Scams inevitably follow when money is involved. The same applies to cryptocurrencies.
Wormhole, a virtual currency trading platform, suffered a $320 million loss as a result of a cyberattack in February 2022. In addition to this attack, a study by the Federal Trade Commission claims that cryptocurrency fraudsters have taken more than $1 billion since 2021.
Digital currency is a type of money that is kept in a digital wallet and may be converted into actual cash by the owner by transferring it to a bank account. Digital money is distinct from cryptocurrencies like bitcoin. Since it runs outside of financial institutions and uses blockchain for verification, it is more difficult to recoup from theft.
Even if bitcoin is a more recent trend, crooks are still stealing via traditional means. Here are a few typical bitcoin scams to be aware of.
Top 10 Crypto Scams
1. Bitcoin Business Plans
Scammers approach participants in bitcoin investment schemes under the pretense of being seasoned “investment managers.” As part of the scam, the so-called investment managers make extravagant claims about their success investing in cryptocurrencies and assure their victims that their investments would be profitable.
The con artists want payment up in advance to begin. The crooks then just steal the upfront payments rather than make money. In order to access someone’s cryptocurrency, the con artists may also ask for personal identity information under the pretense that they need it to transfer or deposit money.
2. Rug-pull fraud
In rug pull schemes, fraudsters “pump up” a new business, non-fungible token (NFT), or currency to attract investors. The con artists just vanish with the money after obtaining it. These investments’ software forbids anyone from selling bitcoin after buying it, leaving them with a worthless investment.
The Squid coin scam, which took its name from the well-liked Netflix comedy Squid Game, is a common variation of this fraud. To earn cryptocurrency, investors had to play: People would purchase tokens for online games and then earn more to trade for other cryptocurrencies. The Squid token’s value increased from one cent to almost $90 per token.
Trading eventually ceased, and the funds vanished. As users tried to sell their tokens but were unable, the token value eventually fell to zero. Over $3 million was obtained from these investors by the con artists.
Rug pull scams are also prevalent for NFTs, unique digital assets.
3. Romance swindles.
Cryptocurrency scams are not new to dating applications. These frauds include relationships that are established gradually over time, usually over long-range and just online communication. One side gradually persuades the other to contribute or purchase funds in cryptocurrency.
Once they have your money, the romance scammer vanishes. These frauds are additionally known as “pig slaughtering frauds.”
4. Phony Websites.
Although they have been around for a while, phishing schemes are still widely used. Scammers send emails with harmful links to bogus websites in order to collect personal information, such as the private key for a bitcoin wallet.
Users of digital wallets only receive a single, unique private key, unlike passwords. However, it is difficult to replace a stolen private key. Since each key is exclusive to a wallet, a new wallet must be made in order to change this key.
Never enter secure information from an email link to protect yourself against phishing schemes. No matter how trustworthy the website or link looks to be, always go directly to the page.
5. Attack By A Man In The Middle.
Scammers are able to access bitcoin users’ private information when they log in from a public place. Any data exchanged over a public network, including passwords, bitcoin wallet keys, and account information, is susceptible to interception by scammers.
A hacker can obtain this private information whenever a user is logged in by employing a man-in-the-middle attack strategy. When trustworthy networks are nearby, Wi-Fi signals from those networks are intercepted.
Utilizing a virtual private network to prevent the middle man is the most effective defense against these assaults (VPN). All data being transferred is encrypted via the VPN, preventing hackers from accessing personal data and stealing bitcoin.
6. Bitcoin Giveaway Scams On Social Media.
Social media sites are flooded with fake postings that advertise bitcoin prizes. To entice consumers, some of these frauds even use phony celebrity accounts to promote the offer.
However, when a user clicks on the promotion, they are sent to a phony website that requests verification in order to send them bitcoin. Making payment as part of the verification procedure demonstrates the legitimacy of the account.
The victim runs the risk of losing this money or, even worse, clicking on a malicious link that results in the theft of their personal data and bitcoin.
