Scams have existed in every stage of human civilization and are prevalent in fields with large capital inflows. As cryptocurrencies came to play a big part in the world of finance, criminals saw an opportunity to take advantage of people who were not aware of the potential risks of these investments. This article will address the dark truth about crypto scammers.
Types of crypto scams
There are multiple types of cryptocurrency scams out there; From fake companies that will try to take your money to Ponzi-schemes, scammers will come up with everything they can think of to look reliable and gain your trust.
The most popular crypto scams are:
Rug-pulls
Rug pulls happen when the scammer successfully promotes a cryptocurrency with no real-life application or use, thus using popular subjects like “meme-coins” to lure investors from a fast money-making perspective. Investors buy the tokens and cannot sell them from the moment they do so, as scammers program the wallet’s code to allow only insiders (scammers) to sell their tokens.
As a result, the token’s value can rise as new money comes in, but no one can take their profit and leave., So investors are forced to watch the price plunge to the floor and lose everything.
False investment/trading academies
As many people are entering the crypto market and trying to learn how to make a profit, scammers take this opportunity to build fake cryptocurrency academies. They supposedly give signals/courses to their subscribers, while giving low- quality information or no services at all. These scams are usually well-structured and will try to sell you unreal results, which is one thing that can help you spot them.
Crypto Phishing scam
Phishing scams are the most dangerous ones. Phishing (Fishing) is when a hacker/scammer steals your data to access your funds and manually steals them.
Sadly, phishing scams can catch you off-guard and do not need you to engage with any project. Scammers can copy customer support accounts or wallets of different services to trick you into logging in, while they are receiving your account details on the other end.
Pump and Dump scam
Pump and dumps are common scams in digital finance. They happen when a group of insiders raises the hype on a certain digital asset through publicity, thus motivating potential buyers to invest their money in it. When the insiders feel they’ve made enough profits, they sell most of the circulating supply resulting in massive price drop and leaving the investors with little or nothing of what they initially had.
How to be aware of crypto scammers?
There are multiple red flags you have to consider when being offered cryptocurrency, financial advice, or unverified “Customer Support” assistance.
- Never trust projects or people who take your money and promise outrageously high rewards.
- Do not respond to any unrequested Customer Support service mails or messages.
- Do not keep your private keys on your phone or computer. Write them down on a piece of paper and store them somewhere safe.
- Do not buy digital assets from projects with no verifiable data or real-use cases in its ecosystem, even if they are skyrocketing.
- Enable 2FA for your accounts.
- Stay away from suspicious websites that may infect your computer with malware.
- Do not ever get emotionally involved with any cryptocurrency project.
The truth about cryptocurrency investments
Although highly profitable, the cryptocurrency market is a dangerous place to put your money. Even the safest assets (like Bitcoin) experience unexpected price crashes, and it is easy to give in to panic, especially if you haven’t been in the market for a long time.
Every day new fraudulent projects come out, and it is up to every investor to stay vigilant. We encourage our readers to stay on the trustable side of cryptocurrency.