Typical Cryptocurrency Scams prevalent in this era – In the period of digital advancement, the popularity of digital currencies paves the way for scammers escorting havoc in the field of cryptocurrencies. The safety and security of a cryptocurrency is determined by encryption algorithms. Scammers these days are successfully penetrating all the defenses with their clever schemes. Increasing online threats and breaches compel people to seek countermeasures against these cryptocurrency scams. A cryptocurrency investor should be aware of the basic strategies that scammers own, to stay ahead of all the dangers that they bring.
Some scammers’ strategies to keep in mind are,
- Fraudulent websites
- Dispersal of malicious links leading to Phishing scams
- Pump and Dump scam
- Squid Coin scam
- Affinity Group Fraudulence
- Extortion scam or Blackmail scam
- Scammers impersonating Government agencies
- Fraud related to Initial Coin Offering (ICO)
- Investment fund recovery scams
Cryptocurrency fraudsters design websites that imitate an existing, genuine cryptocurrency trading platform to trick people. The genuine website and the illegitimate one look identical as they mimic their domain names and the layout of the webpage. Sometimes these sites garner investors’ identity and personal information and make a profit in other ways, or sometimes, they aim high and offer fake coins in the form of crypto. These websites let users withdraw money initially and later make an illicit profit by leveraging their trust and running away with their money.
Dispersal of malicious links and Phishing scams:
In a phishing scam, cryptocurrency scammers disperse malicious links through emails. They send these emails to their targets. The link in the emails redirect the victims to the websites they’ve created to fool people. Sometimes they deploy spyware in the form of PDF files, provided in the email, that garners all the information available in the system without the victims’ knowledge. Thus, the scammers collect information related to victims’ wallets and get access to their funds.
Pump and Dump Scam:
The scheme, Pump and Dump, has been here since the conception of passive income through the stock market and cryptocurrencies. The process of this scam is that scammers buy cryptocurrencies in bulk when the price of it is low. Then they spread false news in order to lure investors into buying them. As they successfully lure a mass into buying them, the price of the crypto automatically rises, and the scammers take advantage of the situation and sell all their coins to make a considerable profit. Since they buy cryptos in bulk, selling them at once leads to a price crash, and other investors are compelled to sell them at a loss.
Squid Coin Scam:
There are many games available in the market through which a person can earn cryptocurrencies. To participate in these games, scammers only need to pay for the tokens. For example, the game Squid coin, named after the popular Netflix series, put forward an offer of winning cryptocurrencies to the token holders. A lot of people participated in the game, but the scammers had other plans. They garnered all the money that the participants spent buying the token and simply disappeared without the participants’ knowledge.
Affinity Group Fraudulence:
In this cryptocurrency scam, scammers first look for groups or organizations that are driven by a particular notion or identified by a specific religion, race, etc. Scammers who are intended to manipulate all the members of the group first join the group. They pretend as if they are also one of them and are dedicated to the subject that the group or organization follows. They then pose to be a knowledgeable person in the field of cryptocurrency and encourage them to invest in it. They later somehow garner all the information related to their digital wallets and eventually insinuate it into them. They generally target the group leader or director first as they believe that it will be easy to manipulate others if they can successfully manage to lure the leader.
Extortion scam or Blackmail scam:
Scammers who run the extortion scam either blackmail cryptocurrency investors into handing out their crypto coins or ask for information related to their digital wallets. Scammers in this scam first garner victims’ personal information and then threaten them to make it public. They sometimes even claim to have victims' personal data when in reality, they do not have it.
Scammers impersonating Government agencies:
Scammers sometimes pose to be calling from a government agency as people trust the central authority quickly. They make people believe that their digital wallet is somehow not safe and can get hacked anytime. They ask for investors’ personal information in order to safeguard their wallets. People who trust them eventually end up losing money. A cryptocurrency investor should always keep in mind that cryptocurrency wallets and transactions are maintained and managed by a decentralized authority. A centralized organization has nothing to do with it. So we can say that someone contacting you saying that they are calling you from a government agency is definitely one of the scammers perpetrating cryptocurrency scams.
Fraud related to Initial Coin Offering (ICO):
Cryptocurrency start-up companies sometimes raise money by mining new crypto coins. The companies or organizations that own this scheme offer returns to the investors who help them raise money. This method of raising funds is popularly known as Initial Coin Offering or, in short, ICO. Investors need to be wary before contributing to Initial Coin Offerings as some scammers exploit this method to garner money, promising unbelievable returns for their own profit, and ultimately running away with the funds.
Investment fund recovery scams:
Losing money in the process of investing is a common thing for an investor. Some of them seek professional help to recover their money. There are many companies available that are dedicated to helping their customers in recovering their funds. Unfortunately, some scammers posing as fund recovery companies ask for payments upfront for the recovery process. Once the investors have paid them, expecting that they will fulfill their promise, the scammers then escape with their money.
Extensive threats of cryptocurrency scammers and cybercriminals are preventable when enough security measures are taken by investors. As we all know, knowledge is power, and being well-informed about these scammers’ tactics can help investors to stay ahead of all these threats.