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Cryptocurrency scams and frauds online you should know

The continuous advancement of technology has motivated people to create innovative ways and adapt to the digital world. One of these is cryptocurrency, a digital currency that uses blockchain technology or a distributed ledger which makes it decentralized. 

As the number of interested users increases, more and more altcoins emerge online which shows the popularity of cryptocurrency. Investors all over the world are consistently buying and selling their coins to interested buyers. Additionally, its decentralized nature makes it easy for people to track and control their money whenever they want. With all these combined, it shows that cryptocurrency is the future of money.

However, this great traction has also attracted hackers and people with malicious intent. They use this as an opportunity to scam innocent people on the internet for the sake of greed and satisfaction. If you want to stay safe online when conducting cryptocurrency transactions, here are some examples of cryptocurrency scams 2021 you should know:

  1. Fake websites

Unfortunately, not all websites on the internet are real, but hackers possess great skills to make them look trustworthy and reliable. To spot a fake website, the first step is to see if there is a padlock at the beginning of the URL at the address bar. You should check if the link starts with ‘https’ because this guarantees that the website you are visiting is secured. 

  1. Fake applications

Aside from websites, you also need to be vigilant when it comes to fake mobile applications. These are created by hackers and are designed to collect your personal information, which they can use to hack your other accounts. 

Fake applications are also found in digital distribution services like Android’s Play Store and iOS’ App Store, where you’ve downloaded your other mobile phone applications from. You can spot this easily by checking the reviews, the press information and the company that developed the app. These will give you clues if an app has enough information to verify its authenticity.

There are a lot of fake cryptocurrency apps in application stores, and their developers do everything they can to make them look like real crypto apps. 

  1. Phishing scams

Phishing scams are the most common attacks that people encounter on the internet. These occur via text messages or emails where the contents contain a link as well as a message that makes you click out of familiarity. 

As soon as you click these links, you will be directed to a site that requires you to provide information such as passwords and private keys. By entering these, you are already giving your crypto fund access to the hacker who made that phishing scam. Always remember that real notifications from crypto wallets and exchanges will never ask for your personal information. 

  1.  Blackmail and extortion scams

Beware of blackmail and extortion scams because they will include security and data breaching, private photos and videos leakage and other things that can be used against you. 

For this kind of fraud, scammers would use anonymous accounts to send emails and messages to you. These would contain something like: ‘Your private photos will be exposed on the internet if you do not provide your private keys.’

This kind of scam is an example of criminal extortion because these scammers are using your fears so you can shell out money. When this happens, you need to inform the authorities immediately.

  1. Investment and business scams

Scammers and hackers get smarter because they are creating more scams that can easily fool you. They would use investment and business opportunities to target people who are interested in this industry. Furthermore, scammers would go all the way to create detailed proposals that will make people cash out big money since they are promised larger rewards. 

You will encounter misleading websites that contain empty promises of great and fast returns. The best way to avoid this is to analyse whether their offer and promises seem too good to be true. If it falls in this category, it’s most likely to be a scam.

  1. Fake celebrity endorsements on social media

Nowadays, celebrities are also interested in investing their money in cryptocurrencies. Personalities like Elon Musk and Snoop Dogg are openly expressing their interests in digital coins, which motivates people to join the bandwagon. With this said, scammers would create fake accounts on any social media platform similar to the ones that these celebrities have. They would use these accounts to post status updates containing suspicious links that can lead you to phishing websites. 

To avoid this scam, you need to check if the account that posted such crypto endorsement is the verified and real account of a celebrity. Often, verified accounts contain a check logo beside their name holders.

How to identify and avoid cryptocurrency scams

With the numerous scams and increasing number of victims, you need to protect yourself by staying vigilant online. Here are some tips on how you can identify and avoid crypto scams:

  1. Searching for the whitepaper of the crypto

Every cryptocurrency has a whitepaper or initial coin offering (ICO), which serves as the foundational document for the project. This includes relevant information such as the background, goals, strategies and timeline that will give people an idea of its projection. With this document, you can verify if the crypto you plan to invest in is real and reliable.

  1. Researching about the creator

Doing deep and detailed research about something can clear any doubts. This means that you should also do some investigating on the creator and their credibility. With this in hand, you can see the educational background, assets and other related information about the creator. This is also one way to see if there are people that are vouching for their integrity.

  1. When there are big claims, search for data that backs it

When you see an emerging altcoin that has a lot of huge claims, it is best to search for data that supports it. This will show if what they are saying is true, otherwise, it will just be an elaborate scam. Aside from that, searching for data allows you to check different sources so you can ensure that the information is consistent.

  1. Never trust anyone online so easily

Since all tradings and communication are online, you always need to remember that the people you are talking to are strangers. Having a ‘stranger danger’ mentality can keep you away from scams because you’re cautious about the potential danger they might bring. Additionally, trusting anyone online easily will make you a gullible target by scammers.

  1. Never give away your personal information and private keys

The last thing you want to do is to loosely hand out your personal information and private keys online. Remember that these give access to your funds, so exposing them online will only mean trouble for you. Once you’ve given out this information, you’ll most likely lose your funds and have your identity stolen. 

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