The crypto world has evolved greatly in the last few years as people become more interested in finding something new to fiat money. But because cryptocurrencies increased in popularity, so did the risks people are exposed to. This is because plenty of scams have appeared, so now people have a hard time knowing if an offer is genuine. Scams have been present for an eternity, but it looks like the creation of cryptocurrencies has given hackers the perfect occasion to try to steal money from innocent people. So, if you are interested in investing in cryptocurrencies, you need to be mindful of the market’s scams.
To help you navigate the crypto space safely, we have prepared a guide with the most common crypto scams and what are the best ways to avoid falling victim to these frauds.
Different types of crypto scams
The scams you can find in 2023 regarding cryptos are quite overwhelming, so a single article won’t be able to cover all of them. But here are the most common ones you need to avoid.
Rug pull scams
Rug pull scams imply sneaky tactics that make people believe they have met a real investment opportunity. Unfortunately, this is not the case. In this type of scam, the people behind will try to raise capital to fund a crypto project or a non-fungible token (NFT) that doesn’t exist. After they get the funds, they will vanish like thin air with the money they gathered from people. The people who invested in these scams will likely never recover their money and will be unable to do anything with their new digital assets. This is because these investments’ coding makes it impossible to sell the cryptos after purchase, so the virtual coins will just be valueless.
The downsides don’t stop here, as if you entrust a not-so-real company with your personal and private information, you can be a victim of a data breach. According to https://www.how-to-sue.co.uk, data breach victims can suffer financial losses, identity theft, anxiety and depression. So, always be careful with the information you trust online and to whom you give your personal information.
This type of scam is one of the most common, as it is quite easy to apply. In these frauds, scammers only need to send texts on social media or emails to lure people into clicking on a malicious link. Then, the link will lead them to a suspicious site that aims to steal their digital currencies. Scammers will try to steal the crypto owners’ private keys to access a person’s funds.
Phishing scammers have developed more tactics over the years and will try to seem like they are an important bank or a prestigious company. Although you might say that you will recognize this type of scam when you meet one, you need to know that this is not a joke but a serious problem that can leave you without an essential part of your funds. Even big names and companies have fallen prey to this fraud, so be careful with what you meet online.
Social media scams
These scams are also popular in the crypto world. They can take the form of an ad requesting crypto payment or a fake social media post. Because other users might leave reviews and respond to such a post, people often think these announcements are a real opportunity. However, behind these posts hides bots most of the time. If there are no bots, then there are hackers who want to steal crypto.
You should always keep these frauds in mind and double-check every offer before investing in a digital coin.
Because cryptocurrencies are used as a digital payment method, many fake apps have been created over the years that try to steal money from users. Cybercriminals are quite good at replicating these apps. For example, in 2021 alone, over 300,000 downloads of fake apps led to stolen data and banking credentials from people. When people download these apps, they quite literally send payments directly to scammers. Therefore, checking the apps before downloading them is paramount to ensure they are legit.
How can you avoid falling victim to crypto scams?
If you recognize a crypto scam, you will be able to avoid falling prey. With that in mind, here are some good practices to help you invest confidently and stay safe online.
- Do your research before you invest. There are many cryptocurrencies in the market now, and the number is increasing every day. So, before investing, you should look at the history, how they have evolved in the market and if there are scams associated with the digital coins.
- Don’t consider urgent requests. People might come across urgent payment requests when navigating crypto, but they are generally a red flag that points directly to a scam. So, if these types of scams hit your inbox, you need to delete them immediately or mark them as spam. If someone needed money urgently, they wouldn’t have reached you this way, so be aware of these frauds before it is too late.
- Don’t pay attention to get-rich-quick scams. While believing you can become rich overnight is tempting, this is unlikely to happen. The crypto sector is an investment that comes with many opportunities. But you will not become a billionaire overnight. So, don’t pay attention to these scams. Instead, research and learn how to earn passive income with the help of cryptocurrencies.
- Report a suspicious activity. When you see that something doesn’t look right and seems like a fraud, it will be better to report it. The same applies if you fall prey to a scam. This will keep the crypto space safer for other people.
Cryptocurrency scams cost people, and besides the financial losses, victims also struggle with mental problems like depression. Unfortunately, crypto frauds are everywhere, and any individual, regardless of geographical location, age or background, can become a victim of these crimes. This is why it is very important to check everything you see multiple times before you invest. In these ways, the above scenarios will not become a reality, and you can secure your crypto funds. So, keep that in mind. Also, stay away from offers that look too good to be true.
Press releases or guest posts published by Crypto Economy have sent by companies or their representatives. Crypto Economy is not part of any of these agencies, projects or platforms. At Crypto Economy we do not give investment advice and encourage our readers to do their own research.