The crypto market is infamous for its nature and number of scams. From fake tokens to sudden offers, one can hardly assess when and how they can fall prey to such activities, and thanks to the expansion of the crypto market, crypto scams have now become more popular than ever.
In fact, crypto scams keep traders away from engaging or trading within the crypto ecosystem. Several reports indicate crypto scams have resulted in investors losing several million dollars, and the rate of such losses increased by 270% in the current year. Thus, if you are a new investor planning to diversify your investments through the crypto market, here are some signs of being aware to avoid scams.
Types of Crypto Scams
Sudden offers
You might often receive sudden offers that tend to be lucrative. And most new traders fall prey to it. Remember, no crypto exchange platform offers you sudden unnecessary bonuses or offers which can multiply your earnings. Hence, it would be best to be on your guard and verify the authenticity of offers before jumping into acquiring them.
Fake celebrity advertisements
Celebrity marketing or advertisements is an age-old way to promote items, and cryptocurrencies are no different. However, most crypto scams target potential buyers or sellers through celebrity advertisements. You might receive notifications of celebrities claiming sudden giveaways or opportunities to multiply your wealth. However, these are far from reality. Watch out for crypto scams that ask you to purchase a specific currency and claim the opportunity of multiplying your assets. Remember, such earnings will never reach your account.
Blackmail scams
Blackmail emails are the most popular form of crypto scams. In such scams, scammers email the user or trader claiming to have a record of any illicit or illegal site that the user visited. They also blackmail the user for their personal credentials or crypto assets to keep such records undercover. It is crucial traders are aware of such scams and refrain from falling prey to them. Remember, such activities of financial extortion through blackmail are criminal offenses. Thus, one must report such activities to the FBI.
Romantic scams
Crypto scams pave the way to traders through online dating sites, too! In such cases, the scammer tends to develop a romantic relationship with the user and extort their personal financial details or crypto trading credentials. If that looks too far-fetched, they might also claim the user’s crypto assets banking on the romantic relationship. Almost 20% of crypto traders fall prey to such scams owing to their personal nature, and one must beware of them.
Transactions made through cryptocurrencies
Though one can pay certain platforms for their services through crypto tokens, this is the most common crypto scam. Watch out for websites that ask you to enter your keys. Remember, keys are linked to your crypto account, and it is only used for accessing your assets. Thus, refrain from paying in cryptocurrency on a website that asks for such credentials- there are possible chances for it to be a way of extorting your crypto assets.
Scams indicating a business opportunity
Luring traders into crypto scams through business opportunities is not new. However, no matter how old the technique is, investors still fall prey to it. Remember, if an opportunity looks “too good to be true,” it requires speculation. Moreover, one must avoid business opportunities or employment that asks for crypto assets or your keys as an application procedure.
Cloud mining scams
Cloud mining scams motivate investors to invest in a crypto cloud mining app. The scammers also promise investors of higher returns that can double their income. However, one must ensure they invest in an authentic cloud mining app, as most of them might be fake. If they are, you do not just lose your expected rewards but also the invested amount.
Fake Crypto Tokens
Crypto investors might come across strange crypto tokens in their wallets, and this is one of the first red flags of a crypto scam. Though new traders and investors might feel they are unaware of such tokens owing to their limited knowledge, these tokens might not be the ones they think of them to be. Thus, one must be cautious of such crypto tokens and only invest in them after verifying their authenticity.
Asking for money to access existing crypto assets
Some crypto scams might ask you for money to view your existing crypto assets. Though traders might fall into the trap, they must be aware of such scams. Remember, your crypto assets are the ones you bought, and hence, no authentic platform can charge you more money for them.
Rug Pulls
A rug pull is the most dreaded crypto scam. Under a rug pull, the developer launches a project or a crypto token and suddenly disappears after people invest in it. It is impossible to trace such projects later on, and hence, one must be cautious before investing in a new crypto project.
To sum up
Crypto scams might sound scary as it puts investor money and financial privacy and security at stake. Thus, it is vital to b cautious while trading in the crypto market and use your instincts before investing in a token.
