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Common Characteristics of Cryptocurrency Frauds

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Source: time.com

Cryptocurrency has been changing the financial aspect of life since its invention. However, as much as crypto benefits like wagering in the best online casino, fraudsters are coming up with “smart” ways to prey on unsuspecting people.

Given that all cryptocurrency transactions are online, it is effortless for someone to be scammed of their funds.

According to a report by the Federal Trade Commission, scammers managed to steal cryptocurrency worth over USD 1 billion between January 2021 and March 2022. You can be safe from frauds if you understand the characteristics of scams.

Fake and Sketchy Websites

Cryptocurrency transactions happen on the internet. Scammers know this, and they create websites that may be similar to legitimate websites. They just alter the domain name slightly, which might be hard for unsuspecting internet users to notice.

They operate in two ways. The first way is like a legit trading platform. Unsuspecting people invest their crypto like they would normally.

The first payouts go through successfully, enticing the investors to stake more significant amounts. That’s when they lose their crypto as the request to withdraw is declined or the website is pulled down.

The second way fake websites operate is through phishing. As they look similar to legit websites, unsuspected users give up their details, including emails and private keys, to their crypto wallets.

Once a scammer has your password and private key, they easily transfer your funds to their wallets.

Always look out on the domain name of a website to make sure it is legit.

Fake Mobile Apps

Source: makeuseofimages.com

Like faking websites, scammers create copies of mobile applications and list them on PlayStore and AppStore. Unsuspecting people download these apps and proceed as they would with the legit apps.

Immediately they try to sign into their cryptocurrency wallets; they have give out their email and passwords to the scammers. Scammers can get into their wallets and empty them of the available crypto.

You are advised to use the right channels when installing an application. Get the link directly from the official website of the company.

Fake Celebrity Endorsements

Social media is taking up most advertisements and promotions. Companies use social media influencers to move their products and services. A famous person with a massive following on social media platforms like Facebook, Instagram, and Twitter is used to endorse these products.

Scammers have this knowledge, and they exploit it to their benefit. They circulate fake photos of a celebrity online, insinuating that they have endorsed their crypto platform or program.

Others go to the extent of creating fake social media accounts bearing celebrities’ names and using them to push their agenda.

Be cautious while using social media platforms. Always counter-check to confirm the official accounts of your favorite artists or internet icons.

Promises of Guaranteed Returns

Source: financialexpress.com

Any time you want to invest in a business, you understand that there could be two outcomes. You can make a profit or a loss. You can never be too sure to make profits as anything could happen.

You can notice a cryptocurrency fraud with the kind of promises they offer. They always promise guaranteed returns on investment. This should be a red flag since the business doesn’t work like that.

Promises of Quick Returns

In addition to guaranteed returns, frauds also promise speedy profits. For any legitimate business, there must be an activity that generates profits. For example, you can trade cryptocurrency where you buy at a lower price and sell to make profits.

Frauds don’t have profit-generating ventures. They just tell you to invest your crypto, and you will earn a certain percentage, like 10% or 20% of your investment daily. If you encounter such programs, just know that you are dealing with a scam.

Coins That Don’t Exist

Source: ctfassets.net

Some scammers plan and come up with a strategy to claim they have created a new cryptocurrency coin. They hype it to lure the public into investing with them. They even go to a level of renting offices.

Once you buy this “new crypto,” they disappear, never to be found again. You can avoid frauds by being updated in the world of cryptocurrency.

Find out the whitepapers of every crypto and the people behind it. You will often find fake cryptos that don’t have people behind them with straightforward biographies.

Conclusion

Many people are scammed in one way or the other, especially on online platforms. Cryptocurrency is on the rise, but it’s still new to many. Most are scammed for lack of knowledge. You can only be safe from scammers if you have the right information about cryptocurrency.