Cryptocurrency and blockchain technology is one of the advancements in technology experienced in this age. The growth of crypto has never been without scams-one of its ills that has made its adoption difficult.
There are over twenty thousand digital assets in the industry today. Some have used the features and possibilities of making profits via investment in crypto to scam others.
In this post, we’ll discuss how to identify the various scams today. Note that you need to understand how cryptocurrency and its endeavors work before going into it.
What are Crypto Scams?
The fact that the digital currency market is exceptionally unpredictable due to its value makes it valuable to scams. Crypto assets promises huge returns on investment (although not certain) which make it easy for fraudsters to fake it.
While certain crypto scams are not difficult to spot, others are more subtle. According to a study by FTC, $1 billion dollars has been lost in crypto scams since 2021. You really need to watch out so as not to be a casualty.
How to Identify Crypto Scams in 2022
There are various means by which people scam others using cryptocurrency. Discussed below are some crypto scam gimmicks you need to know.
1. Phishing Scams
Phishing scams have to do with the scammers/fraudsters making use of your devices or wallet to rob you of your hard-earned money. Here, the target could be your personal information, login details to your crypto wallet/account, and so on.
Some may act as ”technical support” to scam you by getting your data. They may seek to assist for technical issues for your PC or other gadgets. It’s just a way to scam you of your crypto assets.
You need to spot this attempts so that you won’t lost all that you have worked for.
2. Investment Scam
As stated earlier, there are numerous projects out there. Crypto projects are created to solve problems. Con artists have therefore use this fact to hype projects and promise huge returns on investment.
They may tell you the more you invest, the more the returns on investment. This is a means to lure people and rob them of their investment.
Investment scam could also work like fraudulent business models. You may be persuaded to pay in crypto for the option to select their plan. They may present to you a plan of making more money via referrals.
3. Giveaway Scam
You could be scammed via giveaway in crypto. Fraudsters may disguise by using names of celebrities, influencers, and other public figures for crypto scam. They set up counterfeit crypto endeavors to bring in cash from individuals.
They might react to fabrication posts with other phony records to cause them to seem genuine. Social media platforms such as Twitter, Instagram, Facebook, etc. are being used for this cause. Deceitful posts frequently incorporate screen capture intended to make giveaways look real.
Giveaway scam could be done when a newly launched project makes plan for its airdrop. Though this is a means of giving free coins or tokens to users, it could also be a way to hurt you.
4. Extortion Scams
Crypto scams may come as a form of extortion. Scammers may threaten to humiliate you with a compromising data about you. To get out, they’ll tell you to send them a digital money installment.
To make this look real, they may show you something they got from an information break. It is a devise to extort you of your digital money.
5. Loader/Load up Scams
Crypto scams may occur when somebody request for crypto wallet or charge card since they need it for higher record limit. Consequently, the fraudsters offer a piece of the return they say they’ll get from their speculation.
Casualties in this case have their digital money taken. The law breakers may leave behind false Mastercard installments in this case. You need to beware of this scam.
How to Avoid Crypto Scams
One of the misconceptions about cryptocurrency is that it is a scam. Although there are crypto scams as listed above, there are ways to avoid them. Discussed below are some ways of avoiding these crypto scams.
1. Do your Research Before Investing in Cryptocurrency
You need to do a thorough study of the crypto assets to invest/buy, where to buy and sell them, and the trading strategies.
You’ll need to look out for the whitepaper of the crypto asset of your choice. There you’ll have the roadmap and other information about the cryptocurrency.
To be profitable in your crypto endeavor, you need to study about the crypto exchanges/platform to use. Trading on some exchanges are with very little fees while security of these platforms are also important.
With these in mind, you’ll be able to avoid crypto scams in form of a new project to invest in and how to make profit with your investment.
2. Don’t Trust Everyone
You don’t have to trust everyone because you might get scammed in the long run. Keep your details and personal information away from people you seem to trust.
Give every messages you receive regarding crypto endeavors greatest level of alertness. This will help you to avoid fraudsters.
3.Reject Free Offers
This is very important to avoid giveaway scams. You need to beware of fees that include repayment of expenses in cryptographic money.
4. Secure your Crypto Wallet & Devices
You need to secure your crypto wallet. You can do this by storing your information offline. Also use-multi factor authentication. This gives you the opportunity to fight attackers.
You need to keep security keys safe as well. This will help you to fend off scams.
The Bottom Line
Crypto scam is common in the crypto industry and has made many to lose their hard-earned money. Identifying crypto scams and how they work will guide you in your crypto trading journey.
You need to make your own research, keep details about your wallet and other information yourself. It is also important to know the platform to use for your crypto activities.
Also Read- Top 5 Crypto Myths You Should Know
Prestmit is one of the best crypto trading platform in this part of the world. The company meets the requirement if you are looking for a secured and easy platform to trade crypto.