How to Avoid a Cryptocurrency Scam

 

Cryptocurrency scam is an increasingly common type of fraud in which a cybercriminal steals your money or digital assets by impersonating a trusted entity. For example, they might claim to be a government agency, well-known business or even tech support. They condition you to trust them enough to reveal your passwords, send funds or disclose personal information so that they can control your account and money. They may also demand that you transfer your cryptocurrency to them immediately.

In addition to the usual tricks (claiming to have sensitive material or private photos, promising high returns with no risk), they often lure victims by enticing them with investment opportunities. They're known to promise low risk and guaranteed payouts, and are often backed by celebrity endorsements and fake testimonials. If it seems too good to be true, it probably is.

For instance, let's say Natalia loves music, so she sees an advertisement on her social media feed from one of her favourite artists that supposedly recommends the company they work with as an investment opportunity. She clicks on the link and gets redirected to another website designed by a cybercriminal that looks very similar to a genuine crypto exchange. She enters her personal details to receive more information and then deposit the money into the "investment account".

As she starts investing her crypto, criminals block her access to her accounts, so that she can't withdraw it. They then hold her funds and investments hostage and make off with the money.

Unlike traditional scams such as Cryptocurrency scam fictitious gas and oil wells, bogus promissory notes or overseas investments, crypto-related scams can be extremely difficult to detect because they're usually carried out online and can't be detected with the naked eye. This means that there are more opportunities to get caught up in a scam and it's crucial for people to always stay vigilant.

It's also important to keep in mind that no legitimate business or government will ever email, text or message you asking for money and demanding that you pay with cryptocurrency. Also, never click on links from unexpected sources or transfer your coins to unknown wallets. It's better to use a reputable exchange or wallet with a proven track record for security and always keep your crypto brokerage and traditional bank accounts separate.

Lastly, it's also important to stay informed by following industry experts on social media and subscribing to reputable newsletters. This will help you keep up with the latest developments and trends in the cryptocurrency space, which could help you spot a scam before it's too late. You can also report a suspicious transaction to your local law enforcement authorities and crypto exchanges. In the US, you can file a complaint with the Federal Trade Commission or contact your local cryptocurrency regulatory body. Additionally, you can also file a complaint with your wallet provider or crypto exchange for assistance.