The acceleration of digitalization and the popularity of Cryptocurrency nowadays have made the platform of digital currencies more vulnerable to cryptocurrency scammers. Unlike other currencies, cryptocurrency transactions are maintained and managed by decentralized authorities, giving scammers an opportunity to be more prevalent in these fields. Moreover, the lack of regulation in the area of cryptocurrencies favors scammers in a different way.
To avoid cryptocurrency scams, investors should be knowledgeable about the strategies the scammers utilize these days. Some of the maneuvers executed by the scammers are discussed in this article.
Here are some strategies typically employed by scammers,
- Illegitimate websites
- Phishing scams
- Pump and Dump scams
- Affinity Fraudulence
- Extortion scams
- Impersonating Government agencies
- Initial Coin Offering (ICO) scams
- Online romance scams
- Payments in Cryptocurrency
Fraudulent scammers establish illegitimate websites that look identical to existing websites of genuine cryptocurrency companies. Not only do they mimic the domain name of the companies’ websites, but they also copy their design and fool people into mistaking them for the legitimate ones. Through these websites, they either garner victims’ personal information or steal the money that they have transferred thinking they are investing in cryptocurrencies.
A phishing scam is when scammers perpetrate mischief by sending emails to their targeted victims. Cryptocurrency scammers often send their targets emails, providing malicious links which redirect them to the websites that they have established to practice forgery. Sometimes they deploy spyware into the victims’ devices, which generally gets installed on opening an attachment shared over an email. With this strategy, scammers garner victims’ personal information needed to get access to their cryptographic wallets and then eventually steal their money.
Pump and Dump Scam:
Cryptocurrency and stock market scammers sometimes inflate the price of cryptocurrencies and stocks by spreading false news or by buying crypto coins and stocks in bulk. They do that so that they can sell them when the price hikes. Consequently, investors witness a price crash in the market, compelling them to sell the crypto coins and stocks at a loss.
Scammers who perpetrate affinity fraud always target groups rather than an individual. They prey on groups or organizations that share a particular hobby, interest, or community such as religion, race, etc., and always target the leader out of all of them so that it becomes easy for them to manipulate the other members of the group.
Extortion scam is an unethical practice where scammers garner money or other personal information by threatening their targets or by coercing them. In short, scammers blackmail their targets into doing what they want them to do. In order to perpetrate an extortion scam, scammers first garner victims’ private information through various ways, and then they threaten them that they will expose their data in public if they do not follow their directions. Thus, the scammers threaten investors into giving them information related to their digital wallets and eventually steal their crypto coins.
Impersonating Government Agencies:
Scammers impersonate government agencies as people trust these government agencies easily and do not hesitate while sharing their personal information with them. A cryptocurrency investor should always remember that cryptocurrencies are completely maintained and managed by decentralized authorities, and a centralized authority like the government has no control over it. A government agent will never call you and ask for your personal information in order to safeguard your wallet. So it is advisable to avoid such calls and messages.
Initial Coin Offering (ICO) Scams:
When a company decides to mine a new crypto coin, they propose exciting offers for investing with them. This process of raising money to issue a new coin is known as Initial Coin Offering or, in short, ICO. Scammers see Initial Coin Offering as an opportunity to perpetrate mischief. So it is necessary to learn about ICO before you fall into the trap of these ingenious scammers.
Online Romance Scams
Scammers are prevalent in the field of online dating apps as well. Scammers pretending to be their victims’ admirers garner their personal information related to crypto wallets for their own benefit. Scammers first establish a relationship between them and garner their trust and eventually try to steal their crypto coins. They sometimes show great interest in cryptocurrencies and claim themselves to be an investment expert so that the victims do not hesitate while handing over their personal information. But know that it is most likely a Romance scam when they claim that they can double the victim’s money within a short term or assert to safeguard their wallets.
Payments in Cryptocurrency:
Though the primary purpose of Cryptocurrency is to use it for day-to-day transactions, no one treats it as a regular payment option, as the market price of cryptocurrencies is extremely volatile. Hence, one should be careful of those who ask for Cryptocurrency for day-to-day payments; there is a high chance that they are scammers.
A cryptocurrency investor should always remember that transactions done through cryptocurrencies cannot be tracked or reversed once it is completed. So an investor needs to be extra careful while making transactions in cryptocurrencies. Verifying before trusting anyone can save you from future regrets.