Cryptocurrency is relatively new to our society, with Bitcoin coming onto the scene in 2009 following The Great Recession.
Today, it has become a form of payment on a new technology called a blockchain. At first, people were reluctant to adopt Bitcoin, especially since it was used as an underground currency on the dark web, notably Silk Road.
However, Bitcoin and other crypto are becoming more mainstream, with more people investing than ever. Unfortunately, there are Bitcoin scams everywhere, preying on people who don’t know how or where to invest in crypto falling for shady websites and practices.
Let’s learn more about crypto scams and how to avoid them.
Most Common Crypto Scams to Avoid
We’ve identified the most common Crypto scams and how to avoid them. They include fake exchanges, malware, and pump-and-dump.
Fake Exchanges
There has been a history of exchanges shutting down because they were fake. The main objective for these scammers is to take your money while the platform looks legitimate, offering outlandish claims such as get-rich-quick schemes.
Current examples of these practices include BitKRX, a South Korean crypto scam that looked like it was part of South Korea’s financial exchange, KRX.
Some ways to identify fake exchanges include:
- Unsolicited calls from a company claiming to be a crypto exchange
- Malware or Ads guaranteeing huge profit returns
- Excessive communication that is spammy or harassment
- Extremely high fees
- Pressure tactics to deposit
To be safe, sign up on the most popular exchanges, including companies that will trade on the stock market.
Malware
The easiest way for a hacker to get your information is to make you click a link and download their malware. This also can be done through ads, even if they are on a legitimate website.
Never click links or ads if you don’t know where they came from or on shady websites.
Before you click a link, look at the URL as you hover over your cursor to make sure you’re going to that address. However, the link will often redirect you to another website, and the malware downloads onto your computer, stealing your information.
In all, don’t click anything link that you don’t trust.
Pump-and-Dump Schemes
Pumping and dumping have been around for ages since the birth of the stock market. They are also prevalent amongst Bitcoin scams, with many coins promising to be the new Bitcoin and “going to the moon.”
While altcoins are real, with many being legitimate, new cryptocurrencies are emerging with scammers behind them.
All it takes is for a few thousand people to invest, even at one cent, for the scammer to make a profit. The coin ends up not moving anywhere, and the scammer disappears.
Only invest in coins with white paper, a team, and vision on the most popular exchanges.
Conclusion
Avoid crypto scams today by doing your research and dodging new platforms or coins until they can prove to be legitimate.
While cryptocurrency was created as an alternative to fiat, it has become mainstream, meaning corporate-backed companies will be the most legitimate platforms to invest with, such as CoinBase or Gemini.
