Cryptocurrency offers a lot of innovative approaches to how people handle monetary transactions and investments. With just a few clicks from your smartphone or mobile app, you can already send and receive digital coins. However, this innovative approach is not devoid of malicious schemes and scams.
What can you do to spot and avoid these scams in the digital sphere? Find out more here at Casinodays!
Red flags for cryptocurrency scams
Knowledge is power, especially when dealing with digital currencies. There are a lot of scammers that will take advantage of the decentralised nature of cryptocurrencies to fool you into a false sense of security. It’s helpful to know the scams and warning signs that you need to look out for when dealing with digital coins. Here are some of the most common red flags of cryptocurrency scams:
Bogus crypto websites
Even before the rise of cryptocurrencies, scammers have been using bogus websites to phish information from people and take their money. Nowadays, scammers are becoming more creative in copying real websites without you even knowing.
Convincing web designs can fool you into thinking that the site is legitimate and before you know it, they’ve convinced you to input important data into the site. These scammers can take your digital coins once they have access to your private keys.
Fake mobile apps
Anyone that has an advanced background in coding and app development can create mobile apps. Scammers are smart and they can create fake apps that can lure you into investing money or phishing your private keys which directly undermines a platform’s crypto security.
Fake cryptocurrency apps are one of the most common ways investors get scammed. It’s easy to put apps in Google Play and Apple App Store where not every app is screened before release. People can easily download these apps and get phished for information.
Fake celebrity endorsements
You can find everything on the internet and social media sites. It’s a free resource that anyone can use, making it a perfect avenue for scammers to impersonate celebrities and scam you of your money.
This also applies to digital financial payments like cryptocurrencies. Fake accounts are rampant on the internet impersonating celebrities and earning your trust. In fact, according to the US Federal Trade Commission, there’s a widespread Elon Musk impersonation scheme that scammed a lot of people of their cryptocurrency.
Initial Coin Offerings (ICO) is a way for cryptocurrencies to get funding for their launch. Many crypto assets including NEO, Ethereum, Alias and Stratis started as ICOs before they completely launched. However, some crypto scammers seek funding and offer unrealistic high returns only to steal the money away from the investors at the first opportune moment.
Fake ICOs often have crude whitepapers that don’t have detailed plans or goals. Moreover, they may also have anonymous teams and developers that make it hard for you to verify their credentials and credibility to do the job.
There are a lot of exchanges that offer competitive rates for crypto investments and services. However, cryptocurrency scams take advantage of this by developing fake exchanges that swindle you of your money. They make ludicrous offers and discounts as well as unrealistic guaranteed returns of your money using fake statistics that don’t make sense.
Some scammers even go to the extent of copying the entire interface of a reputable exchange to phish your account information.
How to protect yourself from scams
Scammers know how to pull off creative schemes but you can outsmart them with the right crypto security knowledge. Here are some of the ways you can protect yourself from various cryptocurrency scams on the internet:
Check the URL
No matter how legitimate-looking a website is, you can verify its authenticity through the URL. Domain names cannot be repeated and many scammers create fake URLs that resemble the ones they copied.
Check for misspellings or weird characters on the domain to know if it is legitimate. Look for the lock icon near the URL bar to ensure the site’s legitimacy. If it indicates that the site isn’t secure, it’s better if you do not open it altogether.
Only use accredited and crypto secure exchanges
There are a lot of accredited exchanges where you can purchase, sell and invest in various cryptocurrencies and tokens including Binance, Coinbase, eToro and Gemini. Make sure that you do background checks on these platforms to know if they are legitimate. You can also check a variety of reviews from reputable sources online to find out what these exchanges can offer you.
Do not trust unverified accounts asking for money
Fake celebrity endorsements are everywhere and they can be convincing when you don’t know what to look for. Always check if the posts came from verified accounts of celebrities.
Moreover, always be wary of posts that ask for money even if they came from verified pages. Hackers may have infiltrated their accounts to profit from unsuspecting victims. It always pays off to be wary about your social media engagement, especially when it comes to crypto.
Look out for anonymous teams
It’s not surprising that some crypto developers keep their identities secret given that the identity of Bitcoin’s founder Satoshi Nakamoto remains a mystery. However, with how creative scammers can be as the digital sphere develops, it’s unsettling to invest in cryptocurrencies that hide its company’s identity and the people who run it.
There’s nothing wrong with investing in altcoins with anonymous developers as long as the goals and the features of the digital coin are apparent on the whitepaper. You can also do background checks regarding the cryptocurrency on reputable crypto sources.
Unrealistic price growth and other promises
Cryptocurrencies are volatile and there’s no predicting where they’ll be in the future. For exchanges or ICOs to promise guaranteed returns and substantial growth in an unrealistic time frame is a red flag you need to consider.
Scammers can think of enticing ways to market these promises and nonexistent opportunities to invest in their schemes. Always be in the know with cryptocurrency news and updated trends to make informed decisions when investing in the industry.