4 Cryptocurrency Scamming Tactics to Watch out for!

The more you get deep into the digital world, the more you will be shocked by the number of scams on the internet. The latest to join the list of trending scams are cryptocurrency scams. If volatility was what had kept people away from cryptocurrencies for long, the new turn off is the pitfalls of scammers.

The growing value of Bitcoin and other cryptocurrencies have not only garnered the attention of investors to the crypto industry but also criminals and hackers. Cryptocurrencies are liquid and portable making frauds easier. More importantly, once the transaction of the cryptocurrency is made to the hacker’s account, it is impossible to revert the action unlike with traditional heists.

If you are thinking of investing money in a new crypto venture, you should be aware of these scams popular in the crypto industry:

1. Phishing

Phishing is one of the most popular digital scams that it requires no introduction. It is the fraudulent attempt of extracting sensitive information such as credit/debit card details, username, password etc from a person by impersonating someone else over digital media — telephone, email, text messages, fake websites, fake applications, etc. There are no strict procedures followed here. It varies from one case to another.

How to avoid Phishing scams?

• Always verify the URL of the websites you are visiting. If the URL doesn’t fit the ones listed by the venture, refrain from going ahead with the transactions.
• If you receive a suspicious email or message, match it with the addresses you made in your earlier communications. In case the messages are from a new address, don’t respond.
• Always remember that nobody is supposed to have access to your private keys or seed phrase.

2. Social media giveaway scams

If someone asked you to send money to their account under the offer that they will transfer 10 times that amount to your account in 2 weeks, will you believe them? The same should be the case with cryptocurrencies. Every other day you will come across a giveaway or another on popular social media platforms asking you to send cryptocurrencies to their account promising to send you back n times that amount. It is highly unlikely a cryptocurrency will double or triple its value in a few weeks. So, it’s better to stay away from these too good to be true giveaway offers. No real cryptocurrency venture will give you 100% guaranteed returns as volatility is intrinsic to the industry. If someone does, that is a sign to back off.

How to avoid social media giveaway scams:

• Make sure the giveaways you are participating in are hosted by legitimate social media handles.

3. Imposter websites and mobile apps

You will be surprised to find the myriad of fake websites and mobile apps on the internet. No matter how watchful you have been, if you accidentally use a website, you fall prey to irrevocable frauds. These websites and mobile apps either resemble popular ones or are set up with a fake new identity. Despite the option to remove fake apps on Google Play and the Apple App Store on reporting, there are still many who have installed these apps, posing a real threat.

How to avoid fake websites and mobile apps scam:

• The first red signal is the lack of “HTTPS” in the site address. If you don’t find the green lock near the URL bar, never visit the site. That is not to say that websites with a green lock are all real.
• Always cross-check the URL every time you visit a site, especially before you make payment. The site may look identical to the site you intend to visit at first glance but may have slight variations when compared to the original one. Like a 0 (zero) instead of the alphabet ‘O’ or ‘.com’ instead ‘.io’.

4. Pyramid and Ponzi schemes

In both Pyramid and Ponzi scams, participants are asked to bring new members to the scheme under the promise of huge yields. Let’s take a look at how they differ from each other:

Ponzi schemes: Here, scammers create a pool of money from investors. As new investors join the pool, their money is used to pay old investors. Only when the money inflow stops, light is cast on the scam.

Pyramid schemes: In Pyramid schemes, a pyramid structure is followed for investment. At the top of the structure is the organizer and under him works the recruiters. People who are recruited will recruit more people and the structure grows bigger with the promise of exponential returns. But since no asset including cryptocurrencies can guarantee exponential growth in the short term, the system breaks down sooner or later.

How to avoid Ponzi and Pyramid schemes:

Ponzi and Pyramid schemes rarely reveal themselves to be one. The organizers will never admit that their scheme is in fact a scam. If you come across any cryptocurrency scheme promising unreal profits, never sign up from them.

Conclusion

As the popularity of cryptocurrency rises, so does the number of scams in the industry. Watch out for the above pitfalls before you plow your money into new crypto ventures. It is also recommended to always confirm that the cryptocurrency company and ventures are blockchain-powered so that you can have a detailed look at the transaction data.

Make sure that you are logging into the official website/application of the venture. Scan through their whitepaper to understand if they have a solid business plan. It also allows you to get to know the team behind the venture and whether they are real or not. The liquidity of the cryptocurrency has to be mentioned clearly along with the ICO rules. In case you find any discrepancies, it is best to back out.

As a world leader in digital assets trading and management, Bithumb Global’s paramount endeavor is to make crypto trading available to all, through a genuine, safe and secure ecosystem. Digital assets are the future and at Bithumb Global, we believe that people all around the world, regardless of geographies, should participate in it to leverage from their almost limitless potential. The most important aspect before getting into crypto trading is genuine information and it is Bithumb Global’s objective to provide as much information to its users as possible so that they can trade with confidence.

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