If you’ve got the stomach for it, investing in Bitcoin and other cryptocurrencies is a roller coaster. Investors and speculators from the general public are increasingly joining the bandwagon in the hopes of striking it rich.
There has been a rise in Bitcoin and cryptocurrency-related frauds and cyberattacks in tandem with the industry’s meteoric rise in popularity. Phishing, firm impersonation, and other Bitcoin-related hacks and frauds increased roughly 200% between October 2020 and May 2021, coinciding with Bitcoin’s off-the-charts bull run.
During that time, the bitcoin price increased by about 400%, reaching nearly $65,000. The next time Bitcoin prices rise, you can expect that shady online criminals will follow suit. Want to learn more about Bitcoin scams? Do you wish you knew how to keep your money safe? Find out by reading on!
Tips to Spot a Crypto Scam in 2022
You may avoid scams involving cryptocurrencies if you know what to look for. All relevant information about the blockchain and the tokens associated with a legitimate cryptocurrency is publicly available.
Tip#1: Identify the Team Members
White papers should always name the team behind the coin to avoid confusion. It is not uncommon for open-source crypto projects to not publicly disclose the names of their contributors. GitHub and GitLab host most open source projects’ source code, comments, and conversations.
For group collaboration, some projects like chat rooms and online message boards like Discord. White papers full of mistakes that lack any of these red flags are almost certainly fraudulent.
Tip#2: Search for the “Free” Things
Many cryptocurrency scams promise to “drop” coins into your wallet or offer free coins. Try to keep in mind that money and cryptocurrency are never without cost.
Cryptocurrency updates could include blockchain improvements or new security measures. Still, you should be careful of announcements like “$14 million raised” or messages that seem to care more about making money than advancing the underlying technology.
Tip#3: Check the White Paper
There is an evolution in the cryptocurrency market. A white paper outlining the protocols, the blockchain, the formulae, and the overall operation of the network, is often released for public consumption before this procedure.
Instead, the individuals behind fake cryptocurrencies issue “white papers” that are not good, contain numbers that don’t add up, don’t tell you how they plan to spend the money, or don’t appear like a natural white paper in any way.
Tip#4: Look Up Their Marketing
There is usually no profit in dealing with cryptocurrencies. They are initiatives that aim to accomplish something specific, and their currencies or tokens are to facilitate the operation of the blockchain. Legitimate cryptocurrency initiatives won’t boast about how great they are on social media.
Related: Is Cryptocurrency a Good Investment for Beginners?
What are the Common Crypto Scams that you Should be Aware of?
Some of these frauds and hacks may be recognizable to those who have been HODLING. But you should know what to expect if you’re just getting started with crypto. One step ahead of hackers and cybercriminals is essential since they constantly develop new and novel ways to steal Bitcoin and other cryptos.
A cryptocurrency scammer is the last person you want to give your hard-earned money to if you’ve been making progress and gains with the currency. Here are some of the most recent examples of crypto-related hacks and frauds.
Scam#1: Impersonating Email
The bitcoin industry is particularly vulnerable to this type of deception. Swindlers may pose as employees of reputable cryptocurrency trading platforms like Binance, Huobi Global, and Coinbase in phishing emails.
A hacker might pretend to be a Bitcoin wallet or other cryptocurrency program. Sometimes they’ll send you a fake security warning to scare you into visiting a fake website where they can steal your login information. It’s a way for them to access your Bitcoin or cryptocurrency wallet.
Today’s cybercriminals are skilled at developing fake websites that pass for the real thing. They utilize psychological manipulation to get you to provide your personal information.
Scam#2: Social Engineering Scams
Scammers resort to social engineering when they need access to sensitive user account information and cannot do so through more traditional means. Victims of these scams communicate with reputable organizations when they are being duped.
Cons will use all means to trick their victims into handing over sensitive information or funding their online accounts. Demanding bitcoin from one of these supposedly reliable organizations is a red flag for fraud.
Scam#3: Phone Impersonation
Con artists often make up phone numbers pretending to be associated with bitcoin services like wallets and exchanges. They’ll try to trick Bitcoin users into phoning them with fake security warnings or customer care questions by sending them spam emails and phishing links.
Be wary, though; con artists can use the phone to trick you. Fraudsters may fake genuine support lines and pose as legitimate businesses while making outbound calls, making them extremely risky. If a salesperson ever phones you, you should never give out private information.
Keep in mind that any sector of the economy might be the target of this or similar fraud. Scammers may contact you by email or phone, pretending to be from reputable companies like Amazon, Google, Netflix, or your bank to trick you into divulging personal information.
Scam#4: Dating Website Scam/ Romance Scam
Online dating is a standard tool for con artists to fool their victims into thinking they’re in a committed relationship when they’re not. After establishing credibility, cryptocurrency-related topics and exchanging coins or authentication credentials for an online account naturally follow.
Twenty percent of the reported losses from romance scams were in bitcoin, according to the Federal Trade Commission (FTC).
