The tried and true “Nigerian prince” scam has adapted to the crypto world with scammers posing as slickly designed companies offering fraudulent cryptocurrency coins and tokens. Look for a cryptocurrency’s white paper to see how thoroughly it has been written and compare it to other, well-known currencies.
Other crypto scams include giveaways, phishing, blackmail and fake mining apps and networks. Scammers can pose as investment managers, celebrities or even a love interest on an online dating site.
- Phishing
Cryptocurrency scams take many forms, from investment schemes to romance and blackmail. But one common tactic is to request payment in cryptocurrency. Since cryptocurrencies are not entirely government regulated, and they are not widely accepted by businesses, requests to pay in crypto should be seen as a red flag.
These scams often start on social media or dating apps. The scammer will claim they have compromising photos, videos or confidential information about the victim and will threaten to make this public unless the user pays them in cryptocurrency. This is a form of extortion and should be reported to the authorities immediately.
Another common form of cryptocurrency scams involves bogus cryptocurrency exchanges. These fake sites look like legitimate exchanges and lure users in with promises of high returns on investments, celebrity endorsements, and supposedly fast and secure transactions. However, they are actually fronts for cybercriminals looking to steal your hard-earned coins.
To avoid this, only use official app stores and only download cryptocurrency apps from trusted sources. Look for apps that have been verified by crypto experts, and always check the credentials of a website or exchange before sending any money. Also, be wary of low-market-cap cryptocurrencies that suddenly spike in value. Crypto asset recovery can be incredibly costly, so it’s important to be vigilant and protect yourself with the right software. Norton 360 with LifeLock provides comprehensive protection against viruses, malware, identity theft and more.
- Fraudulent Websites
Cryptocurrency scams range from investment fraud to impersonation schemes. Like other social engineering scams, these take many forms and can be carried out on a large scale. For example, scammers may pretend to be tech support and trick users into downloading malware or giving them remote access to their devices. Similarly, investment scams often promise unrealistic returns on investments that aren’t even legitimate.
As with phishing, it’s important to verify any cryptocurrency exchange website or company you’re considering dealing with. Look for a padlock icon in the web browser’s address bar to indicate that the site uses SSL to encrypt data. Also, look for poor design or grammatical errors that could signal a lack of professionalism.
Lastly, it’s important to be aware of giveaway scams that use cryptocurrency as a lure. These can occur when a fake celebrity or business announces an online giveaway that requires participants to send in their cryptocurrency as payment. These scams can cost victims thousands of dollars before the giveaway ends and they never see any of their crypto back.
Be particularly wary of any company that asks you to send their cryptocurrency as payment for services. Legitimate companies will pay for services with fiat currency, not cryptocurrencies. Also, be aware of any new cryptocurrencies that seem to pop up out of nowhere. Any cryptocurrencies that don’t go through a rigorous disclosure process with detailed information about their blockchain and associated tokens are likely to be a scam.
- Scams on Social Media
Cryptocurrency scams can take many forms, including impersonating well-known companies and individuals to get personal and financial information from you. They can also involve fraudulent investment schemes, such as those that promise you can make lots of money quickly and with little or no risk. These scams can be delivered via email, text message, social media post or even a pop-up on your computer screen.
One of the most common scams involves fake cryptocurrency giveaways, often in which a celebrity or other public figure impersonates you on social media and announces that they’re giving away lots of cryptocurrency for free. This can be tempting, especially if the person says they’ll double whatever you send them, but remember that cryptocurrencies are investments, and any unsolicited opportunities that claim you can make money without doing much work are usually scams.
Another way to spot a cryptocurrency scam is to look at its white paper, which is a document that outlines the characteristics of a new currency. Real, recognized cryptocurrencies typically have white papers that are detailed and clearly explain the technology behind them. You can compare these with the white papers of established cryptocurrencies to see how similar they are and whether there are any discrepancies that should raise suspicions. Also, be wary of cryptocurrencies with developers that use pseudonyms or don’t have any sort of established reputation.
- Email Scams
Cryptocurrency scams can be especially harmful because, unlike money sent to a bank account, it can’t be reversed. This makes it harder to recover stolen funds or regain access to an account. In the case of a cryptocurrency scam, cybercriminals might contact users in the crypto community through social media and instant messaging, pretending to be from a legitimate platform or a new coin project. They might even use a website that looks similar to the authentic one, and then ask for payment in cryptocurrency.
A common type of cryptocurrency scam involves blackmail and extortion, where the criminal sends the victim an email claiming that they have compromising information about them, such as photos or videos, and demand that they be paid in Bitcoin to keep it from being shared publicly. This is an old trick that can be found in other forms of online fraud, and it’s important to remember that nothing in this world is truly free.
Another type of cryptocurrency scam involves fake celebrity impersonations or giveaways. Scammers might impersonate celebrities or other public figures, and then promote a giveaway that promises a certain amount of cryptocurrency to anyone who signs up. This is also a scam because there is no way to guarantee that you will make money, especially in such a short timeframe, and it’s easy for scammers to fake testimonials and endorsements. Financial investments are enough of a risk without scammers taking advantage of the volatile crypto market.
