Crypto Scams: How To Avoid Money Loss In Crypto
When talking about crypto, it’s essential to know that the garden isn’t made just of flowers. As the crypto market keeps growing at a large scale, and crypto launchpads (such as BullPerks) incubate new great projects in the market, there has also been a rise in crypto-related scams. Thus, it is crucial for both young and senior investors to keep their funds safe from fraudulent crypto tokens and exchanges.
This year alone, there have been over $12 billion losses in major crypto thefts, hacks, and scams, according to CNBC. Fraud and theft made up the most part of the sum with $10.5 billion, an increase of more than 7X from last year. Earlier this year, we witnesses the biggest crypto theft of all time (at least, at that time) when the DeFi platform Poly Network lost more than $600 million.
Financial investments can be quite challenging, and even a gamble at times– and you don’t want your cybersecurity to be one of them. On that note, here is an overview on how to recognize some of the most common cryptocurrency scams of 2021, and tips on how to make safe purchases when using crypto.
The most common crypto scams
The list of crypto scams, unfortunately, is big. From scamming emails to employment crypto scams, there are numerous ways bad actors perform in an attempt to steal the identity and money from their targets. Here is a rundown of some of the most common ones investors went through in 2021.
A scam email can look exactly like a legit crypto company, making it harder for the reader to recognize; thus, before you invest your crypto assets, make sure to check for their validity. One of the things that make a company legit is, obviously, when real people work for it. In case you have doubts about the email, you can directly contact someone who is working there.
A scam email may also try to entice the reader to click on a link that brings them to a different site. Never click on a link on an email that brings you to a website you don’t really know. ICOs, or Initial Coin Offerings, is another way scammers use to entice their targets through an email.
Take your time to carefully read over the entire email, and avoid falling for this type of scam and unrealistic offers.
In a blackmail email, Scammers may claim they own embarrassing or compromising images, tapes, or personal information about you. Then, they threaten or blackmail you to release it publicly if refuse to pay a certain sum in form of cryptocurrencies.
Don’t comply with the scammer. This is blackmail and a criminal extortion attempt. Report it to the Federal Trade Commission (FTC) of your country.
Employment crypto scams
Similar to other crypto investment opportunity scams, an employment crypto scam often is a presentation of an unreal job opportunity, with the targets directed to a fraudulent site through a link.
Also, the targets are asked to pay a sum of money for “training purposes and agency fees”. They are asked to pay the amount in form of crypto assets, making it impossible to get it back.
Fraud tweets and other social media posts
When following a social media account, including celebrities and high-authority figures, often it’s hard to know whether the account is legit or fake.
The same happens in the world of crypto, where impersonating, malignant bots can be found anywhere, in form of any public figure. Don’t accept offers from Twitter or other social media platforms, even if the results seem to be big. Also, the comments on the posts of these figures are bots, as well, with an attempt to deceive their target by trying to make it look like a real one.
Fake Mobile Apps
Fake apps or dapps disguised as a real brand, available for download on iOS or Android devices, are another form of crypto scam.
Although a user can usually find out about it soon after and remove the app, the damage often doesn’t end here. According to Sophos, a cybersecurity firm, there are millions of people who fell for 167 fake apps. While Android users are at a higher risk, iOS devices are not exempt, either.
DeFi Rug Pulls
DeFi rug pulls are the latest kind of scam to hit the crypto market. Decentralized finance, or DeFi, aims to decentralize finance by removing the guards of financial transactions. Recently, DeFi has become an essential factor for innovation in the crypto ecosystem.
However, DeFi has its own cracks– the development of DeFi protocols has given a chance to numerous scammers that walk away with investors’ funds, a practice known as a Rug Pull. The practice is responsible for over $10 billion lost through crypto in 2021.
Scam of authentication or renewal of wallet
A scam that involves the “authentication or renewal of a wallet” has been one of the most common schemes bad actors have used to steal crypto assets in 2021. This usually happens when a bad actor provides their target with a barcode with a promise to fix an issue their target may go through, or simply make a payment on a legit-looking website, while in fact, the scanning of the barcode allows the scammer full access to the wallet.
Best practices to avoid cryptocurrency scams
How can you recognize and avoid a crypto scam? Here are a few things to watch out for before deciding to
make your first investment in a crypto asset, such as Bitcoin, Ethereum, BullPerks, or others.
- Do Your Own Research (DYOR) — Before you make any type of investment, especially in a project or company that promises “investment opportunities with overnight profits”, make sure to do your own research first.
- Never reveal your private key or seed phrase to your cryptocurrency wallet to anyone. For higher security purposes, it is recommended to store that information somewhere offline.
- Enable two-factor authentication in any crypto wallet or exchange you use. That may not be the unbreakable locker to your funds, like in the case of the Coinbase hack, but it surely is a great security step.
- Doublecheck website URLs. A phishing scam actor may simply swap a letter or number (such as an “I’ to a “1”, or “O” for the number “0”), to make a URL look like a real one.
- Reject any offer that asks for an advanced payment, especially if that has to be paid in form of cryptocurrencies.
As the crypto world continues to gain traction and grow, it will also be the attention of bad actors. By getting to know the common ways with which scammers try to steal your information (and ultimately your money), you will hopefully get to recognize a crypto scam early on and protect yourself and your assets.
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