5 Common Cryptocurrency Scams & How to Prevent Them

Once you begin dealing with cryptocurrency, you are attracted to its risky transactions. You can find scams everywhere online, even on cryptocurrency exchanges. If you think about investing in startup companies or exchange platforms, ensure that you are aware of the risks associated with your cryptocurrency investments.

We’ll go over a few classic cryptocurrency scams and what to do if you believe you’ve been duped.

What is Cryptocurrency Scam?

Scams using cryptocurrency are a type of financial fraud in which criminals prey on consumers hoping to invest in the new world of digital currencies.

5 Common Cryptocurrency Scams

The following are examples of bitcoin fraud and scams:

  1. Scams involving investments or business opportunities

Investment or Business Opportunity Scams involve getting you to visit a website that exploits your information. The offer usually involves investing in cryptocurrencies. After you visit the website, you’re encouraged to invest and start making money right away. It is even possible for a website to display a fake endorsement or testimonial.

You will never see your money again after completing your transaction because the offer was never true.

  1. Cryptocurrency imposter or impersonation scams

In imposter scams, criminals pretend to be a trusted source to manipulate cryptocurrency users into sending money. Usually, they contact you via email and request payment via cryptocurrency. They may pretend to be government officials, credit card providers, banks, or service providers.

You should be cautious whenever you receive payment requests via email. Check the website’s security before completing the transaction to avoid getting cheated.

  1. Cryptocurrency extortion or blackmail

Extortion, sometimes known as blackmail, is a type of scam in which someone claims to have sensitive information about you, such as images, videos, or other documents, and demands cash or threatens to release it.

Because it is impossible to reverse a cryptocurrency transaction, scammers utilize it to make payment requests. In this scenario, the best line of action would be to delete and contract authorities.

  1. Phishing Cryptocurrency Scams

Email and money-related inquiries, as well as old-school cyberattacks, are all part of phishing scams. These mails are frequently phishing schemes that appear to come from legitimate sources but are actually a hoax. A phishing cryptocurrency scam involves making a fraudulent demand for bitcoin payment. It’s also feasible that they’re cyber thieves posing as cryptocurrency organizations and divulging information about their initial coin offers (ICOs).

  1. Employment Cryptocurrency Scams

Workplace Scams involving cryptocurrency are similar to investment or business opportunity scams, in that they usually start with a job offer that leads visitors to a bogus website.

Users are frequently asked to pay for training in order to fully onboard with a company. They are then advised to pay the training money, which is never reimbursed.

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How to Prevent Cryptocurrency Scams?

Scammers are becoming more sophisticated as more scams are exposed every day. Follow these guidelines to assist yourself:

  1. Protect Yourself:
  • Install an antivirus scanner and keep both your operating system and antivirus software up to date.
  • Any link or file you receive from a stranger should not be opened.
  • Make a list of your private keys and keep them somewhere secure: Don’t give them to anyone or leave them anywhere they could be found. Make the most of your exchange’s security measures (such as an authenticator or phone verification) and generate difficult passwords.

There’s no certainty that these precautions will totally prevent hacks and scams, but they’ll make it much more difficult for them.

  1. Don’t panic, and don’t pay: Scammers want your money, and once you give it to them, it’s gone. Don’t be alarmed if they threaten you and claim to have your personal information, such as images or videos. Just pay straight away. It is considered a ruse.
  1. Scam Detection: A scam can be easily identified by visiting their website. Scammers frequently make spelling blunders because English is not their native language. Genuine websites do not display reviews or certificates to establish their authenticity. Search for the website’s name to see the top results. A Website with a privacy statement or other professional-looking material could have copied it from another website.
  1. Don’t Be Greedy: A good company will not guarantee you a profit or give you free money. Scammers are those that offer to double your money or guarantee a daily percentage.

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How to Report Scammers?

Fraud involving cryptocurrency should be reported as soon as possible. Contact Action Fraud to report attempted cryptocurrency fraud in the United States.

  1. You can report fraud to the Federal Trade Commission at ReportFraud.ftc.gov
  1. File a complaint with the Commodity Futures Trading Commission (CFTC) at CFTC.gov/complaint
  1. Report with the U.S. Securities and Exchange Commission (SEC) at sec.gov/tcr

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