Ecash, the brainchild of Chaum and one of the first forms of cryptocurrency, was launched as an alternative to paper money in 1983. Such was the popularity of this “non-corporeal” currency that Digicash, the firm which was regulating this new monetary asset, was able to raise over $10 million in a decade. It was so because the general public liked the idea of getting rid of traditional money. In the year 2009, Satoshi Nakamoto launched Bitcoin, which was considered the first decentralized digital currency. Then, there was no stopping the rising popularity of cryptocurrency.
All glorious and brave new world, right? The thing with money is that wherever it is involved, there are always bad actors who want to steal it. Hence, cryptocurrency scams or frauds are gaining a foothold, with malicious actors defrauding thousands of people every day. They have managed to carry out these frauds with so intricacy that it is difficult to tell fake crypto from the real one.
Types of Crypto Scams
You may be a dedicated crypto investor who follows solid tips from experts, but you can quickly become a victim if you accidentally visit a fake website. Malicious actors have set up many websites that resemble original startups. Sometimes, the website may look identical to the one you want to visit, but it directs you to other payment platforms. The platform will not redirect to the crypto investment you researched about, but it can trick you into sharing your private information. Hence, it is a prudent choice to type the exact URL in the browser and double-check it, along with using a robust anti-phishing solution..
Fake Mobile Apps
It is another way malicious actors trick the crypto investors by using phishing as a tactic. They create fake mobile apps that users can download from the Apple App Store or Google Play. Although victims can remove these apps when they find out that they are fake, the damage is already done by then.
Android users are at a significantly higher risk of downloading fake apps, but every investor must be aware of the risks. The important things to look out for when downloading the app are:
- Misspellings in the name of the app.
- Misspellings in the app copy.
- Inauthentic branding with an incorrect logo or strange coloring.
Bad Tweets and Social Media Updates
If you follow celebrity and executive accounts on social media, you must be aware of the sheer number of impersonators who try to do anything to get past anti-phishing measures and get you to provide your login credentials. The same is the case with cryptocurrencies, with the rampant prevalence of impersonating bots. Hence, if someone is demanding money in the form of cryptos on these platforms, there is a possibility you will not get it back. Some people assume that because, as it is a replying person, it cannot be a bot, but that is far from the truth. Hence, it is a safe anti-phishing practice not to trust the offers which come from Facebook and Twitter.
Most crypto scams appear as emails that try to blackmail the victim, offer bogus business or investment opportunities, and online chain referral schemes. Additionally, scammers keep announcing fake initial coin offerings (ICOs) for stealing substantial funds. Suppose you receive an email that appears to have come from a legitimate crypto company. Will you start investing directly? It is always advisable to take extra precautions before investing your cryptocurrency. If you doubt the company’s legitimacy, it is prudent to ask someone who is working there. Also, go through every detail in an email to ensure it is coming from a legitimate source and is not part of a phishing attack or phishing campaign.
How To Avoid Becoming a Victim?
Stick to recognized and reputed Bitcoin Exchanges
Scammers set up fake crypto investment platforms for defrauding investors. It would be great if you took care to avoid these phony crypto exchanges. Subscribe to authentic notifications or RSS feeds, which will alert you about fake exchanges timely. Moreover, street clear of emails claiming to give you a bonus in the form of Bitcoin or any other cryptocurrency if you joined their platform, as these mostly are phishing emails meant to dupe you into giving away your PII.
Be Extra Careful with Newer Cryptocurrencies
After the skyrocketing demand of Bitcoin, several new cryptocurrencies are mushrooming across the globe. It becomes difficult to gauge the authenticity and performance of each one. Hence, before investing in an altcoin, make sure to look at its basics, including maximum circulation and supply. Bitcoin’s maximum supply is approximately 21 million, and circulation is 18 million, making it the most accepted and trusted cryptocurrency across the globe.
Stay Clear of Mining Scams
Cloud mining allows regular investors to mine cryptocurrency sitting at home without requiring any expensive hardware. They can rent the cloud server space at a fixed rate to mine cryptocurrency. However, for first-time investors, it is crucial to look for a genuine service provider. The fake ones make lofty promises and offer exorbitant returns on your investments, but they don’t mention the hidden charges for these returns. Scammers design these servers smartly to dupe unsuspecting investors. Hence, investors need to be vigilant when they sign up for cloud mining servers.
Choose Stable Crypto Options
A group of scammers can momentarily shoot up the crypto price by buying new altcoins in bulk. It triggers the fear-of-missing-out among investors, who rush to buy the new altcoin. The prices shoot higher as the investors start investing, then the scammers sell their coins at a higher price. Since such pump and dump schemes are typical in the world of cryptocurrency, you must try to stick to stable and popular options only.
Keep Your System Updated
Modern malware targeting crypto investors latch on to the user accounts. It retrieves their online wallet balance, empties their account, and inserts the scammers’ address in place of the authentic one. Such malware programs pose significant threats to crypto users. You must update your system firewall and antivirus and visit only secure platforms, which don’t prompt you to download suspicious attachments.
Cryptocurrency is the next breakthrough in the digital payment ecosystem, which is driving the numbers today. Unfortunately, malicious actors exploit the vulnerable computing systems for mining or stealing cryptocurrency. Thus, it becomes crucial to protect yourself and stay safe with the help of phishing protection service in cryptocurrency’s emerging market before you start investing.