The bitcoin and cryptocurrency industry is an emerging industry, one with a lot of benefits and potential. And as with all things involving finance including those of fiat currencies, bad elements are known to capitalize on the lapses of unsuspecting individuals who lose funds to these schemes.
In this article, we highlight five (5) common BTC and cryptocurrency scams, as well as ways to avoid them below:
Cryptocurrency mining is a specialized crypto activity and requires a huge input of machinery and technicality too yield any sizeable gains.
However, the crypto newbie is being told otherwise by these ‘make-believe individuals’ who claim to offer you fixed returns for investing in their mining programs.
They resort to use photoshopped images, promises of big profits, and fake testimonials to convince you to part with your coins; after which they disappear.
There have also been recent cases of mining websites asking you to perform some activity for BTC; while this is possible you most likely will end up with satoshis (0.000000000000000001 BTC) after all the work, as most are pyramid/referral schemes for the promoters.
This form of cryptocurrency scam could come in multiple fronts: A high yield investment website with a variety of investment options; example CryptoDoubler (Gold, Diamond – invest $50 get $500 in 7days, invest $100 get $1000 in 10 days).
Others pose as regular comments on social media pages: Example “All my life I have been looking for ways to invest in cryptocurrency/bitcoin and have failed till I met Mr John Doe who now trades or helps me earn $100 every 3 days…Contact…”
They could also send direct messages seeking to cajole you into pseudo-investing.
Here, individual is lured through freebies or give away. A classic example is the fake “5000 BTC Binance Giveaway” – where the perpetrators created fake social media profiles and web links, asking users to join with a promise to get a part of the 5000 BTC available for grabs.
The scam artists either ask for some crypto deposit before you become eligible to win, or you are asked to register on a clone platform similar to the original; as they try to steal your log in or data details for later access.
There are also cases of lofty promises for referrals and the unsuspecting victim goes sharing links to other parties in hopes of a big reward.
Shit coin refers to coins or tokens with no potential or long term value. This type of crypto scam tries to convince the investor of the benefits of a relatively unknown coin and asking him to invest or buy its ICO (initial coin offering) with the promise that the coin project will be worth more in due time.
It is no longer news that most of these projects have either failed, leaving the investors with worthless tokens or have pulled exist scams.
The shit coin promoter says “Buy xyz coin, it will be worth…value in coming months, Buy xyz coin we have offices in…You’ll win a trip to…”
Note that, while there are coin projects which live up to their potential, shit coins do not stand the test of time; many are just crypto fund raisers in disguise.
This is an advanced scam model which employs tech tools and behavioural predictability of the victim.
For e-mail phishing, they try to get access to your security passwords or wallet by sending clone links of websites or infiltrating your PC/device through malware. These phishing e-mails could have attractive headlines and call to action. For example “Your blockchain wallet password is under review, click here ‘blocchain.com’ to reset password.- Notice the deliberate omission of the letter ‘k’ in the second link; in a haste and panic response you may not notice immediately.
Hackers employ similar tactics by trying to break down your defences and security in an attempt to steal coins or gain access to your accounts.
In all, cryptocurrency investing is serious business and just as you guard your bank savings and details, guard your coins too.
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