The more commonplace cryptocurrency becomes the more prone it is to do fraud and scams. Digital assets are just as much address as physical assets are in today’s world. Different cryptocurrency have different values in the market which makes them susceptible to attacks and scams.
Much like investors are benefiting from crypto, cheats are also having fun. Scams and frauds are usually common with less secure blockchain networks but all the transactions are typically susceptible to scams and frauds.
In this article, we will be listing some of the most common scams related to cryptocurrency trading and how to avoid them. We will also be mentioning just how common each scam is so that you can understand the risks.
Via Romance
Believe it or not, romance scams are fairly common and usually happen through dating apps. Everything happens online and it is completely reliant on first catfishing an individual and then scamming them out of money. People doing fraud are no longer interested in fiat currency and will ask for tokens or coins to be transferred.
They might even cook up a story to specifically ask for a particular cryptocurrency. The cheat might even ask for authentication credentials which should never be shared to anyone. Of the total romance related scams 20% of it was related to cryptocurrency. This gives a fair idea of just how psychological manipulation works well with cryptocurrency fraud.
Via Extortion
Blackmail is the oldest trick in the book. It is the most common social engineering scam which targets innocent people. Private information as well as images are used as barter to ask for money. No one wants to be exposed and hence compliance is necessary. Because all cryptocurrency platforms are well secured, the account authentication information has to be shared by the user willingly.
The private keys once out of the hands of the user will no longer protect the digital assets. Extortion in itself is a federal crime which can be reported as soon as it happens. You can know more about prices of different currencies through OKX.
Via Giveaways
Giveaways and pretending to be an authorized professional who can multiply the amount of coins sent over to them have become fairly common in recent times. Everyone wants to increase their digital wealth which is why people easily fall for this scam which only needs social engineering.
Scammers can pose as celebrities and use proper English which does not let anyone suspect that something wrong is going on. There is always a sense of urgency associated with giveaway scams. Quick action is required which banks on people panicking and just agreeing with the demands. The best way to avoid the situation is to ask for a longer period and think about all the conditions.
It will allow an individual to look at the facts and recognize that they are being scammed. This is more common than one thinks because stammers seem to earn a lot by pretending to be Elon Musk. Cryptocurrency worth 2 million dollars was transferred to scammers pretending to be Musk. One requires some common sense to dodge this trick.
Via Phishing
There is two factor authentication on all the crypto applications to secure the transactions. Personal authentication details and the private keys of the crypto wallet are required to give anyone access to all the assets. Social engineering scams work on the gullibility of the people so some level of vigilance is required.
Phishing is creating a fake website and asking for personal details and then using them for nefarious purposes. A phishing scam is related to making people believe that the email is official and the website is legitimate.
Usually there are some tell tale signs that will help individuals recognize false links so that they can protect their personal information. Even if the website seems real, one should try not to access it through random links sent on your phone number or the email.
Via Cloud Mining
Cloud mining is becoming a source of extorting money from people as upfront capital. These scan target buyers and investors alike to ask for capital on a stream of mining power. They will push for the transaction even though they do not know the hash rate.
You will not end up with any rewards by putting money down for cloud mining through unverified sources. It is important to understand that cloud mining is not a scam but it can be used as a scam.
Are Cryptocurrency Scams Becoming Common?
Unfortunately, with the rise and popularity of cryptocurrency the scams are becoming more commonplace as well. There are multiple cryptocurrency in the market which have different market shares and price volatilities. Most scammers target Bitcoin because of its high market cap and popularity. However, less significant cryptocurrency are also being targeted because people let their guard down, with respect to them.
There has been a loss of as much as 10.5 billion dollars up until November 2024 due to fraud. There is always a risk of security on less protected platforms which is why wallets encourage people for two factor authentication. Additionally, each individual should understand that the private keys are supposed to be kept private under all conditions. The moment anyone asks for your private key or authentication details, consider that something is wrong and stop engaging.
The Takeaway
Depending on the stamps that we have mentioned it is fairly safe to say that cryptocurrency related frauds are common. As more and more people move towards investing in cryptocurrency, scammers are finding ways to take advantage of that. The only true way to avoid losing your money is by staying vigilant about how you are being manipulated.
Almost all the frauds bank on psychological manipulation so, one needs to be very conscious of how they are being asked to act by an impersonator. Not sharing personal information is half the easiest way to keep your digital assets safe. Using reliable wallets is also highly recommended.
