Common Scams

The amount of scams that plague the entire crypto-currency environment is one of the key reasons why transacting in cryptos such as Bitcoin and Ethereum can be very scary for newcomers. Although there are easy and clear cryptocurrency scams, some are more complicated and often difficult to stop.

Cryptocurrency scams have progressed over the past few years to a point where not only have the scams become more elaborate, but also ambitious in nature. In order to trick innocent cryptocurrency users into falling for these scams, bad actors have constantly sought to strengthen their techniques.

We will cover some of the most prevalent cryptocurrency scams in this article that you should stop. In order to ensure proper cyber hygiene and keep scammers at bay, we have also listed some useful tips.

Types of common cryptocurrency scams

Investment scams are rampant. The scammers would promise services or goods in this scam that would provide high profits or returns with little or zero danger. In exchange, all they ask is for you to pass or grant them access to your wallets or trading accounts with cryptocurrencies. Sometimes, there are things that are too good to be true. While the scammer will initially convince you of the guaranteed returns with small sums, they would ultimately take off with all your money and vanish without a trace.

Believe it or not, among newcomers without much knowledge of the industry, these types of scams are very popular. Ponzi and pyramid schemes include examples of investment scams. Social media influencers may be engaged in certain instances to help lend legitimacy and endorse fraudulent services and goods. It is also possible to encourage some of these investment scams through some form of competition or marketing campaign, which leads us to the next popular scam to be addressed, the giveaway scam.

The scammer will promise you free cryptocurrency in giveaway scams as part of a presumed giveaway and will order you to check your wallet address by sending some cryptocurrency to a wallet address they have defined.

On social media platforms such as Twitter and Facebook, giveaway scams spread fast. Usually, scammers use fake accounts to mimic celebrities, famous figures, or popular crypto businesses' Twitter and other social media handles. In order to avoid suspicion, scammers can use fake accounts to comment on companies and personalities' official Twitter and Facebook pages in an attempt to reach their followers. At other times, in order to perpetrate the giveaway fraud, scammers can hack into legitimate social media accounts. A high-profile Twitter hack from earlier this year, for instance, managed to compromise Joe Biden, Elon Musk, Kim Kardashian, and several other famous figures and corporations' Twitter accounts. The link to the cryptocurrency wallet used for the giveaway scam was then tweeted by these compromised Twitter handles, with the scammers reportedly receiving Bitcoin worth at least USD110,000 until the tweets were deleted.

Although social networking sites have recently begun to vigorously crackdown on scam posts and fake accounts, scammers have continued to devise new methods to facilitate their giveaway scams.

In employment scams, scammers impersonate recruiters and managers with phony work listings for crypto businesses usually via Telegram, in job scams. In return for instruction or work-related materials, scammers may continue to request cryptocurrencies from enthusiastic job seekers. In certain instances, scammers could ask job seekers to take part in transfers of crypto-assets in arrangements that could possibly facilitate illegal money laundering.

A phishing scam is the next scam you need to avoid. Phishing scams are not new or confined to the universe of cryptography. To break into people's online bank accounts, email accounts, and other password-protected accounts, threat actors use phishing techniques. While phishing attacks can come in different shapes and types, the ultimate aim of any phishing scam is to trick victims into handing over sensitive data and login credentials, and the objective is to get access to your crypto assets as far as the crypto space is concerned.

In phishing attacks, a common modus operandi is to trick victims into visiting a website that they may believe to be a legitimate service. The service may be a crypto exchange, a wallet, or any other victim-used crypto-related service that requires a password or other credentials for entry. Typically, victims are fooled by the use of a domain address on the website that is quite close to the official address of the actual website or portal they are attempting to reach.

For a token project, an initial coin offering (ICO) is a fundraising initiative. For fraudulent purposes, ICOs can be used, and there have been a few high profile instances involving ICO exit scams.

Scammers attempt to persuade individuals to buy into a new token project in ICO exit scams by buying the new token in an initial coin offering. If enough individuals have purchased the tokens, with the funds raised from customers, the scammers will vanish.

If, due to over-promotion and high demand, the token price appreciates, the scammer will dump their stock of tokens to cash out an extra profit. This can result in a resulting drop in price and leave tokens with no real value to the other buyers. This scam is often referred to as a pump-and-dump scheme (Ponzi).

It can be hard to tell genuine ICOs from scams at times. Unless you have thoroughly studied the project and its team and you understand the associated risks, we advise you not to engage in any ICO (or buy lesser-known tokens after an ICO).

Telegram scam. The breeding ground for cryptocurrency scammers seeking to spread almost all kinds of scams has become Telegram. On Telegram, all the scams we've mentioned so far in this article will take place. From work scams to giveaway scams, Telegram enables scammers to communicate directly and discreetly with their victims.

The tech support scam is one of the most popular telegram scams aimed at crypto exchange users. Scammers will impersonate major crypto exchanges such as Liquid and promise to help users'fix 'account problems or' update 'their account protection if users reveal their account login credentials or move cryptocurrency to a' payment 'wallet address.

Tips to avoid cryptocurrency scams

• Avoid sending cryptocurrencies to external addresses that are unknown.

• Avoid sending crypto currency for a planned giveaway under the false pretext of address verification.

• Do not fall for fake screenshots on social media advertising fraudulent cryptocurrency deals and giveaways.

• Be wary of websites that offer high returns or unrealistic earnings. By reviewing the consumer protection websites and investor alert lists maintained by regulators, do some research on the service or product provider on your own.

• Often confirm the partnership by independent sources if a website or initiative appears to be associated with or supported by a trusted party

• As this may be a sign of illegal activity, look out for spelling or grammatical errors in communications or website domain addresses.

• NEVER share login and security credentials for your account with others, including staffs

• Don't fall for bogus telegram giveaways and job offers. For work postings and campaign updates, search official channels.

• Often report to official websites suspicious or fraudulent account activity.

• Before buying new ICO tokens or lesser-known cryptocurrencies, always do your own Study.

• To safeguard your account, use two-factor authentication (2FA).