How Do I Avoid A Cryptocurrency Scam The Safest Way Possible?
I’m sure by now you’ve heard of cryptocurrency due to the sudden rise in people using it. If you haven’t let me make it simple for you! Cryptocurrency is primarily a digital currency that is designed to work as a medium of exchange through a computer network that does not rely on any central authority which includes a government or a bank. It’s mainly a digital payment system that operates without any bank verifying the transaction.
The cryptocurrency has a peer-to-peer system that allows anyone to send or receive payments. Whenever you transfer cryptocurrency all the transactions are recorded in a public ledger and the currency itself is stored in digital wallets.The unique name comes from the encryption that is used to verify the transactions. Encryption is used primarily to add a level of security to the funds. The very first crypto currency was Bitcoin which was founded back in 2008 and is the best cryptocurrency so far.
However, there’s a disadvantage to the sudden rise in crypto currency since it has exposed a wide range of possibilities for hackers to hack the system and take advantage of a few loopholes in the blockchain to scam millions of people around the world.It has been estimated that more than 650 million dollars have been targeted in cryptocurrency thefts and fraud in 2021. This article discusses the tips and tricks to avoid crypto currency scams.
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Table of Contents
Conduct Thorough Research
The number one tip to avoid being scammed is to conduct thorough research of whichever website or organisation you are looking to invest in. It is crucial to conduct research before investing in your crypto currency. You can research on the official crypto website to find out more about the founders, developers, and previous projects.
If you feel that something is off or doubtful you can refrain from investing. You can also ask a few friends if they have ever invested and it’s best to invest in places and companies that have a good reputation and are known for successful projects. Additionally, be aware of some of the most common crypto scams in the market.
1. Phishing Scams
Phishing scams also take place in cryptocurrency and they mainly target information which is related to the online wallets. The scammers are very interested in the crypto wallet and the private keys which are mainly the keys to access all the crypto funds within an individual’s wallet. These phishing scams work like many standard scams and the scammers mainly send an email which leads all crypto holders to a third party website.
This link is mainly a third party link that leads all the fund holders to a website that asks for private key information. If someone enters all their information thinking it is their verification or an actual website they can easily get scammed. The scammers acquire this information and thereby can easily access all your funds because they have the private key. These phishing scams are very common and almost 114,700 were victims of phishing scams in 2019. These people lost almost 57.8 million dollars which are 500 dollars per person through these phishing scams.
2. CryptoRomance Scams
By its unique name, I’m sure you can already tell what romance scams are and what they are related to. Ironically love hurts and in this case it hurts a little too much. These scammers make fake profiles on online dating websites and target people they believe are in long-term relationships. Once the trust is achieved through fake conversations and through fake promises they go on to attack the innocent hopeless romantic.
They turn the conversations towards lucrative cryptocurrency opportunities and talk about transferring coins or account credentials. Since romantic people fall prey and fall for this trap they often give all this information to the scammer and hence they are scammed. It has been reported that almost 20% of all the money that is lost in cryptocurrency scams is attributed towards romance scams. This is by far the easiest way to scam people because the scammers make everything sound believable and gain the trust of people before scamming and stealing hundreds of crypto coins.
3. Imposter Scams
Imposter scams by their name make this method of scamming very clear. Scammers often pose as celebrities, influential political figures, family members, friends, cryptocurrency influencers or representatives or businessmen. They capture the attention of people through these profiles and they always promise that they can easily multiply this money and will send double of whatever payment is sent to them.
They carefully curate and craft messages which makes their entire profile seem real. They also buy followers and publish fake reviews. Don’t fall for this scam. It’s all part of their master plan to scam you and then vanish. They create a mythical once-in-a-lifetime opportunity that leads people to transfer their funds because they wait for an instant return.
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4. Investment or Business Opportunity Scams
This is yet another popular way for scammers to extort massive amounts of funds. The scammers pose as investment companies and present you with an offer that is just too good to be true. Beware if something is too good to be true it probably isn’t true. These scammers create fake profiles and attract people by promising them high returns and telling them this is an excellent opportunity for business. They guarantee incredibly high returns and promise double of whatever you send them. They create e fake profiles and communicate with the individuals makes it all very believable.
There are several people who are looking for profit and hence they are victims who go to these misleading websites which offer high returns and other benefits for which large sums of money need to be invested. They promise the larger the amount of money people invest the higher the returns will be. These websites are simply a ploy to extract huge sums of money from people. Don’t call for such fake websites because you can’t get large returns by simply doing anything. It’s not a fairytale so snap out of it.
