Types of Cryptocurrency Scams
In general, cryptocurrency scams fall into two categories:
- Initiatives aimed at gaining access to a digital wallet or credentials for the purpose of authentication. This means that fraudsters try to acquire data that gives them access to a wallet or other types of private data, for example, security programs. In certain cases, it is possible to access physical equipment, such as a PC or smartphone.
- Schemes that allow the transfer of your cryptocurrency directly to a scammer, encouraging you to give yourself away because of another, fraud with investment or business abilities or other malicious ways.
Social engineering fraud
In social engineering fraud, offenders use mental manipulation and deception to gain control over relevant data affecting user accounts. Effective scammers make people think that they have a problem together with an authorized person, such as a national organization, a well-known company, a technical support department, a member of society, a work partner or a friend.
Scammers will use up as much time as it takes to gain the trust of possible victims. As a result, they have every chance to ask the person to identify private sources or send funds to his digital wallet. In case the only one of such “trusted” persons demands cryptocurrency for any reason, this is a sign that something is not right.
Phishing Scams
Phishing scams are a traditional technique that can target your cryptocurrency wallet and email account logs to force you to provide sensitive data, such as private sources, to scammers. Imagine that you get a message that appears as if it were from your cryptocurrency exchange, and asks you to click on a hyperlink and enter the credentials of your cryptocurrency account. As soon as only you do this, the sources from your wallet will get to the scammers. Already after this they have all chances to ruin the wallet together with cryptocurrency.
Rule: never once inject non-dangerous data by means of hyperlinks in the electric mail. In case it may seem to you at first glance that something is not in any way so, always switch directly to the site by typing the URL in the browser. It is better to take precautions compared to regret.
Carpet-pulling scam
Carpet-pulling scam is that the newest crypto project is inflated, attracts traders, and then disappears, keeping absolutely everyone together with exactly nothing in any way important tokens. Such scams often involve fake Initial Coin Offerings (ICOs) and staggering commitments, which seem very excellent to miss. However, in the event that something is beautiful very well to be true, this, or rather in general, is the way it is. Constantly short study, first of all compared to investing, and be afraid of business projects, which count more in hype than in essence.
Fraud by impersonating someone else
Scammers, along with impersonating people, lie to themselves by impersonating legitimate companies or famous people, creating a false sense of urgency. They have every chance to provide themselves with recruiters or popular people on public networks, begging for cryptocurrency in order to “verify your account” or close a fake account.
One of the most common tactics is the distribution of fake funds to celebrities, who claim that if you send them several cryptocurrencies, they will send even more to the result. Spoiler alert: they won't do that in any way. These fraudulent exposures have every chance of being surprisingly convincing and often lead to large financial losses, for this reason, constantly double-check before sending cryptocurrency to anyone.
"As cryptocurrencies gain popularity, they often attract the support of reputable people. Unfortunately, certain types of marketing promotions are associated with fraudulent schemes if naive subscribers end up with significant losses," says Aleksandr Lang, Chief Financial Officer at 8lends.
New Trends in Crypto Fraud
Due to the unnatural intelligence that creates the most subtle and real deception, even prudent traders have every chance of being caught suddenly. Certain types of fraud are now associated with money laundering, falsely forcing victims to unknowingly carry out illegal transactions. The latest dangers, such as "love bullying" — long-term deception that enhances mutual trust, primarily in comparison with presenting the victims' resources and fake initial coin offerings (ICOs), are designed to deceive even the most distrustful traders. The best protection is to appear in the direction of incidents.
The "romantic harassment" scam
Fraud, along with attracting love clients, is a long-term practical activity, the presence of which scammers determine confidential relationships with victims, showing fictitious income from investments in order to lure them into all the largest investments without exception — just for the purpose of this, in order to disappear with absolutely everything. These types of fraud are based on psychological manipulation and have every chance of being very effective. Adventure, along with “romantic harassment“, is the newest word, perhaps the most widely used, but the word “pig slaughter” is reprehensible. A unique crime is committed from this, just as scammers “fatten up” their own victims with incorrect benefits before the final “slaughter”, completely covering their investments.
Fake Initial Coin Offerings (ICOs)
Fake ICOs are the latest propensity for fraud if scammers create compelling websites and marketing materials in order to attract investments in fake tokens and non-existent cryptocurrency plans. Promising significant profitability, they disappear as soon as they accumulate enough money, often saving traders along with unnecessary tokens.
You constantly spend time painstakingly studying, primarily compared to investing in an ICO, and you are especially careful with the latest programs that do not provide detailed and colorless data in any way.
5 Tips on How to Recognize a Fake Crypto Token Before Investing
- Check the address of the contract: The location of the contract is combined with any numeric token. Permanently obtain the location of the contract from service keys, such as the formal website of the plan, verified accounts on public networks or influential platforms for the purpose of listing cryptocurrencies, such as CoinMarketCap or CoinGecko. Double-check the location of the contract in some service keys to ensure consistency.
- Use risk assessment tools: Contract code research, swap analysis, and liquidity research are considered more basic ways to disclose token risks, but they have every chance of forming industrial obstacles, as they call for a specific degree of coding and skills to work with the blockchain. Users who are less familiar with the industrial nuances of numerical assets have every chance to rely on narrow-consumer devices designed to score the probability of a notch. For example, Token Sniffer is an easy-to-use and convenient tool that can help identify risks.
- Follow the news from Risk News: The best way to reduce the dangers associated with fraud in the crypto space is to follow the past incidents in the industry. Following special blogs and new information about security, given risks, can help you better distinguish between disturbing signals and beware of scammers.
- Check the token's performance: direct interest to the "red flags" in such token features, as well as none or originally low prices, market conversion into capital and liquidity. A legitimate token must have well-coordinated and rational indicators commensurate with the number of its owners.
- Beware of private channels: never purchase tokens through private channels on Telegram, WhatsApp or WeChat. Fraudsters often use these platforms in order to carry out preparatory sales of faketoken with promises of the highest value in the future.
FAQ
How can you tell if someone is a scammer?
If someone is begging for funds in sudden notifications or promising unthinkable profits, there is a great possibility that this is a scammer. You constantly spend time studying and distrust messages that seem unlikely or very excellent in order to be true.
What are the more common types of fraud along with cryptocurrency?
You are watching phishing attacks, fraud, along with the use of fraudulent money and impersonating others - they are more widespread, however, with the help of synthetic mental abilities, the latest types of fraud arise. Be ready to protect your own assets!
How can we not be a victim of a phishing attack?
In order to avoid phishing attacks, you do not switch according to hyperlinks in electrical messages, text notifications or QR codes; constantly look at websites directly. Performing caution is able to free you from many problems!
Is it necessary to focus interest in industrial documentation in order to identify a potential scam?
Check whether the industrial description clearly shows the technology of the plan and whether the information being tested is located; unclear components or obligations of guaranteed return may be alarming signals.
Final Thoughts
Fake tokens pose a significant danger in the cryptocurrency space, capitalizing on the enthusiasm of traders and their willingness to apply the latest abilities in the latest tokens. By staying in the direction of the incidents, conducting painstaking studies and paying attention, you will be able to protect yourself from this in order to be a victim of such scams. Always remember the old proverb: if something is beautiful, it's very good to be true, in which case, rather in general, it is.
