Cryptocurrency, while offering users autonomy over their assets and transaction, can also fall prey to fraudsters
Cryptocurrency frauds are using cryptocurrencies like Bitcoin which are rampant on the internet. If you’re caught off guard and choose the wrong investment, you might lose a lot of money and none of it will be safeguarded the way it would be if you had put your money in a bank or other safe financial institution.
The recent volatility of Cryptocurrency frauds has resulted in an influx of investors trying to profit from the new asset. Non-fungible tokens (NFTs) and decentralized finance (DeFi), for example, are cryptocurrency-based assets and platforms that may add to the attractiveness of potential new ways to make money. This potential for fraud might encourage you to use caution when making cryptocurrency investments and managing your crypto portfolio.
Here are some of the common cryptocurrency frauds to watch out for.
Returns that are promised to be extremely high or assured.
It’s so important to look at the offer and decide if it’s realistic. Making a 1,000% on your money in 10 months would be amazing, but is it likely to happen?
One of the ways fraudsters attract money to their scams is by making up fake promises of returns without any strategy and supporting information.
If the offer is too good to be true, it is always a good idea to check multiple times before you commit in. If a deal promises you ten times the returns with no real explanation in sight, chances are you are buying into some kind of Cryptocurrencies scam.
Fake mobile apps that closely resemble legitimate cryptocurrency apps are also prevalent on the Internet. If you mistake these apps/websites for the real thing and enter your personal or account information, the scammers may be able to steal your identity or cryptocurrency. In some cases, you might inadvertently use the service to send your cryptocurrencies directly to the scammers’ wallets.
Spoofing, which is one of the most common technological attacks, is prevalent even in the world of cryptocurrency. Make sure that you are engaging and making transactions only on recognized and approved platforms. Always double-check the websites and their URLs.
Masquerading as tech support is another manner in which fraudsters cheat users, impersonating a variety of companies including top companies (Coinbase) in the finance, tech, retail, telecom, and service industries.