Scams will always follow wherever there is money concern, and the same is true regarding cryptocurrency. There have been several scams which have taken place when it comes to cryptocurrency. Though it is a digital currency stored in a digital wallet, that does not mean it cannot be stolen.
This digital currency can be turned into cash by transferring them into a bank account. Bitcoin is one of the primary and different forms of digital currency. It does use the blockchain for other verification and is not supported or run by any financial institution. That is why it is hard to recover if it gets scammed. The Official Website of trading portals and digital wallets keep upgrading their software to avoid such hacks.
Cryptocurrency is a new trend, and technology is changing with time. Like that, thieves are getting smart and trying new methods to scam people or hack their accounts. But you must ensure you are not going near them. To know more about how to stay away from scams, here you will find that out.
1. Rug pull scams
Rug pull scams involve investment scammers who are ‘pumping up’ new projects, NFT or even coins to get funding. Once these scammers get the money, they will disappear with it. The coding of these investments will prevent the investor from selling the Bitcoin after the purchase so that the investors will be deft with the valueless investment.
It is the popular version of a scam which is a squid coin scam, and its name was placed after the Netflix series ‘Squid Game’. The investors had to play the earned cryptocurrency, and people would purchase the online game tokens so they could play the game and earn later to exchange for some other cryptocurrency.
2. Romance scams
Are you on any dating apps? If you are, you need to be aware that it is not protected from crypto scams. These scams may involve relationships, especially long-distance and strictly online, and they wait until they gain the attention and trust of other parties
Once the other party convinces you to purchase the cryptocurrency and get the money, the scammer from the dating platform will disappear. The scams here are also known as the ‘pig butchering scams’.
3. Man-in-the-middle attack
Suppose a person logs into their cryptocurrency account in some public place. In that case, hackers can steal their private or sensitive information, and scammers can easily intercept the information if it is sent over the public network. They can get your password, cryptocurrency wallet keys and also the information about the account.
The thief can gather sensitive information using the man-in-the-middle attack whenever a user logs in. That is why it is crucial for people to choose reliable and trusted Wi-Fi signals.
4. Fake cryptocurrency exchange
The scammers can lure investors in with the promises of a great cryptocurrency exchange. In reality, there is no exchange, and investors do not know if it is a fake until they lose the deposits. That is why the person needs to stick to the reliable crypto exchange market and avoid the unfamiliar exchange.
You should research something and check the industry sites for details about the legitimacy and reputation of the exchange.
5. Phishing scams
Phishing scams have been around the world for a long time and are still popular. In this, the scammers send emails with malicious links to some fake website to gather personal information about the person. They know the details related to the cryptocurrency wallet key information.
When you think of cryptocurrency, there is no password, and users will get the unique private key to the digital wallet, and if that key is stolen, that may cause some trouble. It is a special key, and the person needs to create a new wallet. You must avoid phishing scams and ensure secure information about the email link.
If you have any doubts, you should visit the original and legitimate website instead of clicking anywhere.
How to protect your cryptocurrency?
The person must protect the cryptocurrency against the above scams; here are some red flags you should avoid-
- Accept cryptocurrency as payments
- Contractual obligation
- Manipulative tactics such as blackmail or extortion
- Promise significant gains or double the investment
- Provide free money
- Several transactions in just one day
- Minimal details about the investment and money movement
To protect the crypto scams, you must practice better and protect your digital security, such as using strong passwords with only secured connections and always choosing safe storage. There are different wallets, such as digital and hardware, and it would help if you considered the wallet right for you.
Protecting your cryptocurrency is crucial; you must learn about some unique techniques. To be safe, you need a strong password and be aware of the above scams.