Know the Different Types of Cryptocurrency Frauds

Know the Different Types of Cryptocurrency Frauds – When you enter the crypto-verse, it won’t take long until you discover that the field comes with many risks and that investing in crypto can be dangerous. It’s a given that the cryptocurrency market has a highly volatile nature, which causes its digital coins to undergo rapid changes in value. However, this is not the only risk in the field that can harm your career. Many people hide behind their devices and portray different roles like scammers, hackers, frauds, and more.

If you are new to this field and you’re looking for a crypto trading platform, make sure to confirm the legitimacy of each company or startup you’re thinking of using. You should always work with companies that have transparent policies and are regulated by third-party financial authorities to provide brokerage and investment services.

However, verifying the legitimacy of brokers involves a lot of effort. Even though this information is quite important, you won’t usually see it on the front page, which is reserved for flashier items like special offers and promotions. And sometimes you might be able to find such information but it may be outdated or outright fake. If you’re not an expert, how would you know?

Doing background checks into crypto trading and investment companies is actually so difficult that it has given rise to a new line of businesses. Now, traders can employ the services of mediator companies who verify brokers for them (e.g. Bitcoin-loophole.io). Instead of manually checking the credibility of a crypto trading platform, some traders prefer trusting a company like that to recommend them a legitimate broker. But even so, be sure not to settle directly with the first platform you see. Carefully consider your decisions to avoid falling victim to the malicious types of people in the crypto market and do your own additional research.

To give you an idea, we’ve compiled several common types of cryptocurrency frauds and how they present themselves in the cryptocurrency market. Always be on the lookout for these fishy enterprises such as these, and make sure to do background checks before engaging.

Crypto Scams

As technology has shown constant development in recent years, creating opportunities for people, it seems that humankind is still finding creative and innovative ways to make the lives of millions convenient. Unfortunately, this advanced technology also paved the way for people who earn from doing bad things. In this case, scammers and hackers have found convincing ways to steal money from people through cryptocurrency. The most common script used asks crypto enthusiasts to pay with crypto to enjoy a certain benefit, which is not real.

These scammers would go out of their way to convince you how great their “services” are and once they have your interest, you will be asked to pay through cryptos or wire transfer. The risky part comes in: since the crypto technology is highly unregulated, there’s no way to get back the funds you spend, and there is no insurance for your assets. To save yourself from falling into these dangerous traps, here are some of the digital currency scams to stay away from.

1. Blackmail Emails

One of the most common methods that scammers advertise their so-called ‘services’ is through emails, which often come in a blackmail style. Scammers take time to search for possible grounds online, and when they find private information that you’ve input online, most especially in social media, they will gladly take advantage of it. Scammers who use blackmail emails state that they have acquired personal information that only you know and would use it as leverage to acquire crypto from you.

2. Social Media

People who prefer to earn from doing bad things often target the common social media platforms used by many; there have been cases of scams in social media platforms in the past years. If you encounter a post, tweet, email or private message from someone you don’t know that indicates you need to send them crypto with alluring promises of earning fortunes, there’s a high chance that it’s a scam.

Even if you receive a message from your favourite celebrity or a crypto expert you’ve been following for years, there’s still a chance that it’s just a scam. So to avoid this, make sure not to trust immediately anything that you see in social media unless there’s legitimate research that backs up their claims.

3. Business and Investment Opportunities

One of the things to look out for is business and investment opportunity scams. This type is very common as there are companies that promote their crypto by promising significant returns in a short period of time. Scammers would also use this line and would ask you to pay with cryptos, imposing that the more crypto you pay, the more profits you’ll make.

With the rising opportunities for business and investments, it may be challenging to determine which ones are actually true. Scammers who use this method will act as the “investment manager” of a certain company and will go out of their way to interest you to pay by informing you that their company can help you increase your assets if you invest it in them. Once you’ve invested, the company will make an “investment account” that they’ve created for you and would, later on, know that in order to withdraw your funds, you need to pay fees.

Other types of scammers who utilise this method would send some type of job offers that allow you to help them recruit some investors of digital currencies that mine, sell, or trade crypto, making you believe that you’ll get to earn profits faster this way, but in reality, they would just take your personal information and money.

4. Giveaways

There are many scammers in the social media field who pose as well-known celebrities, well-established businesses, or famous influencers. All these just to achieve their purpose: capture the attention of potential targets easily and be able to promise you to have increased assets if you invest it; this process is called the giveaway scam.

To make it more believable, these scammers would come up with a well-crafted message from a scammer’s “legit” social media account, which creates credible-seeming giveaways. This entices people to engage and not miss this “once-in-a-lifetime” opportunity, which later on would cost them their careers.

5. Social Engineering

This type of scam is considered one of the most dangerous ones since the process involved allows you to think that you are really making a transaction with a reputable company. Social Engineering scams manipulate you psychologically through deception in order to gain important information that is relevant to your crypto account.

Final Thoughts

Throughout the years, the crypto market has shown positive progress, which can be seen in many stories, news and social media posts. As the economic system of digital currency continues to improve, it also paves the way for scammers and fraudsters to shoot their shots. Regardless of the type of scam that you encounter, always make sure to double-check the accounts of the people who propose an offer and check whether they are legitimate. By knowing this, you’ll be saving yourself from easily falling into these traps that scammers and hackers created.