Scam#5: Crypto Giveaway Scams
On sites like Facebook and Instagram, scammers abound with phony announcements of Bitcoin prizes. They provide false screenshots purporting to indicate words of support for the giveaway from well-known figures, such as Elon Musk.
The fake posts are flooded by bot accounts, giving the appearance of authenticity. If you make it to the fake website, they’ll ask for your “address verification.” To confirm your address, you must pay Bitcoin to the blockchain address provided by the scammer offering the free Bitcoin.
They’ll take your verification money and say they’ll send you the freebie once they get it, but you’ll never see a dime. The best case scenario is that you transfer them Bitcoin and receive no response.
Your worst-case scenario is to accidentally visit a malicious website after clicking on a malicious link, scanning a fake QR code, or inputting your account details on the fraudulent website.
Scam#6: Extortion Scam
Blackmailing victims through email is another common social engineering tactic. A common tactic used by cybercriminals is to send victims threatening emails in which they pretend to have evidence of the victim’s use of pornographic or other illegal websites.
Hackers demand that the victim provide their private keys or give bitcoin to the criminal. Such incidents indicate an effort at criminal extortion, and you should report it to the FBI or other relevant law authorities.
Scam#7: Pyramid Schemes
During Bitcoin’s previous bull run, investors in the United States lost over $80 million due to fraud, according to research by the Federal Trade Commission (FTC).
That’s a whopping ten-fold increase over the previous year. The Federal Trade Commission said that over half of the victims were in the prime of their lives.
Companies or people may contact you, offering “financial independence” or “outrageous investment returns.” Bitcoin and other cryptocurrencies are often in the investing strategy. Numerous fraudulent schemes target investors.
Related: The Top Crypto Coins to Buy in 2022
Are there any Ways to Protect Yourself from Crypto Scams?
Considering your newfound knowledge about online fraud and assaults, it’s time to take precautions. You should never keep your bitcoin in an exchange wallet such as Coinbase, Binance, or Gemini.
You should do no warehousing on an exchange. Even with additional safeguards, these exchanges are a significant target for cybercriminals. After the hacking of Binance, $40 million worth of Bitcoin disappeared.
According to Fortune’s calculations, hackers have attempted to steal roughly $2 billion worth of Bitcoin over the past decade, with most of their success coming from attacks on cryptocurrency exchanges.
So, where would you recommend putting all of your Bitcoin and other cryptocurrencies so that they would be completely safe? And more generally, what other safeguards exist for financial assets?
If you want to invest in cryptocurrency for the long haul or keep it securely until you’re ready to sell, you’ll need a reliable digital wallet.
- Step#1: Utilize Digital Wallets
- Step#2: Set up a Strong Password
- Step#3: Keep Updating your Crypto Software
- Step#4: Think Like a Hacker
Related: Cryptocurrencies Wallet: Best Wallets to go for Investors
1. What are the most common crypto scams?
Rug-pulling, romance fraud, phishing, and investment scams are among the most common types of fraud.
2. If someone sends you Bitcoin, can you get scammed?
You shouldn’t go through with deals you don’t fully understand. The only ways for someone to take your cryptocurrency are if they successfully trick you, if you give them the keys, or if they hack your wallet and steal the keys.
3. How do you not get crypto scams?
Knowing the methods con artists use and keeping your guard will significantly reduce your chances of falling for one. Recognize the warning signals, and keep your keys in a location other than your wallet.
4. What are the most dangerous BTC and crypto scams?
Bitcoin scams typically involve phishing emails, fake or spoof websites, or the imitation of reputable bitcoin businesses. It’s very uncommon for scammers to use crypto freebies to get you to visit dangerous websites.
5. What do Bitcoin scams mean?
Bitcoin scams come in many forms but always have the same ultimate goal. When hackers and cybercriminals want you to transmit Bitcoin to their blockchain address or take over your account, they resort to trickery. They may try to hack your device in several different ways, including phishing and impersonation.
6. Is there a way to protect me from crypto scams?
Your digital assets should be kept in either a “hot” or “cold” wallet. Cold wallets are more secure than traditional online wallets since they are offline hardware devices. You should always utilize a virtual private network (VPN) when buying, selling, or exchanging bitcoin online.
Entering the bitcoin market might have profound effects on one’s life. If you make a deal at the right time, you may make a lot of money. Jumping into a frenzy of fear of missing out might teach you a valuable lesson in patience, though.
There’s a chance your partially held Bitcoins will be worth millions in ten years if you’re considering entering the cryptocurrency market. Research and learn as much as possible about the space before diving in.
PayPal now accepts Bitcoin purchases. You wouldn’t want your hard-earned digital cash to fall into the hands of cybercriminals and hackers because of fraud or because you weren’t careful enough to protect it. Look into the most exemplary virtual private networks (VPNs) for crypto trading for added safety.
Here, I conclude my article “Crypto Scams to be Aware of in 2022.” For more crypto articles, you can visit our cryptocurrency category page or stay tuned for more informative articles!
Related: Bitcoin Price Drop: Reasons for the Decrease in Price
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