A rush in the development of different cryptocurrencies has opened up ample opportunities for ordinary users to invest their savings or even make money on exchange rate differences or mining. However, it is worth noting that the independence of regulators is just one side of the coin. On the contrary, the government will be very unhappy if you fall for the bait of network scammers, of whom there are plenty, as well.
I decided to take the opportunity to tell readers about known scammer schemes (for which it is worth waiting from phishers, as well) so that you can avoid their “charms” and save your hard-earned money.
In this article, we will also share effective life hacks on what to do to avoid this kind of “divorce,” talk about how to store, where to store, how to load a wallet, how to sign it up, and give the necessary advice for handling your finances with crypto-wallets.
Understanding Crypto Scams
Crypto scams have become as common as crypto currencies. Because no formal regulations have been implemented on these digital assets, CashApp scammers have found a way to manipulate the small print.
One of the most popular scams I’ve seen is the Ponzi scheme. It offers high returns with little risk available, forcing individuals into a cycle of reinvestment. Over time, when new investors stop joining, the entire operation collapses. These scams often target individuals of a lower socio economic class, who don’t know much about crypto but have been told about it’s high-yield possibilities.
Phishing attacks, scams where people attempt to trick you into giving them your password, have become more common as well. Fake exchanges or wallets will have pop-up messages telling you to enter your seed phrase information. Many of the people who have lost “all” of their crypto have fallen victim to me fish scams, where most, if not all, of your digital assets (that are stored on the wallet or marketplace with which you’ve connected) are stolen and likely to never be returned.
Just as frequent as Ponzi schemes, the
great Initial Coin Offering (ICO) scam has run ramped throughout the internet. You have a new project posted about being the “next” solution to so and so. There is a ton of buzz, and building speculation that this will be the next big tech project. You don’t want to feel left out, so you throw about a couple of hundred dollars to get involved. Come to find out this was all a scam. No product was ever in development (with much of the backing evidence deleted weeks before the finalization). No tokens were even exchanged. The project was one big scam conducted by a single person or a team of people who need to pay some of this loan debt back because they aren’t greedy or something.
Recognizing Warning Signs of Crypto Scams
Unrealistic, guaranteed returns are commonly associated with scams or other types of financial fraud. Many people are enticed by the idea of getting rich quickly and allowing scammers to play into those fantasies. Often, these promises seem to be sent from above, which paints them in a positive light instead of a negative one. If an opportunity sounds too good to be true, it probably is.
In addition to promises of unrealistic returns, scammers also create a sense of urgency. They tell you that their offer is only valid for a short period of time. “You’ve got to get in now for this great price; it goes up tomorrow.” Allowed to take the time to consider and research an “opportunity,” we can make logic-based decisions about it.
Genuine projects will be more than happy to talk you through how they’re going to innovate, to share all of their team’s credentials, etc. It might be time to put a project through the ringer, put 100% of your resources toward investigating it. All reasoning skills point toward not allocating so many enforcements to just one case or case type, but that’s why a new perspective is needed: yours.
Essential Crypto Safety Tips
Prior to dumping money into any project, or person, for that matter, you must do your own research. This includes reading about the project’s whitepaper to understand its use case, learning about the team behind the project, and making sure you can find detailed information about the project. If the team has any past performances or if there are any credibility issues, take a pause. Read through the comments on that token’s page and see what other users are saying about the project.
Just like finding the right projects to invest in, you have to find the right places to buy these investments. By that, I mean using respected exchanges to do your trading. Doing your own research does not solely apply to cryptocurrency projects. Research the exchanges you plan on using to buy, sell, and trade cryptocurrency. Please don’t be lazy. Do your own research. They are not all created equal. Do not let this be the first tale of how you got scammed. Protect your investments.
Simply put, two-factor authentication (2FA) is a method where you have to know two pieces to get access to your account. If you don’t have the second piece, you don’t get access. The second piece is typically sent to a mobile device, like a phone or tablet, in the form of a password via text message, email, or an authentication app. No two pieces = no access to your account.
Full stop.
Just like any industry, crypto has its fair amount of scams, untrustworthy people, and overall trashbags of human beings trying to wiggle their way into your pocket. Keep your investments protected.
Crypto Scam Prevention Strategies
Understanding the risk and getting a solid knowledge of what the scams are out there are so important. There are so many opportunities in cryptocurrency but an equal number of traps and deceptive projects to lose your money on. Trying to learn about the various types of scams will do you well in the long term: Ponzi schemes, phishing attacks, scam coins, and fake ICOs.
Just like everyone should know the basics, it’s important for all trustworthy investors to keep up-to-date on the most recent scams. The only way you can navigate through these treacherous waters is by being well informed. By process of elimination, you could be sitting in a more attractive stack. Use this as a form of security, but you may as well take it one step further.
Use the security feature yourself: you have a list of scam projects, so do other people. A large percentage of people—especially those working in fintech and people younger than 35—invest in some way, shape, or form. Just as if an old lady was getting her purse snatched, if you see something, say something.
What to Do If You Encounter a Crypto Scam
Take the time to report the scam to the proper authorities and platforms. If your situation involves local law enforcement, give them a call to help do your part in the united fight against online fraud. Also, make sure to report the scam to any platform involved (i.e., Skype, Facebook, Instagram, email provider, dating website, etc.). This will open an investigation on their part into the scammer’s/s’ activities and ban them from the platform accordingly.
No doubt, if you are here, you might have been seriously “duped”—deceived out of possibly tens of thousands of your hard-earned dollars, and I’m so sorry for your loss. You will need professional advice on whether not this offense will be worth pursuing in a court of law. These fees are not just essential to get you physically back to where you were financially before the scam took place, but they also provide recourse (by creating an NSL: Notice of Security upon the Litigant [scammer]) for those who had to borrow the money from the bank and couldn’t afford to pay it all back.
Most of the time, the solution to this trend is as simple as reflection. Reflect on this time/experience and think about how you actually got duped. Taking the time to reflect on the experience and intensively analyze a scammer’s tactics will arm you with stronger real-time processing logic that is always on the lookout every time you message someone.
In the fast-changing world of cryptocurrency, you can never be too well informed. In addition to sharing the latest scams, learning a bit about how they work will also help you. It’s very important to know who and what to trust implicitly, as tricks can come in many forms, such as emails or phony investment platforms, which are all basically too evolved for anyone to compete with unless they’re very sharp .
Also, because it would be very helpful if readers would alert us to any scams they fall across in the comment section, many may have different — hopefully not too expensive — but all potentially very helpful experiences to share of how they did or did not lose out to the different types of scams evolving all the time in the vast cryptocurrency scam ecosystem.
And if you have any tips on security, please share them. Talking about the active security strategies we can each employ is an excellent idea, and some of the basics, such as “always use two-step password verification” and “trust no one on the net” may come in very handy for others to read in the comments.
