What are Cryptocurrency Scams & How to Protect Yourself from Them?
The digital disruption in millennials has brought a multitude of get-rich verticals, but none like the roller-coaster of cryptocurrency. The hype is so big that when friends and family meet for fun or functions, the indispensable discussion of cryptocurrency never misses the light. Whoever has more of this virtual currency stored in, is lauded more for their business shrewdness. And why not, since the cryptocurrency inception, it has benefited a common man, millions, even though they might understand less of its safety, usefulness and future.
But why is it that this virtual currency is coming in the bad books of being vulnerable to frauds that can probably rip a person off entire savings? A recent incident of Elon Musk impersonators stealing more than $2 million from the investors in cryptocurrency frauds is one such example that highlights the security breaches on a rise. Moreover, if a fraudster can impersonate Elon Musk, one of the smartest men alive of our time, then there is a serious concern encompassing cryptocurrency than what meets the eye.
Adding to this potentially damaging trend on the rise, cryptocurrency has become the victim of the underlying problems of cutting-edge technology. Hackers are using the most sophisticated systems to plunk down your life savings and leave you high and dry.
The situation is graver than you can imagine, with the startling figure of 7000 consumers losing $80million since October 2020.
So, what causes cryptocurrency scams and who are the hackers behind these sophisticated breaches? To deep dive into the question, it is first pertinent to gain some insight into the common cryptocurrency scams-
The common cryptocurrency scams
A threat in the times of the digital world is inevitable. But if you know the threat, have some knowledge on how it and from which direction it can attack you, then you can strategize your measures. This holds true to cryptocurrency scams, where knowing what frauds can make your investment vulnerable to breach, can help you prepare against it.
While cryptocurrency scamsters are smart and sophisticated, you can stay one step ahead of them by expanding the common cryptocurrency scams you are up against.
- Ponzi schemes
A scheme where a victim is tricked into investing in a company that is practically non-existent. Imagine the level of persuasiveness and adeptness in their hacking profession would a person be to make you invest through a get-quick-rich scheme. Cryptocurrency becomes the ideal targeting tool as it is the on-its-innovating stage with no tangible appearance and has a difficult to track profile.
- Pump and dump
A common scam where fake investors persuade you to buy shares in companies that have little cryptocurrency presence, concealing false data and leaving the victim with worthless stocks.
- Fake celebrity endorsements
A classic case of a fake influential scam is where fraudsters hijack a celebrity’s social account or create fake ones to encourage investing in fake cryptocurrency.
- Fake exchanges
The most common and very prevalent fraud is when a scamster masquerading as an investor sends you fake emails or links with messages promising cryptocurrency in return. The catch, though, is that you would be required to pay a small fee, that apparently is not mentioned in the deal, you would never see back.
- Impostor apps
One of the worst cases of the smartphone world is cybercriminals spoofing legitimate cryptocurrency apps. These apps are uploaded on the play store for people to install, only to steal your personal data or plant malware in your device to steal your cryptocurrency wallet login details.
A riding name in the cybercrime market, phishing is one of the most common and highly adopted methods to conduct cryptocurrency frauds. Such fraudsters use every possible means of texts, email, social media to seem like a legitimate source. These sources dupe you into opening their message and steal login card credentials to cryptocurrency wallet.
How you can identify and tackle some of the most common types of cryptocurrency scams?
Cryptocurrency scams manifest in different forms, masquerading as valid sources, exploiting digital means to gain access to your cryptocurrency funds. This hoax does not always breed on people who are looking for get-quick-rich but can be sophisticated businesses with a fleet of security.
While avoiding a cryptocurrency scam entirely might not be possible, there are some elements that can identify real from fake. Staying vigilant is the best bet against such scamsters extorting cryptocurrency.
Let’s have a look at some tried and tested ways of protecting you from cryptocurrency scams:
- When the offer is too good to be true, there might be some catch behind it. It is recommended to get it checked multiple times, look for loopholes and probably skip the deal entirely, instead of giving in your details.
- Before you install a mobile app, always look for customer ratings, reviews, logo authenticity to weed out the real from the fraudster app.
- Engage in the practice of double-checking every time you receive a URL, email or social media message. Technology has surely offered some amazing benefits, but it has also enabled spoofing to cause a sophisticated breach of your personal data and finances. This makes it vital to ensure who you are dealing with, check their authenticity and look for credible information before engaging in any cryptocurrency transaction. You can fraud prevention apps that can notify you of each doubtful activity happening on your phone.
- Be aware that you are a target. Now that you are living in the millennial and are in some way associated with fintech or cryptocurrency, then you are at a target of potential fraud activity. The world is an open book in this age and the digital world has enabled access to every information from anywhere. The least you can do for your safety is to stay vigilant.
- Follow vigilance with being prepared. Create a system that can track such infringements. The system can be as simple as maintaining double-checks or as complex as using technology.
- Keep expanding your knowledge base. The complexity of cryptocurrency fraud will continue to evolve and expand its behaviour. The best fight against it is to educate yourself on what you are standing against.
- Safe browsing is a security blanket where not downloading unknown or suspected apps on your mobile and not visiting questionable, potentially harmful websites is the right way to go.
- The best form of safety is to avoid clicking on suspicious links, which no matter how tempting they sound might steal your personal data.
In a nutshell!
The increasing trail of cryptocurrency scams is a cry for much attention and high vigilance in the investment vertical. It is a matter of being stripped of your hard-earned money, that impacts not just you but your family as well. While this scam has been masquerading amongst the most reliable and trustworthy people, the real truth behind such scamsters remains questionable.
This calls for enhanced vigilance on your part to not fall prey to such fraudsters. While it is easier said than done, garnering significant knowledge on cryptocurrency before investing and asking questions that bring you satisfactory answers is one step to secure investing.
While the cryptocurrency is here to scale in businesses and for individual investors, following the above tips and evolving your knowledge, can keep you in the safety blanket against cryptocurrency scams.