The volatile nature of the crypto market has encouraged scammers to get into the scene. Cryptocurrency scams are popping up, trying to snare beginner and even experienced crypto players. The scope of these scams also varies, from obvious and detectable to sophisticated. The growth of the digital market and decentralized finance is likely to give scammers a fertile place to try their luck.
How do you recognize scam attempts? Are there any ways to avoid them? This guide will help you.
Types of Generic Cryptocurrency Scams
Some types of cryptocurrency scams are quite generic. They resemble typical scams you will encounter on various digital platforms. Examples are:
1. Giveaway Scams
Scammers use fake giveaways to snatch crypto assets from your wallet. They may send you “giveaway links”, sometimes accompanied by screenshots from the supposed companies that hold the giveaways. The trick is to make you click a phishing link or ask for some crypto coins as fees.
2. Technical Support Scams
Scammers often impersonate technical support or customer service staff to trick crypto owners. They may send emails or make calls to unsuspecting victims, using manipulation to make people think they have technical problems. The end goal is to ask people for their personal information to steal their crypto assets, such as the two-factor authentication codes or passwords.
3. Employment Scams
Employment scams send people fake information about job applications. They usually target people who post their resumes online or have LinkedIn accounts. Their goal is to trick people into giving personal information, which they would use to steal from crypto wallets. They may also ask people to pay them with crypto as “requirements” for the application process.
4. Phishing Scam
Phishing scams found their way to the crypto scene, similar to digital and online platforms. Scammers often target people who are less cautious, such as using fake websites similar to genuine crypto sites (usually with slightly modified URLs). Other methods include sending fake important emails or messages with links that lead to phishing.
Types of Specific Cryptocurrency Scams
Other types of cryptocurrency scams are more specific, and they are often more insidious. The scammers use sophisticated methods to target potential victims that are slightly more tech-savvy. Some examples are:
1. Airdrop Scam
Since people have started airdropping crypto, the airdrop scam came into the scene. The scammers usually do this by airdropping seemingly genuine crypto assets. However, when the victims send crypto back, they are sent a series of protocols that open access to their crypto wallets. This allows scammers to rob the content of the wallets.
2. Pump-and-Dump Scam
Pump-and-dump is a type of financial scam that is “ideal” for the crypto world due to its still-volatile nature. The scammers hype up small-value stocks using social media, online publications, and other means. Once the masses start buying the stocks, the scammers quickly sell them at high prices, profiting off the victims’ money.
3. Rug Pull Scam
Rug pull scam is similar to pump-and-dump, especially with the hyping part. However, in rug pull scams, the scammers often don’t give the victims the opportunity to sell their newly-acquired tokens. Once the hyped tokens reach high value, scammers often run away with most of the profits while the victims stay penniless.
4. Pig Butchering Scam
Pig butchering is a long-term scam that often only targets one person each time but with devastating results. Scammers will approach one seemingly gullible person, charming them through dating sites or online forums. After earning the victim’s trust, the scammer invites them to join a fake crypto investment scheme. The scammer may send the victim “profits” first to make the scam believable before duping them to keep sending money. Once the scammer achieves the target, they will run away.
5. ICO or Coin Listing Scams
ICO or coin listing scams often spread on Telegram, a popular messaging app among crypto users. These scams allure people to send money or fee for various digital asset exchanges. They may also lead people to finish steps of the listing protocol, which will compel these people to install malware that scammers use to drain their crypto wallets.
How to Avoid Cryptocurrency Scams
Cryptocurrency scammers will always try to dupe crypto owners, using the market’s volatile nature to find the gaps through innovative methods. However, you can always be cautious by following basic preventive steps. Here are some tips to avoid cryptocurrency scams:
1. Keep Your Crypto Identities to Yourself
Just like in other types of finances, your crypto identities and credentials should always be confidential. Avoid sharing things that should only be known by you, such as one-time passwords and other private information.
2. Be Aware of Unrealistic Promises
Cryptocurrency gives opportunities for some good investment schemes, but be aware of unrealistic promises. If an offer promises ridiculously huge amounts of profits in a short time, it’s a red flag.
3. Check URLs
Fake websites often imitate legitimate websites by slightly modifying the URLs. Before you click a link for an important crypto transaction or protocol, always double-check the address URL. Report or make the original website owner knows about the presence of that fake URL.
4. Be Cautious of Giveaways or Employment Offers
Giveaways and employment offers are the most attractive things people can receive nowadays. Therefore, you must be extra cautious when receiving those related to crypto. Remember, legitimate giveaways or employment offers will never ask people to send crypto (or money) as “requirements” or “fees”. It is better to skip them completely if you ever see them asking for crypto or personal information.
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Cryptocurrency scams are the latest forms of many common scams you could find in various digital and financial fields. Being aware of cryptocurrency scams and their common methods will help you avoid them. Reduce your risk of getting scammed by following this guide and being a smarter crypto owner.