The volatile cryptocurrency market has attracted many investors, both amateurs and professionals alike. Unfortunately, the unregulated world of cryptocurrency also attracts scammers looking to make a quick buck by scamming unsuspecting investors out of their hard-earned money. One coin that has recently become more popular amongst scammers due to its similarity with other cryptocurrencies is ripple XRP or simply “ripple.”
This article will focus on six sneaky ripple scams you should watch out for when investing in this cryptocurrency.
Cryptocurrency phishing scams are not new but have been on the rise as of late. Ripple is no stranger to phishing scams, as hackers stole over a million XRP tokens from Ledger wallet users in a phishing attack in late 2020.
These scams involve a target getting an email that looks like it’s from their exchange company (e.g., Coinbase) or another service provider. The email recommends they invest in bitcoin or other cryptocurrencies like ripple with simple steps outlined in the email. The scam email then directs the user to click on a link in the email, which sends them to a fake company. Hackers then use the user’s credentials to log in to their account and transfer their cryptocurrency.
Fake Cryptocurrency Exchanges
A cryptocurrency exchange allows people to buy, sell, and trade cryptocurrencies. With more and more people buying and selling crypto, however, more fake exchanges are popping up.
A fake crypto exchange works by claiming that it is a legitimate place to buy and sell cryptocurrency. However, when you join the exchange, you are asked to send cryptocurrency to fund your account. The fake exchange will then steal the coins you sent and close down their service, stealing your money along the way.
Another scam that has had its fair share of victims is what I call the middleman scam. The scam works with all cryptocurrencies, especially those tokens and coins that are a bit more difficult to buy, such as ripple.
In this scam, a fake exchange or website offers to “help” you get started investing in cryptocurrency. The scammers ask for a small fee or information about yourself so that they can create an account on your behalf with some larger company such as CoinBase (a legitimate online crypto exchange). The scammer then either steals your fee and disappears or uses your personal details to withdraw all funds from your account.
Another scam to be aware of is investing in fake crypto. The way this scam works is that scammers will introduce a new cryptocurrency as an alternative to Bitcoin. The scammers’ marketing ploy is to try and convince you that you’re too late to invest in bitcoin or ripple, for example, because those coins have already risen in value so much, and thus, you would have no way to make any money off your investment.
The fake crypto scam isn’t as far-fetched as you might think, as scammers have already been used at least once to steal over $6 million from investors.
Pump and Dump
Pump and dump scams have been around forever, even before cryptocurrency. A pump and dump scam takes place when a person or group of people buy up several shares of a company, then artificially inflate the value with false information. Other investors think that the shares are now worth more than they are, so they invest money in buying these overpriced stocks.
Once this happens enough times and interest has been piqued, the pumpers dump their stock at an inflated price before anyone knows what’s going on. These scammers make off with the money while the rest of the investors are left with nothing. This scheme doesn’t just affect stock investors; cryptocurrency investors can also be victims of pump and dump schemes.
No discussion of ripple scams would be complete without mentioning social media. Since the advent of cryptocurrency, social media platforms have provided a lucrative place for hackers to operate. There is nothing surprising about this, as hackers always look for ways to make it big by gaining control over other people’s money.
The social media scam works when hackers create fake accounts and use them to solicit cryptocurrency from followers. Another tactic is to directly hack popular social media accounts and ask followers to send money to a particular blockchain address. However, followers don’t realize that the user’s account was hacked and so inadvertently send their money to scammers.
Ripple scams have been taking money from cryptocurrency investors for a while. The more you know about these scams, however, the safer your money will be. By understanding these six scams, you’ll be much more likely to see your cryptocurrency investments grow.