Over the years, many people have become victims of cryptocurrency scams. Cryptocurrency is a decentralized virtual currency, meaning it’s purely online-based, like point spread [valid where legal] news or youtube jobs. You cannot transact with cryptocurrency physically because it is a digital currency.
As such, many fraudulent people come up with ways of conning others for their funds. As cryptocurrency grows, so is the increase in instances of fraud in the form of scams. You may be wondering how you can protect yourself from such scams. This article summarizes the five common characteristics enabling you to spot a crypto scam.
The Promise of Quick and Guaranteed Returns
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Cryptocurrency is a digital asset. You can buy, sell, or invest with it. Most people get into the cryptocurrency world for business and investment purposes. As such, scammers devise ways to lure them into their traps. They set up an investment plan promising you quick returns on investment.
For example, you’ll encounter a platform promising to double your investment within a week or 24 hours. You should ask yourself what kind of business gives you such returns within that short period. It should be a red flag for you not to invest in such platforms.
Everyone getting into business understands that you may make profits or losses. But a cryptocurrency scam will promise you guaranteed returns on your investment. That should be a clue not to put your funds in such an investment.
Faking/Cloning Crypto Exchange/Trading Website
The easiest and fastest place to buy cryptocurrency is through a crypto exchange platform. There are more than 500 crypto exchange platforms where you can buy and sell cryptocurrency.
Con men and women capitalize on these crypto exchange platforms to scam unsuspecting people. They create a website with all the features of a legitimate crypto exchange website and alter one or two letters in the domain name.
For instance, crypto.com is a legit website, but you may encounter a fake one as cryppto.com. Someone not keen on details can easily fall prey to such fake websites and lose their funds.
Phishing Links
Phishing is one of, if not the most common, ways that people get scammed. In this case, the scammers trick you into giving them your login details to your cryptocurrency wallet.
Everyone has at some point come across a link on Facebook or any website with an enticing message. “You have won USD 100 worth of cryptocurrency….” “Click here to claim your bitcoin reward….” Among others.
Once you click the link, you get a prompt to enter your details like name, address, email, and phone number. Some even ask you to log in to your cryptocurrency wallet. That is what the scammers want because as you type in your details, they collect them on the other side and use it to access your wallet(s).
To be safe from such a scam, ask yourself, how can you win a contest you didn’t participate in? Also, who will reward you for doing nothing? Do not click on links that don’t concern you.
Fake/Cloned Mobile Apps
Just like they create identical websites to legit cryptocurrency exchange platforms, scammers also develop mobile applications similar to legit ones. You will install the app on your phone and use your details to access your account.
Before you know what’s happening, the scammers will have your details and use them to empty your crypto wallets. Make sure you install a mobile application directly from the right website of the platform.
Coins Under Development
One of the ways that cryptocurrency developers get funds to do so is by offering sweet deals to investors and probable clients. They give you the option of being among the pioneers of the coin before it hits the market. For example, they may tell you that the coin will hit the market at a value of USD 10 per coin, but you can take up the opportunity of buying at USD 3 before then.
Even though many cryptocurrencies start this way, you should be cautious in making such decisions. Fraudulent people set up such schemes with non-existent cryptocurrency to con unsuspecting investors. Make sure you do thorough research to get all details about a coin that’s still under development.
Conclusion
Cryptocurrency is an excellent digital asset for investment and financial purposes. It has its benefits that make its growth increase with time. However, you should note that anything that has advantages will have some limitations.
Scammers come up with ways of conning people in the form of cryptocurrency. This article has discussed the five common characteristics of cryptocurrency scams to help you stay safe. It would help if you did more research to find out more information on crypto scams.
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