Are you interested in investing in cryptocurrency, but worried about falling victim to scams? With the rise of cryptocurrencies, it’s becoming increasingly important to be aware of the most common types of scams. From phishing scams to rug pulls, there are many potential pitfalls to watch out for. In this week’s blog, we’ll cover the top cryptocurrency scams and provide you with the tools you need to protect your investments!
Phishing Scams
Phishing is known as one of the most common and effective scams. A typical phishing scam is when a fake website or email is used to trick a user into giving their sensitive information, like login information or even private keys and seed phrases. Emails can appear to be from legitimate and trusted companies or personal contacts like family or coworkers. Scammers receive the victim’s information on their end and can use it to steal funds out of their wallets.
Tips:
Always verify the sender of an email to make sure it is legitimate.
Pay close attention to grammar and spelling in the body of the email.
Do not click links in suspicious emails or enter your credentials on unofficial websites.
Romance Scams
Romance scams are a traditional type of scam that has evolved over time and unfortunately found the crypto space. In romance scams, scammers create fake accounts on online dating websites to connect with people. Scammers work quickly to establish trust and ask for payment for various reasons such as travel, food, or even medical procedures. It’s also common for the scammer to deny voice or video calls due to poor internet connection.
Tips:
Never actually seeing the other person is a red flag.
Think rationally, not emotionally when conducting yourself in this situation.
Rug Pulls
Rug pull scams are a new type of scam originated from the crypto space itself. A new crypto project or coin can pop up out of nowhere promising that it’s the “next big thing”, causing many people to invest in it. The project might even build a tight-knit community on social media. When many people start to invest in the project due to the Fear of Missing Out (FOMO), it drives the price sky-high. Once the coins are liquid enough to be sold, the scammers, who own the project and the majority of the coins, will sell everything and disappear.. This leaves the large number of holders holding a next-to-worthless coin.
Tips:
Do your own research (DYOR). Don’t trust the opinions or statements of strangers on the internet, especially when it comes to investing your money.
Investment/Trading Scams
Another common crypto scam is a simple investment or “get rich quick” scheme. Scammers commonly contact potential victims through social media, promising huge returns in exchange for a small amount of Bitcoin. Fake exchange websites may be involved as well, attempting to appear as a legitimate cryptocurrency company. Another way this scam might work is when the scammer informs the victim that their cryptocurrency holdings have significantly grown, but must send crypto to release the funds. When the victim sends Bitcoin to the “exchange”, they are essentially lost to the scammer’s wallet.
Tips:
If an offer is too good to be true, it probably is.
Closely examine the URL of the website you’re using.
Remittance
Some scammers may pose as family or a stranger in another country and ask for your help in withdrawing crypto. They may claim that they have crypto in their wallet but don’t have enough funds to send it or withdraw it, and ask for you to send crypto to them to assist them. To convince the victim to do this, they may even promise a share of the withdrawal. If you send crypto to help, it will be lost to the scammer’s wallet.
Tips:
Never trust strangers on the internet, especially when they ask about money.
Research how withdrawing crypto works on a variety of platforms – you’ll soon find out that they’re lying.
Military
Military scams are similar to romance scams. Victims are contacted by a scammer posing as a member of the military stationed in another country, and asks for money to be sent to them for a flight home. If asked for documentation, scammers commonly send fake ID cards and registration information.
Tips:
Pay close attention to spelling and grammar in communication.
Closely examine any documents sent to you to determine their authenticity.
Blackmail
Blackmail emails are a traditional scam in which victims are contacted by a stranger claiming that they have possession of compromising data such as photos, videos, and other sensitive information. They’ll threaten to release whatever information they have if you don’t pay them in cryptocurrency. Of course, the scammer is just bluffing and you should delete the email immediately.
Tips:
Check the email address of the sender to verify their identity.
These emails are a well-known scam and are better off ignored or deleted.
Employment
Employment or job-posting scams are when victims are contacted by a seemingly legitimate company about a newly opened position, requiring payment to start onboarding. If the victim sends cryptocurrency to the company, it will not be returned to them as transactions are irreversible.
Tips:
Verify the legitimacy of the company you’re talking with.
Never send money to someone or a company that you haven’t met personally.
Fake Giveaways
As cryptocurrency gets more popular on social media, fake celebrity giveaways do too. Scammers pose as a celebrity, offering to give away free cryptocurrency to their audience. However, it’s not actually free. The victim is directed to a fake webpage that requires them to send cryptocurrency to an address in order to receive the giveaway prize. If you send crypto to the address, it will be lost to the scammer’s wallet.
Tips:
Closely check the social handles of the celebrities you may encounter doing giveaways.
If you are required to send money in order to receive winnings, it’s most likely a scam.
