fbpx

Common cryptocurrency scams

Share This Post

Share on facebook
Share on linkedin
Share on twitter
Share on email

One fact: That cryptocurrency scams are on the rise. Yes, since the launch of the first digital coin a few years ago, the journey has not been without controversies. For instance, you may have heard people talk about scammers who steal millions of dollars from unsuspecting investors, both online and offline.

Bitcoin prices are hovering around $9k for a few days now, which explains the reason behind scammers infiltrating the lucrative industry. However, the increasing rates of scamming when it comes to digital currencies are also attributable to the fact that there exists no regulation across the world. There is genuinely a long way to go!

It is recommended that investors be careful to whom and what they are investing the money for. You see, crypto scams are one of the worst threats to the crypto marketplace. Now, on to the most common crypto scams and how to avoid them. Read on.

Fake Exchanges

Fake cryptocurrency investment opportunities are a significant threat, and that is why it is on top of this list. Back in time (around 2017), many miners invested money in fake bitcoin exchanges, a notorious one going by the name BitKRK. The exchange looked legit, and most investors knew it as part of the lucrative cryptocurrency trading community. BitKRK aside, other exchanges defrauded buyers out of millions of dollars before the authorities intercepted them.

Always make sure to do your homework regarding genuine investment opportunities and to avoid falling prey to the fake cryptocurrency exchanges out there. Alternatively, you can opt to stick to reputable bitcoin exchanges only. Or better yet, join crypto trading forums, so you always remain in the know about various exchanges out there.

Cloned Sites

These are usually clones of such legitimate exchanges, and ICOs’  websites and scammers use them to steal personal information and funds from buyers and investors. You see, it even becomes hard for most users to identify such clones. Why? Well, cloned sites use URLs similar to the legit sites to make them come across as the real ones at a glance. For example, the only difference between the two sites could be the usage of “0” in the place of “o,” and so on. Do you get the idea?

What should you do to keep clones at bay?

As a smart internet user, always make sure to double-check URLs to check for discrepancies. Or better still, bookmark the sites that you visit often. Play safe!

Fake “Support” Teams

Yet another threat to the bitcoin industry is the fake “support” teams who call or email you while pretending to be the customer care staff of a given cryptocurrency network. Next, they ask for your private keys, deposits, and personal information.

It is advisable to reach out to support teams of your networks using their legit contact details available on their sites. After all, not even the real customer support teams will ask for sensitive information such as private keys.

Cloud Mining Actors

Cloud mining is growing popular every day, and due to the high costs of resources for users, bad actors have seized that opportunity to carry out fraudulent activities. One of the most well-known fake cloud mining actors is MiningMax, a mining service that usually asks users to invest at least $3200 for daily return on investment and $200 for every referral. That alone makes it a clear example of a fraudulent Ponzi scheme. The site scammed unsuspecting users out of more than $250 million.

To be on the safest side, make sure to join Reddit.com as some users compiled a good list of such scams.

Fake ICOs

Before we explore this deeper, Initial Coin Offering (ICO) is a legit investment opportunity, but when the set rules are adhered to.

ICOs are tokens, which crypto companies offer their investors on a yet-to-be-launched coin. Investors buy the coin and are granted access to the crypto platform when it is eventually launched. The problem starts when a company offers fake ICOs and end up not launching any platform, one of the most common scams on Ethereum.

It is helpful to do background checks on any company offering ICOs before investing your hard-earned money to buy air, literally.

Phone Porting

If you have been made to believe that only newbies fall prey to scammers, you are wrong. Phone porting usually targets established investors in the cryptocurrency world. Attackers take control of mobile gadgets remotely using another phone and are one of the most common cryptocurrency fraud with cellphone authentication.

If a hacker knows some of your personal information such as your phone number, names and such, they can impersonate you and call your service provider requesting a change of your details and private key.

What to do to stop phone porting:

  • Contact the support team to change your details.
  • Change your phone line.
  • Speak to your bank and have them monitor any fraudulent activities.

Non-Existent Crypto Coins

In 2017, Police in the City of London busted a fake cryptocurrency business that was selling non-existent digital currency. Some “staff” at the fake company would cold-call their victims and persuade them to purchase fake crypto coins. Them man who set up the scam made the “business” appear authentic by using a London address, eventually squeezing over £150,000 out of his victims’ pockets.

Note that real investors will never call people to offer them opportunities, crypto or not. If you receive such a call, jot down the name of the caller, the company name, and the address. Next, make a call to the police to report a security fraud.

Misleading Bots

Telegram and many other messaging systems employ bots to respond to user queries with automated replies. Some sites use bots to tell newbies that they have a lot of money in their accounts, which is usually far from the truth. What this does is just add to the scam. A few days later, more and more followers end up jumping into the bandwagon, and that is how they invest in non-existent opportunities.

The iCenter

This one starts with a few scammers who recruit unsuspecting users to join a chat. When you join, you will find a whole lot of encouraging messages from scammers, which can easily inspire you to invest.

Newbies are given a digital wallet into which they are requested to deposit a certain amount of crypto and wait for, say, three months to see a return on investment. But the funds are never invested anywhere. Instead, the money is shared throughout the recruiting ring, paying out a given percentage of funds to each scammer from each round.

Shady Celebrity Endorsements

Scammers are also known to use fake endorsements to promote their counterfeit brands online. The false legitimacy often works too mislead potential investors. Most celebs have had their images used in fraudulent crypto deals.

Always pour through promotions and endorsements before scrutinizing the legitimacy of the site. If it looks too good to be true, it probably is.

Unfortunately, there are many scams out there that are used to steal from buyers and investors. For instance, you can also learn to detect fake emails. Also, if someone requests for a small fee of your crypto, there is a likelihood you won’t get it back. Learn more about how to protect yourself in this all-new industry before investing your money in cryptocurrency platforms.

More To Explore

Do you need help with your Bitcoin business?

We are more than a mining facility; we are your mining partners. Whether you're an amateur or a professional miner, our goal is to make your mining more profitable by offering the latest and most efficient ASIC mining solutions.