As long as any financial matters are involved, scams always make their presence felt, and it is not surprising that cryptocurrency is not spared too.
Cryptocurrency is a digital currency that can be stored in a digital wallet. These cryptos can be transferred and stored, and encashed for fiat money. Although many do not know different cryptocurrencies, they know it’s a digital currency and call every crypto a Bitcoin. Cryptos are unique as they record each transaction as a block, thus the blockchain technology.
There are various types of Cryptocurrency scams which are rampant and it is challenging to trace the true owner of a cryptocurrency. Every year billions of dollars’ worth of cryptos are lost in scams. So as we enter 2023, let us look at a few prevalent scams in cryptocurrencies.
Crypto investment schemes
Scammers impersonate a successful crypto investor making massive money by simply investing in cryptos. They have formulated a “mantra” to make anyone rich. They wish everyone to be as rich as they are and want to extend their services to you.
However, you are required to pay an upfront fee. In most cases, these scammers block their victims and run away from them after cryptos transfer. However, in some cases, they might take all your financial details, and many commit identity theft and clean out all your cryptos and fiat money.
Some scammers also impersonate or endorse a fake celebrity to promote their cryptos. Then after sufficient victims have poured in their hard-earned money, they leave the scene without a trace.
Rug Pull scams
Another major cryptocurrency scams are the “Rug Pull,” which is generally associated with Initial Coin Offerings (ICOs) and Non-Fungible Tokens (NFTs). The scammers usually create fake tokens and “pump” them, attracting many to their scam. Once these tokens reach a sufficient price, scammers dump all their holdings at a substantial cost and leave their victims with worthless tokens.
The most famous “Rug-Pull” involved a fake coin named after the favorite Korean drama “Squid Game” on Netflix. Many got attracted, and the price surged to $90; these tokens were sold suddenly, leaving many victims with a token worth less than a cent. As per the rough estimate, scammers made $3 million.
These sams are also prominent in NFTs, where a one-of-a-kind token is sold at a premium price, and after some time, these tokens are not even worth a dollar.
Scammers have not even spared dating apps. Scammers will usually entice their victims under the guise of romance. Scammers usually lure victims who are a flight or two away from them. All the conversations that are ever held are through social media. They will usually make some excuse if you wish to meet them.
The conversation is purely based on romance; however, the topic changes from romance to finance, and then it’s just finance. Scammers will start giving financial advice, and then they will convince you to invest their cryptos in another wallet, and that is the last time you will see your romance run away with your cryptos.
Although these scams are not new, with the help of social media, they have adapted to spread their scams through social media. They will send emails with links to fake websites to gather sensitive details, like cryptocurrency wallet key data.
Since each wallet has a unique key, losing it can be troublesome. It is advisable not to click on a malicious link in the email, text message, or any other platform where you are required to give in your sensitive information, no matter how legit the website might appear. Although you might wonder who falls for it, this cryptocurrency scam exists because many do.
These schemes work on a chain system; money from new clients is used to pay off previous clients. The scheme continues as long as the induction of new clients generates a steady cash flow. Once the inflow of new investors stops, the entire system collapses.
You are supposed to pay some upfront fees in the form of cryptos before joining in. Once you have joined, you are then required to induct more and more people into the “business,” they can be your friends or family members.
Scammers advertise this scam pretexting “huge returns with minimum risk.” However, at the end of the day, once you have discovered this elaborate scam, you lose your cryptos and your family and friends.
Fake cryptocurrency exchanges
Scammers will lure in their victims by joining their cryptocurrency exchange. These exchanges might even have specific cryptos available for their clients to buy.
In reality, it is all bogus exchange, and their victims will only discover once they lose their deposits.
For this reason, it is advisable to choose a reputed cryptocurrency if you wish to avoid losing your cryptos to scammers. Therefore, it is your interest to research and select an exchange that fulfills your needs. Always go for trusted and reputed exchanges and see the fine print before signing up.
One of the latest cryptocurrency scams is the employment offer scam. Scammers will impersonate a recruiter or a job provider to access your cryptos.
However, before you can get a job, you must pay some upfront fees in the form of cryptos. Sometimes you even have to buy some products in cryptos, and they will be reimbursed once you get the job.
This article sheds some light on the ongoing scams quite prevalent in the world of cryptos.