How to Avoid Cryptocurrency Scams.
Cryptocurrency is becoming increasingly popular in the financial world; it has become a more popular investment option than real estate and trails just behind stocks and bonds. The market capitalization of cryptocurrencies altogether is hovering around $2 Trillion.
Some people would like to make profits legitimately from cryptocurrency. Also, some individuals are only interested in plotting nefarious schemes to rip people of their money. To people who trade in the financial markets, scammers are not news. For you who are a beginner in cryptocurrency trading, you must be wary of them.
In this article, we will help you understand some of the cryptocurrency scams that exist and how to avoid them.
5 Common Cryptocurrency Scams
1. Fake Websites: These scammers try to clone cryptocurrency-related platforms to get you to divulge sensitive information onto their websites. Even if it looks identical to the website you want to get to, there are things to look out for.
I. If the website does not carry “HTTPS” in the address bar, this is a significant red flag.
Ii. The authentic website will carry a small lock icon close to the URL in the address bar.
Iii. The scammers try to clone the original website, but some still make mistakes like typographical errors. This is a huge red flag.
How do you avoid this? To avoid this type of scam, type the URL yourself. Don’t search on google; the scammers use URL addresses that are similar to the original one.
2. Fake Investment Platforms: This is a common method of scamming people known as Ponzi schemes. The scammer will create a platform advertising investment opportunities in crypto-trading. One major characteristic of this scam is the bogus Return-On-Investment (ROI) promised.
These platforms may run well for months with different people cashing out. The testimonies from the platform are there to garner trust from prospective victims. When sufficient victims have been scammed of their money, these fake platforms go offline.
Scams like this smear the integrity of legitimate cryptocurrency traders who invest for people. They often employ the services of influencers to make the platform look legit.
How to know it’s a scam.
- Large ROIs (Any investment platform that promises you above 10% ROI monthly is making bogus promises).
Ii. No contact location or address.
How to Avoid this;
- If you want to invest in cryptocurrencies, always belong to online forums about cryptocurrencies. In these forums, you will get correct information about legitimate investment platforms.
Ii. Be on the lookout, never fall for large ROIs.
3. Telegram Scam: Telegram has become another platform that hosts a lot of scammers. Many scammers operate through telegram because the platform allows unknown people to reach you directly. Many types of scams take place through telegram, but a popular form is “tech support scam”.
The scammer tries to impersonate the tech support staff of a popular cryptocurrency platform offering help for technical difficulties. They then ask for payment in cryptocurrency or ask users to reveal confidential information to them.
Note: No credible platform chat their users up on Telegram. Be wary of such individuals impersonating these platforms. Never divulge your wallet address to anybody on Telegram.
You can also restrict your telegram channel from unwanted personalities. Adjust your telegram settings to prevent you from being added to spam groups.
4. Phishing Emails: Just like phishing websites, scammers also use phishing emails. They do this to announce fake news, fake ICOs (Initial Coin Offerings). The whole aim is to steal funds from unsuspecting individuals. On these emails, they put a call to action (CTAs) to get the prospective victims to input personal/confidential information.
These emails could be malware sent to your system to retrieve your personal information. If the email looks like from a legitimate source, try to verify its credibility before you take any action. Contact anyone you know at the supposed source of the email, check out their website to be sure it’s legit.
5. Fake Coins: With the rise of altcoins, there are several cryptocurrencies created to scam unsuspecting individuals. These coins are known as shitcoins, they show prospects with a high increase in value and end up crashing when the scammers withdraw the funds into their bank accounts.
There are a lot of shitcoins that are created to rip people of their money. If you are a cryptocurrency trader, be wary of coins that rise over 1000% in value in days.
Tips to Avoid Cryptocurrency Scams
- Never reveal confidential information to strangers no matter who they claim to be. Credible individuals will never ask you for your wallet addresses, passwords, or 2-Factor Authentication.
Ii. If it sounds too good to be true, avoid it. It is most likely a scam.
Iii. Government agents will never ask you to pay in bitcoin or any cryptocurrency. Never fall for it.
If you are going to be a cryptocurrency trader, be alert. Don’t fall for cheap scams. If you have lost money through crypto currency scam or any scam whatsoever, contact us to file a case. Visit CyberSploits