Cryptocurrencies are known all over the world, with an increasing number of people investing in them and gaining a lot of profit. Banks and other central authorities do not manage crypto transactions, non-centralized networks control cryptocurrencies. As a result, money transfers with cryptocurrencies are quick and at a lesser cost.
Why are crypto scams taking place?
Crypto scammers have only one thing in their mind: “get rich quickly by hook or crook.” So they employ several methods to get the crypto account details from the victims and dupe them completely. Before the victims realize it, their money is already lost and gone. Innocent crypto users new to crypto trading are the frequent targets of crypto scams.
Crypto scammers want to get personal information, such as crypto scout details, crypto wallet keys, etc., from victims. They get so far as to cheat the victims through dating apps like Tinder. Crypto scams are just like any other fraud in the financial sector.
The various types of crypto scams
Many scams are occurring in the crypto sector despite blockchain technology protecting the crypto data.
- Investment scams:
These are the most common scams committed by fraudsters. Initially, the con artists call or email the crypto traders and convince them about an exciting investment opportunity in crypto. Then, the cheaters promise the victims of extended returns on investment. After the crypto traders pay the initial amount, they see proof of their enormous profits. It makes the victims put more money into the investment. When the crypto traders get suspicious of the scam, they ask for a withdrawal. But the withdrawal seems impossible; the scammers run away with the money.
For example, A gets an email with a link saying that “there is an exciting opportunity of crypto investment with high returns on investment. ” That link asks for personal information. After A makes the beginning payment of the investment, there will be proof of the increased profit due to putting money in the crypto. Again, that will make A invest more money and pay as well. When there is no profit gain, the A gets doubtful and asks for a withdrawal of the amount put into crypto. But by then, the crypto scammer already disappears with the money.
- Utility scams:
In utility scams, the scammers target those who need utilities such as electricity when there is a big heat wave. First, the victimizers approach the victim through a text, saying, “We are representatives from a utility company.” Then, they tell the victims that they have to pay money for electricity, cable, water, etc. They ask you to send money in crypto. The situation’s urgency does not make the victim think before making the payment. Hence, they pay the money to the scammer. Then, in the end, the fraudster runs away with the victim’s money.
For example, C gets a message from the scammer. The scammer claims to be a representative from the electricity department mentioning in the text message that C has a due amount of electricity bill to pay. So the trickster asks C to pay the bill in digital currency. Then C will get tensed about the situation, and as the trickster asks for crypto payment, C does so. Then the trickster runs away with the crypto money, and before C realizes it, the money is gone.
- Fake employment job offers:
In this scam, fraudsters pose as job recruiters. They contact the job seekers with job offers suited for them. But to get the training for the job, the scammers ask the job seekers to pay some amount in digital currency. In addition, the fake job scammer may post about these job opportunities on social media, through text, or direct calls.
For example, D is a job seeker and wants to get a job. Then some random person pretending to be a recruiter contacts D regarding the job opportunity. But then that person asks D to pay some amount in crypto. Hence, D pays the amount to the scammer. Then the scammer runs away after receiving the money from D.
What are the ways to spot cryptocurrency scams?
Many people suffer from losses due to crypto scams. As a result, they fear investing in cryptocurrencies. Below are the warning signs to spot these scams.
- The cryptocurrency investment opportunity that promises free money will most likely be a fraud.
- A cryptocurrency with poor quality or no whitepaper on it is fake.
- The cheaters try to reach more audiences through online advertising, paid influencers, offline promotions, etc. It is a strategy for gathering as many people as possible and getting money quickly.
- In a crypto investment, if the person promises enormous returns of money, then it is a red flag.
- Grammatical errors and spelling mistakes in emails, social media posts, or any other forms of communication are also a warning that it is a red flag.
- Only scammers demand cryptocurrency as payment when they post about fake job offers, investment offers, etc.
- Scammers tell the victims that there is no need for any experience in crypto trading, it will be done automatically. This move itself is a clear indication of the red flag.
Are there any measures that we can take to protect crypto investments from a crypto scam?
Crypto scams occur to crypto traders suddenly, and they lose all of their money put into the cryptocurrency. Therefore, take the following preventive measures to protect your cryptocurrency investments.
- Keep the passwords that you enter for your cryptocurrency account under tight security.
- Please keep an eye on your account and see if any fraudulent activities are happening with your cryptocurrency account. It is crucial to keep a check even if you are not regularly doing crypto trading activities.
- Remember to perform cryptocurrency transactional activities with care, as the keys of the crypto wallet can easily be stolen. Remember that those with the crypto wallet keys possess all the crypto.