Cryptocurrency Scams: What Are Scammers’ Top Tricks And How To Avoid Them
Cryptocurrency has been riding the wave of wild popularity in recent times. Its tremendous adoration and utilization attracts its fair share of cybercriminals and fraudsters who launch phishing attacks, social engineering scams, amongst others. As investors, crypto enthusiasts, and traders' attention buzz towards Cryptocurrency, so does the attention of scammers, hackers, and cybercriminals.
Most Cryptocurrency scams aren’t anything new, they have been in existence as far back as Bitcoin was launched more than a decade ago. According to a research done by a cybersecurity company, Avast, they reported that most crypto scams are perpetuated through email, social media apps, fake websites, and phony content.
Due to the privacy protections embedded in Cryptocurrency, there is a greater chance that a cybercriminal can steal digital assets then vanish with little to no trace.
Awareness must be intensified about the high rate of scams cases being reported lately in Cryptocurrency. Also, easy ways to avoid these crypto scams should be provided and publicised, hence, why we have compiled this article.
What Are Cryptocurrency Scams? A Short Explanation
They are cybercrime or attacks aimed at illicitly obtaining crypto wallets to make away with the valuable tokens in the wallets. Cryptocurrency scams could also include deceiving a wallet owner into accepting anything that would make the wallet susceptible to attacks.
Crypto scammers are mainly interested in accessing the private keys or seed phrases to steal digital assets.
There are various types of Cryptocurrency scams that are common today.
Some of them include;
1. Romance Scams: Crypto scammers have developed several crafty ways of defrauding susceptible crypto users, one of which includes Romance Scams. These are prevalent on dating sites. Scammers utilize such dating sites to make targets believe they are committed to a relationship with them. After trust has been fully guaranteed, they craftily lure the conversations around Cryptocurrency.
The success of such a phony scam ends in the target transferring private keys or valuable tokens to the scammers. According to Research analysts, it’s been reported that about 20% of funds lost in dating sites resulted from cryptocurrency scams.
2. Imposter and Giveaway Scams: These are widespread crypto scams in phony crypto start-ups. It includes scammers creating a seemingly valid social media account, impersonating celebrities, and providing persuasive content. They craft messages that make unsuspecting people panic buy their crypto tokens out of fear of missing a huge opportunity. At times, such crypto scammers promise to multiply the number of Cryptocurrencies sent to their wallets. For instance, over $2 million worth of Cryptocurrency has been lost to scammers who impersonated Elon Musk.
3. Phishing Attacks: Phishing attacks have been in existence before the advent of Cryptocurrency. Phishing attacks are mainly targeted at getting access to online wallets. Their primary focus is private keys or seed phrases of a target's wallet. Using an email method, they send phony emails to unsuspecting individuals, leading them to a website to input their essential private information. It results in the loss of funds in the target's online wallet.
Phishing attacks are the most common type of crypto scam, and over $57.8 million has been lost. For instance, scammers have launched phishing attacks several times, claiming to be famous brands like Coinbase and others.
4. Blackmail and Extortion Scams: Crypto scammers that fall under this category blackmails to extort victims. They send bogus information about accessing illicit websites the target has been to and threaten them unless they send Cryptocurrency or their private keys.
5. Social Engineering Scams: These types of crypto scammers exploit individuals by manipulating them psychologically. They present themselves as a trusted entity to deceive their targets. Frequently, they portray themselves as Government agencies, popular crypto brands, NGOs or the target’s favorite team to gain trust. Later on, they demand Cryptocurrency or use phony links to secure access to unsuspecting targets' private information.
How Do You Secure Your Cryptocurrencies And Keep Them Safe From Scammers?
There are various storage platforms you can use to keep your Cryptocurrency safe. With the rising cases of crypto scams, keeping your crypto safe away from these cyber attacks should be paramount.
A. Custodial Wallets: This is a valuable and reliable storage source to store your crypto. Cryptocurrencies on custodial wallets are managed independently by a secure entity like a crypto exchange app like Binance. The downside of custodial wallets is that any cyber issue that affects the entity extends to your funds.
B. Software Wallets: They are applications or web apps that manage your private keys and enable easy and direct transactions. They are very flexible to use. Although, they pose a risk of permanent loss if the device they are opened on is lost or hacked. Examples of such wallets include sollet.io.
C. Paper And Brain Wallets: These types of wallets are both error-prone and easy to utilize. Unlike other wallets, they are not prone to hacking or other cyber threats. However, the loss or damage of such paper or memory results in the permanent loss of the funds.
D. Hardware Wallets: These wallets are different physical devices like a USB containing private information to a wallet. Hardware wallets are designed to be back-proof, and very few people possess the skill to hack such hardware wallets. However, losing hardware wallets poses a significant risk to the funds.
How Do You Avoid Cryptocurrency Scams?
Securing your Cryptocurrency wallets is an excellent way to protect your funds, but that is not the end of it. Cryptocurrency Scammers are everywhere, and they may continue to be. Therefore, learning how to avoid them is essential.
1. Beware of unsolicited messages on social media: Scammers send direct messages to targets on social media apps like Discord, Twitter, Telegram, Facebook, Instagram, WhatsApp, and others. Blocking such contacts should be the first step due to the high chance of fraudulent content.
2. Utilize services that ensure robust security systems: Before choosing software or a custodial wallet, ensure that such a wallet provides a robust security system to protect your funds. Such a security system should include a multi authentication system to provide reliable protection of your funds.
3. Install an Antivirus: Having an antivirus app to protect your wallets and crypto apps against malware and cyber attacks is an effective way to avoid crypto scams.
4. Stay aware of Mobile Phishing: Phishing attacks are the most common type of crypto scam. It would be best if you were mindful of such ploys to get access to your information. They employ cunny tactics and extend to mobile phishing apps too. Ensure you downloaded the right app and are on the correct website before inputting your essential private information.
Effectively following the steps and procedures mentioned above will help you secure your cryptocurrencies and keep them safe from scammers.
CoinShark is not responsible for any content, accuracy, quality, advertising, products or other content posted on the site. The review is for informational purposes, reflects only the opinion of the author and is not a proposal for action. The financial market is dangerous and full of risks, investments in cryptocurrencies can lead to losses. Users should do their own research before taking any action.