Common Cryptocurrency Scams and How to Avoid Them

Scams are common online and cryptocurrency exchanges are no different. Read about common cryptocurrency scams and how you can recognize and avoid them.

Let’s start with the fact that in any area or place where there is finance and at least some benefit, there are also scammers who come up with various clever schemes and ways to get these finances. The crypto market was no exception. And if you want to dive into the world of digital currencies, you should know that there are risks here, too. And crypto scams are common. For example, Cryptotab browser scam, Crypto Trader scam, Crypto Engine scam, Latocen scam and other crypto scams 2021, which we will discuss later. 

The most basic rules that should be followed on the Internet when working with various services are to be vigilant and check each of them. Also, take the time to learn all about the development team. Are these real people? If this question is strange to you, then read on the Internet the story of how one of the startups published a photo of Ryan Gosling and indicated that this is one of the company’s employees. Additionaly study the business plan of the project: is it really a popular technology?

The risk of accidentally losing money is quite high if you carelessly treat your investments. Therefore, read this article to find out the most common crypto scams – this will save you from frustration and financial losses.

We help Avoiding Cryptocurrency Scams

Fraudulent schemes become more and more inventive over time, so it is not possible to foresee everything. It is also impossible to keep track of all the scammers on the Internet, as there are a huge number of them. And no matter how much you cover this problem, no matter how much you warn about possible risks, every minute in the world a lot of people give their money to scammers. But we will try to highlight for you the biggest crypto scams that beginners and sometimes experienced crypto investors fall into.

• Fake technical support 

Let’s say you use a crypto exchange, wallet, or other crypto service. You have a question about working with it or there is some malfunction, and you need to contact the support service. You go to Google, search for a phone number, call and start communicating with a specialist. It turns out that you have some difficulties with your account and you need to do something urgently: transfer funds, pay for something, give information to this specialist or other options. And now you are left without cryptocurrency in your account. How did this happen? The whole point is that scammers spread false numbers and contacts of support services on the Internet-especially large services and exchanges on the market. 

• Investment crypto scams

In the crypto world, financial pyramids are also common. If you are persistently asked to invest in something to get a big and fast profit, be careful. If at the same time you are asked to also attract friends and other people – this is an even greater call for concerns.

• False win

You may come across messages on social networks that some sites are distributing cryptocurrency (for various reasons). Or you can try your luck to win it for free. Of course,  if you are interested and go, you are informed that you have won – and it remains only to collect the prize, but also to transfer some commission to the “donor” account or provide the wallet data and pass verification. As a result, you will lose some of your funds or, even worse, control over your wallet.

We strongly ask you not to be led to the free distribution of cryptocurrency in social networks. 

• False site

Phishing sites are fake fraudulent websites that mimic a genuine website. You may not notice the difference, enter your personal data, provide confidential information, which is then used by scammers to literally rob you.

• Crypto Assistants

If you are offered a service that will easily increase your capital in cryptocurrency – pass it by. Remember that at the moment there are no 100% working programs that help you trade on the stock exchange without losses or just increase the amount of your coins. If the VMs promise this, they are scammers.

What You Need to Know About Cryptocurrency to Avoid Scams

You need to be very careful with financial transactions with cryptocurrencies, so as not to be influenced by scammers. There are some differences between regular currencies and crypto coins that are important to know:

Your digital money is not insured by the state, as is the case with fiat currencies. If there is some kind of fraud, you do not have to rely on the state. It will not be obliged to interfere and try to return your funds to you. Also, your transactions and payments with cryptocurrency are not protected by law. If any transfers on the card are protected, then in the world of cryptocurrencies you are on your own. That is why you should only be aware of your personal responsibility for all transactions that you make in cryptocurrency. Be sure to read the article to the end to know how to recognize scammers and not lose money.

Simple Ways to Avoid Crypto Trader Scam

First of all – always check where you get the information and use only official sources. Also remember that no specialist of the service, application, or wallet will require you to name your personal information, security code, or ask you to transfer access to your computer or phone – once they have access to it, they will be able to fully manage it. You will also not be asked to send funds to third-party addresses.

Carefully check the information you receive, always first make sure that you have taken it from an official source. It also does not provide third parties with personal information, keys and passwords from your accounts and wallets.

Don’t be fooled by extortion. Scammers often intimidate you and demand to provide them with data and personal information – but never give in to panic and do not act like lightning. Think about and double-check each step. This will save you money.

