Cryptocurrency scams are on the rise and anyone can fall victim to one. Knowing what the more common ones are can help to avoid getting scammed.
Cryptocurrency s simply described as digital money. An idea that was first introduced with Bitcoin by the Natoshi Nakamoto over a decade ago. Since then, it has become so popular that many other cryptos are sprouting everywhere. Along with the rise of cryptocurrencies came the rise of exchanges, as well as scams.
Cryptocurrency scams are now everywhere online and while it’s true that investing in cryptocurrencies comes with great rewards, anyone considering an investment will need to be aware of the risks involved as well. One of the first things that experts recommend is to confirm that cryptocurrency exchange or startup is actually blockchain powered.
Platforms that run through a blockchain are using smart contracts to complete transactions without a need for human interventions. It’s the system’s protocol that checks the legitimacy of the transaction and such a process can prevent fraud. Despite this, scams still do happen a lot.
This year alone, the North America Securities Administrators Association (NASAA) has identified 244 fraudulent schemes, 154 of which were cryptocurrency investment scams. These instances raise two questions for those who intend to invest in cryptocurrencies, or at the very least, use cryptocurrencies for their transactions. The first is, what are the common cryptocurrency scams, and second, how can they be avoided?
Common Scams & Warning Signs
Topping the list of the most common cryptocurrency scams is when scammers trick crypto investors through fake mobile apps that are available to download through the Google Play Store or the Apple App Store. While they may appear to work perfectly once downloaded, their specific intention is to steal cryptocurrencies. There are certain ways to avoid this scam with the best way to make sure the app is downloaded from an official link. Even then, it is best to check the reviews and ratings for the app, in case others have noticed something strange.
Another common common cryptocurrency scam is when scammers send phishing emails with the intention of stealing data and cryptos. The email often suggests something is wrong with an account and requests the recipient click a link. However, the link acts as a gateway for the scammers to access the account. The best way to avoid this scam is to never communicate with the sender of the email.
The reality is, the list of common cryptocurrency scams that are happening daily is increasing all the time. Malicious actors never run out of ways to steal from unsuspecting cryptocurrency users, but being extra vigilant when getting into any crypto-related transaction can help to reduce the chance of being scammed. Whether cryptocurrency or not, if it’s too good to be true, it probably is.