Avoid Imposter Websites
The most common way that scammers use is imposter websites. They create fake profiles of crypto representatives and act as they are cryptocurrency influencers. Avoid entering your private information on such websites and avoid investing in such websites. If you feel any offer is too good to be true, avoid such offers; they’re most likely to be scams.
These are imposter websites that prey on your information to access your funds and to scam you. Any website that seems unsecured and seems a little odd are most likely fake and it’s best to avoid such websites. It’s best to refrain from clicking on such imposter websites because they will likely get our hundreds of crypto funds.
Protect Your Wallet & Private Keys
Your private keys are the main way through which scammers can easily access your funds. The private keys are the keys that are needed to access your funds and thereby use your cryptocurrency coins. These private keys need to be secured and never enter any information related to them on any website. Many imposter websites, as well as phishing scams, ask you for private key information which leads to you being scammed.
Hackers and scammers pretend to be representatives of cryptocurrency companies and platforms such as Coin-base to trick and manipulate you into giving them this information. However, you should know better than no crypto platform ever asks for private key information and these representatives are likely fake. Protect your wallet and your private keys by keeping all such information to yourself.
If you invested in a new cryptocurrency and found that you were scammed, then reach out to us to help your recover your money.
Moreover, all wallets carry two types of keys that are mainly private keys and public keys. Ensure that you never disclose your private key to the public and you keep it secured. The best and safest option for storing private keys is cold wallets. Cold wallets are offline wallets that are mainly used for storing bitcoins. Since they are not connected to the internet it protects the coins and keys from unauthorized access, hackers, and cyber attacks which are more likely to be done through the internet. Many cryptocurrency investors use cold wallets to keep their holdings safe from hackers and private keys can also be stored.
Understand The Science Behind Crypto Scams
The rise of crypto currency and the popularity of cryptocurrency has attracted so many scammers, hackers and fraudsters and has led to an exponential rise in crypto scams worldwide. Cryptocurrency scams are considered to be the latest crisis of social media. New consumer reports by the FTC( Federal Trade Commission) have shown that social media platforms such as Instagram and Facebook have become the hub for scammers to ply their trade. Mainly investment-related fraud has become the biggest scam that is perpetuated by scammers on social media. There was a 770 million dollars loss that was reported simply from social media scams in 2021.
This was an exponential increase from 2017 when there were only 5000 reports of fraud to currently 100,000 reports of fraud in the year 2021. This shows a 19 fold increase with almost 18 times greater losses than in 2017. These figures are a clear representation of the sudden rise in crypto currency scams and theft. The numbers don’t lie and are clearly representing the increase in crypto scams because the scammers and hackers are suddenly attracted towards cryptocurrency.
The scammers mainly use social media platforms to pose and pretend as celebrities, friends or family members that in turn is encouraging people to make investments that are bogus. These investments are mostly requested through crypto currency and the people are promised huge returns. The scammers also create fake profiles of investment companies pretending to be helpful towards the consumers and attract them by high returns, however the investments and everything else is fake and they easily get away by scamming people. On popular social media platforms such as Twitter, Instagram and Facebook the scammers are hacking the pre existing profiles of people and then asking them for money to be transferred in crypto currency such as Bitcoin.
In 2020 an 18-year-old hacked in Florida was arrested since he hacked into the Twitter accounts of Joe Biden and Bill Gates. The hacker used the account to ask for crypto payments and promised that the payment would be doubled and returned. This contributes to over 100,000 dollars of losses. Scammers also hacked Elon Musk’s Twitter account and people lost almost 2 million dollars. In addition to this impersonation, scammers also pretend to be partners on online dating sites, friends and are also pretending to be representatives of Coin-base which is yet another well known and popular crypto exchange platform. It is reported that scammers had a major pay day last year because they scammed people and brought back 14 million dollars. Learn more about crypto scams by visiting our website!
I’m sure you’ve gone through the various reasons attributed towards the sudden rise in cryptocurrency scams and fraudulent activities. The article gives you tips and tricks to avoid these scams because even crypto currency is not immune to hackers and scammers. The sudden rise in people using the cryptocurrency has attracted a lot of scammers and hackers.
So when the rate of crypto currency users is increasing so is the rate of scammers and hackers. Several retail investors, speculators, investors and businessmen have been attracted towards crypto currency which has thereby attracted scammers, fraudsters and thieves.
It has been reported by the Federal Trade commission that from October 2020 till March 31 2022 there have been several reports of crypto currency related scams and almost 7000 people have lost more than 80 million dollars. There has been a 12 fold increase and a 1000% increase in the losses. This goes on to show that there is an exponential rise in crypto scams thereby it is crucial to be aware and protect your cryptocurrency.
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