Read also The Top Crypto Memes of All Time from Godex.io

Let’s see how to find fake cryptocurrency

A fairly common phenomenon is the creation of fake projects and scam crypto to collect investments on them. How it happens: a new project is placed on the ICO, people are led to a beautiful description of the technology and promising earnings prospects, invest their money, and after a while the scammers simply disappear with it, saying (or not) that the project failed.

What warnings we want to give you: carefully study all the information about the project and especially about the team. Who are they? Are they known in the sphere? What kind of education do they have?

Carefully study the technical documentation of the project, which should contain the business plan, strategy, goals, roadmap, analytics, financial models, and legal aspects. If it is not serious enough, it contains errors or inaccuracies, it is a reason to doubt the authenticity of the project.

Everything should be transparent. Look for a project that is as open as possible with its community, and also carefully observe the interest in it from other investors. Are the coins selling steadily? Do the developers hide any data from you? Don’t create a rush to buy?

Take every aspect seriously.

Cryptocurrency scams List 2021

As we have already written, scammers in any field use the old proven methods that they have adapted, but also constantly come up with new tricks. Therefore, it is difficult to identify and describe all the common and dangerous types of fraud. Therefore, we will give a list of the 4 biggest crypto scams.

Scams in social networks

The most difficult thing – never believe it, if you are offered a free cryptocurrency or a quick increase in capital in a short time, do not believe it. And always beware of such offers.

But there is still a great danger when people hack the pages of people, and especially of the most popular people, and place links to someone else’s wallet, offering to transfer cryptocurrency there under various pretexts. That’s what happened to Elon Musk. Someone hacked the account of the person with the blue checkmark, replaced the avatar and everything else under the Elon Musk page and offered everyone to transfer Bitcoins to the wallet to increase this deposit.

Altcoin Pump and Dumps

One fairly large player in the market can influence the value of a small, cheap coin. He can buy it in a fairly large volume, thereby increasing its value, and then invite other people to invest their funds. When a sufficient number of such followers further raise the price of a coin, the player sells all their coins, quits the game, the price of it collapses and people get huge losses.

Malware and viruses

The good news is that antivirus programs are good at protecting your computer, crypto wallet, and therefore the means of such attacks. Therefore, it is important to keep an eye on this, as the risks are great. If a malicious program breaks into your personal data and transfers coins to someone else’s wallet, there will be nothing you can do about it.

Scam crypto services

On the Internet, disputes do not subside: is Cryptotab scam? Crypto Trader scam? Crypto Engine scam? Is Latocen scam? We recommend that you search for information and real user reviews before being led to enticing offers of easy revenue increases.

FAQ

How do I avoid crypto scams?

The rules are quite simple, but this often ignores them, not considering something serious. However, we will repeat that it is important to protect against scammers: install a good antivirus program on your computer, do not disclose passwords and codes from your crypto wallet and crypto service accounts, do not keep them in notes or social network chats, so that scammers can not hack accounts and decorate them.

Also remember that you can not disclose personal data to anyone, you should always carefully check the data about the company or developers with whom you plan to work or where you plan to invest. Don’t click on suspicious links on the Internet, in newsletters or messages in social networks from unknown accounts. 

What is the safest crypto wallet?

You can choose any convenient wallet among the most popular ones: Coinbase, Coinomi, Exodus, etc. It is enough to read a few articles on this topic. However, it is very important to install the official version of the app or register on the official website. Check this carefully so that you don’t end up on a fake scam site.

What is a 51% attack?

Cryptocurrencies are based on blockchain networks, i.e. distributed registries that store information about all transactions ever made in blocks. In networks based on the POW (Proof-of-Work) consensus algorithm, to add a new block, miners need to perform complex calculations to prove the completion of the work. The one who manages to solve the problem first receives a reward. The more computing power a miner has, the more likely it is to solve the problem first.

This importance of computing power makes it possible to conduct a 51% attack. Its essence lies in the fact that several miners with significant computing power (hashrate) can get a “controlling stake” in the network, that is, they will have the most hashrate. As a result, they can create blocks at their own discretion, manipulate two-way transactions, and not confirm transactions – this removes the possibility for multiple spending of the same money (double spending).

However, the larger the network, such as Bitcoin, the less likely and higher the cost of conducting such an attack. However, you should be careful with small networks of new cryptocurrencies.

Disclaimer: Please keep in mind that the content of this article is not financial or investing advice. The information provided is the author’s opinion only and should not be considered as direct recommendations for trading or investment. Any article reader or website visitor should consider multiple viewpoints and become familiar with all local regulations before cryptocurrency investment. We do not make any warranties about reliability and accuracy of this information.