Crypto scams have become increasingly common over the years, taking various forms.
To protect your crypto assets, it’s important to stay updated and vigilant about new scams and their methods.
Here are the most common cryptocurrency scams:
1. Crypto Investment Scams
These scams follow a familiar pattern. Scammers posing as investment managers contact potential investors, promising high returns on their investments.
In the realm of crypto, scammers reach out to investors directly or post links on social media, claiming to be successful crypto investment managers who have made millions or even billions.
People easily fall for these scams because they have heard stories of individuals making substantial profits during crypto bull runs.
Victims are promised significant returns on their investments but are required to make an upfront payment as an enrollment fee.
Unfortunately, after making the payment, victims never receive any returns.
In some cases, scammers disappear with the funds and may even demand more money.
In more severe cases, scammers request personal information, including bank details and crypto wallet keys, which they then use to empty the victim’s accounts.
Another variation of this scam involves scammers creating attractive websites featuring popular celebrities and promising substantial returns on investments.
2. Rug Pull Scams
Rug pull scams involve collaboration among scammers, and sometimes they even involve social media influencers to gain trust.
In these scams, scammers work together to hype new fraudulent crypto projects.
Their goal is to drive up the value of the associated coins or NFTs (non-fungible tokens) of the project.
Investors buy these coins or NFTs, hoping to make profitable investments, and patiently wait for their value to increase.
However, once the scammers have amassed a significant amount of funds from investors, they suddenly sell their holdings, causing the price of the coins or NFTs to plummet.
As a result, investors are left with worthless investments.
For example, imagine thousands of investors purchasing coin A at its peak hype when it was valued at $50. After the scammers cash out, the price drops to $0.2, leaving investors unaware of the scam.
An example of such a rug pull scam is the Squid Game Coin, which capitalized on the popularity of the Netflix show “Squid Game.”
This scam coin had no affiliation with Netflix, and investors were left with worthless investments when the scammers disappeared after dumping the Squid coins.
3. Crypto Phishing Scams
Phishing scams have been around since the advent of the internet and involve social engineering techniques to trick victims into revealing sensitive information like bank and login details.
Scammers send messages containing links that direct victims to fake websites resembling legitimate brands.
Victims are then prompted to enter their information, which the scammers use for malicious purposes.
To spot phishing scams, pay attention to the sender’s email address. Check if it matches the legitimate brand.
Also, carefully examine the web address of any website you are directed to.
Scammers often use slight variations in the address to make fake websites look like the real ones.
4. Crypto Giveaway Scams
Crypto giveaway scams are prevalent on social media platforms, particularly Twitter.
Scammers create fake accounts impersonating popular celebrities or brands.
They reply to tweets by cloning these celebrities or brands and claim to be running a giveaway, and ask people to send crypto to a random crypto address, promising to double the amount sent.
Remember that legitimate crypto giveaways do not require you to send any crypto upfront. Be cautious and do not fall for such scams.
5. Flash BTC (Fake BTC)
Flash BTC is a scam that exploits a tool originally intended for educational or prank purposes.
To understand how this scam works, it’s important to grasp the basics of blockchain transactions.
Normally, a blockchain transaction requires multiple confirmations before it is considered legitimate.
For instance, when you send Bitcoin, it needs at least three confirmations to be confirmed as a valid transaction.
You can track these confirmations through a blockchain explorer or wait until you receive the funds in your wallet.
However, scammers use a tool called flash BTC to send imaginary fake Bitcoin to an address.
This fake Bitcoin will never receive the required confirmations because it is not real.
When victims check the transaction on a blockchain explorer, they will see a message indicating that it was a fake Bitcoin.
The scam primarily targets vendors involved in buying and selling Bitcoin.
Scammers contact a vendor, inquire about the vendor’s rates, and ask for the vendor’s Bitcoin address to make a payment.
They then send fake Bitcoin to the vendor’s address and show screenshots of the fake transaction.
Unaware vendors may proceed with the transaction, assuming it is legitimate, and end up losing their money.
Vendors who are aware of this scam wait until they receive the actual Bitcoin in their wallet before making any payment.
Cryptocurrency has been a remarkable investment opportunity, but it has also attracted bad actors.
To ensure your safety, conduct thorough research before making investments.
Stay informed about common scams and follow the steps outlined above.
And, seek out more resources online for further guidance.