedly either steal the login details from your wallet or exchange, or act like a middle man in your transactions, and hijack them.
If you want to be really cautious about your investments, you might want to use a dedicated computer only for your crypto activities. Using two-factor authentication is also highly recommended.
Join Our Newsletter
Be the first one to find out about the latest news, and use them in your advantage!