Scam on the Crypto Space

Cryptocurrency are now gaining lots of attentions this past few months. And with the meteoric rise of the price of bitcoin and other cryptocurrency, lots of people are now eyeing to this endeavor.

But like on the real world, there are plenty of scams on the digital space. People chasing fortunes through cryptocurrency might fall victims on opportunistic con artist and hackers.

So if you want to try your luck on cryptocurrency, please beware of this scams:

Ponzi schemes

Ponzi schemes are older than crypto, dating back to the 1920s. It was named after Charles Ponzi, an Italian who cheated investors with the Ponzi scheme.

Ponzi schemes are really easy to understand. An operator will compensate existing investors with funds raised from new investors. In other words, robbing person B in order to pay person A. This form of fraud does not generate actual revenue, but it gives the illusion of revenue, which may persuade many of those who have invested that it is legitimate. This will continue as long as there are fresh investors willing to put money in. Frequently, these schemes will require users to refer others. It's for this reason that it's sometimes called a pyramid scheme.

Although the basic concept of a Ponzi scheme is simple, some of them can be difficult to spot. Even the most sophisticated investors can be duped by some of these schemes, which can endure for years.

Ponzi schemes are everywhere in the digital space because it is easier to set up an exit scam in the crypto world than it is in the fiat world. They also adopt a variety of disguises or fictitious business operations in order to justify their profits. They frequently use approaches that appear to be credible in order to avoid raising too many doubts.

Giveaway Scams

The giveaway trick is fairly straightforward. Scammers get you to donate money so that they can multiply it and return it back to you. Send 1BCH, and I'll return 10 times what you sent.

Despite how ridiculous that may sound, these con games are really effective. They usually portray the promotion as a prize given away by a project influencer or a celebrity of some sort. They promote these scams through major social media channels such as Twitter. The majority of the time, this is accomplished through mimicry. They do, however, occasionally succeed in gaining access to accounts.

Due to Twitter's crackdown on giveaway scams, they have become less common. Scammers, on the other hand, have discovered fertile ground on YouTube.

Phishing scam

The phishing scam can be carried out in a variety of ways. A phishing scam's purpose is to convince you to hand over vital information so that a hacker can exploit it to gain access to your cryptocurrency.

Phishing scams aren't limited to cryptocurrency; they've been used to gain access to people's online bank accounts, email accounts, and other password-protected services.

A typical phishing scam involves convincing you to visit a website that appears to be a real service. It could be a cryptocurrency exchange, an online wallet, or another service that requires a password to use. Scammers frequently attempt to use a domain address that appears to be very similar to the official URL of the site you're looking for. They either rearrange a letter, include a hash, change the spelling, or utilize various domain extensions. The very cunning will go so far as to replace a letter with a number.

Homograph attacks are used by the very sophisticated hacker. Unicode letters from non-latin writing systems are primarily used. They have the ability to make a domain look exactly like the one intended. These domains frequently host websites that appear quite similar to the one you're planning to visit.

Phishing assaults can be far more successful when the attackers also purchase ad space. They've run adwords with the bogus site on numerous occasions, and Google has served that up in the search results.

ICO exit scams

Rug pulls and exit scams aren't just for Ponzi schemes; they've also been employed to great effect in phony initial coin offers. It's not difficult to figure out how these frauds work. They attempt to persuade a user to invest in a cryptocurrency through an initial coin offering. They hope that once they've completed this, it will generate momentum and attract additional users. And once they've gathered enough users, they'll cut and run, leaving the rest of us to pick up the pieces.

ICO versions of these were all over the place during the 2017 ICO frenzy. A handful of high-profile initial coin offerings (ICOs) have pulled out daring exit frauds. However, as interest in initial coin offerings (ICOs) has dwindled, scammers have moved on to a new target. Due to the growing interest in the DeFI domain, scammers have shifted their techniques to these waters.

Scam comments

Scammers may pay you personal attention on occasion. They'll spend more time with you, attempting to gain your trust and, hopefully, your pocketbook. The primary premise of this con is that there is someone who can assist you with trading, mining, or earning cryptocurrencies in some way.

They'll try a variety of tactics to entice consumers to communicate with them. This will be accomplished via email or chat apps.

It's difficult to resist these con artists because all they're doing is using an email or phone number to persuade you to hand over your personal information.

Final words

Scams are all around us, and one thing they all have in common is that they appeal to your greed or fear. They expect you to make snap decisions without giving it much thought.

"Does it sound too good to be true?" is a question you should always ask yourself...

and always invest only what you can afford to lose.