7. Ponzi Plans.
Ponzi schemes compensate its elder investors out of the earnings of new investors. Bitcoin will be used by cryptocurrency crooks to entice new investors. Since there are no reliable investments, the strategy is a money-making scam that goes in circles.
The promise of enormous riches with minimal risk is the core allure of a Ponzi scheme. However, there are always dangers associated with these investments, and no profits can be guaranteed.
8. Fraudulent Cryptocurrency Trades
Scammers could entice investors with claims of a fantastic cryptocurrency marketplace or even more bitcoin. However, there isn’t really a trade, and the investor doesn’t realize it’s a scam until they’ve already lost their money.
To avoid an unknown exchange, stick to well-known cryptocurrency exchange marketplaces like Coinbase, Crypto.com, and Cash App. Before inputting any personal information, do some research and look for information about the exchange’s reputation and authenticity on industry websites.
9. Offers Of Employment And Dishonest Workers.
In order to get access to bitcoin accounts, scammers will often pretend to be recruiters or job searchers. By using this trick, they provide a compelling job while demanding bitcoin in exchange for work training.
Scams involving the use of remote employees exist as well. For example, North Korean IT freelancers are attempting to take advantage of remote employment possibilities by putting up outstanding resumes and stating that they are based in the United States. The North Korean fraud that targets cryptocurrency firms was alerted to by the US Department of the Treasury.
These independent IT contractors look for work involving virtual money and make advantage of access to currency exchangers. To generate funds or steal information for the Democratic People’s Republic of Korea, they then hack into the networks (DPRK). These individuals also carry out other professional IT tasks and employ their insider access to allow hostile cyberattacks by the DPRK.
10. Malware And Viruses
Scammers don’t necessarily have to create anything from scratch. Sometimes all it takes to access a person’s crypto wallet and remove all the cash is a good old-fashioned computer virus or malware. Additionally, victims have little redress because these transactions are irrevocable. Fortunately, malware and viruses are well-known, and virus detection software can stop the majority of attacks. Once more, always use two-factor authentication to safeguard your wallets and applications.
How To Avoid Crypto Scams?
1. To anyone you confide, beware.
There is a lot of poor cryptocurrency advice out there, and you don’t want to follow someone into fraud by listening to them. Don’t listen to advice from famous individuals, users of social media or online discussion boards, or anybody else you don’t know well or who doesn’t have a strong financial background.
2. Ensure the safety of your cryptocurrency wallet.
Make absolutely sure your digital wallet was created by a reliable organization with a proven track record if you are purchasing virtual currency and keeping them there.
You shouldn’t share your wallet login information with anybody and stay away from using public wifi while using it. It’s also essential to enroll in two-factor authentication and password-protect your devices so that if someone gets a hold of your phone or laptop, they cannot access your wallet.
Additionally, using many wallets and even offline cold storage devices might be a smart idea. You won’t lose anything if there is a breach this way.
3. Utilize multiple-factor authentication.
With the help of multi-factor authentication, you can rest certain that even if a hacker manages to get their hands on your login information, they won’t be able to access your wallet or cryptocurrency trading account. This is due to the fact that a code would need to be provided to your phone or email before they are granted access. That won’t fly with them. Receiving a code you didn’t request will also be a warning that someone has tried to access your account.
4. Pay great attention to website URLs.
You don’t want to put your information on any unsecured websites or become a victim of a fake website. Therefore, before trying to log in, pay close attention to the web URL to be sure it is real and that HTTPS (rather than HTTP) is the first character.
How Can iTechwares Help You?
If you are a victim of a crypto scam and have lost your valuable crypto, we have got your back. iTechwares is specialized in recovering crypto money from hackers using different techniques. Contact us today to recover your crypto.
Practice excellent digital security practices like using strong passwords, utilizing protected connections or VPNs, and selecting safe storage to defend digital wallets from fraudsters. Wallets come in two varieties: physical and digital. Because they are housed online, digital wallets are more likely to be compromised. Hardware wallets enable offline storage of data on a device, including the bitcoin wallet and keys.