Cryptocurrency scams have predominantly taken over the market. Especially with Crypto’s capability to flourish without any limitations. However, its lack of regulations has paved a walkway to escalated cases of fraud, forgery, and false undertakings. After a notable sweep in Bitcoins, scammers are meriting their tricks and strategies due to Crypto’s immense attention as a favorable and digital means of exchange.
Financial Fund Recovery functions towards accomplishing its motive of creating a scam-free trading environment by rendering fund recovery services to the victims and issuing safety tips, scam details, and other relevant information for the active traders. Here we have listed some critical cryptocurrency scams to acquaint every crypto trader with improved knowledge.
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What is Cryptocurrency?
Cryptocurrencies are online currencies created on BlockChain technology. It follows the whitepaper’s ideas by the mysterious Satoshi Nakamoto. The identity of the inventors of the technology is yet a secret. Cryptocurrency promises lower transaction fees than traditional online payment mechanisms, and, unlike government-issued currencies, it operates with a decentralized authority.
What is a Cryptocurrency Scam?
A cryptocurrency scam is an investment fraud where tricksters steal money from new traders hoping to invest in the booming digital currency world. Often crypto assets and services associated with them are not regulated by Financial Conduct Authority (FCA) against money laundering and the likes, meaning they are left unprotected by the Financial Services Compensation Scheme. This makes money recovery from cryptocurrency scams more arduous.
Duplicate Cryptocurrency Wallets
Fraudulent minds often focus on cryptocurrencies faring remarkably well within the marketplace. Duplicating crypto wallets, faking cryptocurrency exchanges, forming lookalike social media pages or websites has fooled a tremendous volume of traders. What might seem real through your digital screen might not be so within the practical world. It’s best to be cautious while trading in Crypto.
Renowned ICO Scams
ICO, also known as Initial Coin offering, is another form of a cryptocurrency scam. It is a focal point for all scammers and deceptive individuals. By forging white paper that belongs to renowned cryptocurrencies, it’s a piece of a pie for a fraudster to get away with a trader’s wealth. The liberal rules and regulations make it easier to formulate their escape.
Fake Schemes & Yields
Ponzi schemes are traditional methods of scamming various traders and ambitious investors. Such schemes assure impressively high yields to naive and inexperienced investors. However, as soon as the investors chip in their share of funds, they learn over time that the broker and the trading platform are nothing but a masked con business. Therefore, it’s advisable always to verify the dealer you’re oriented with before investing your money.
What are the different types of cryptocurrency scams?
If you ignore the high-tech shimmer of cryptocurrency, the related scams are just trendy versions of classic frauds.
Social Media Frauds
Social media has become a vital and influential force in mainstream society. Its rise has matched Crypto’s growing visibility in the media. And so, it is not shocking that hackers are utilizing social media’s reach to target Crypto holders and pull sleek crypto scams. They create fake social media accounts to ask Crypto from followers or directly hack popular Twitter accounts.
Social Engineering Frauds
Social engineering frauds are frauds in which hackers utilize mind games, manipulate, and cheat to control vital details relating to users’ accounts. Phishing is used widely in social engineering frauds. In phishing, hackers and scammers send emails to targets with fraudulent links to a website specially created to solicit essential details, such as bank account information and personal information.
ICO fraud increased at the top of cryptocurrency mania in 2017 and 2018. After an extraordinary SEC crackdown, the numbers of such frauds have lowered. However, they deny to die out fully. In recent times, in 2019, the federal agency continued its crackdown against such scams.
Bogus sites studded with fake testimonials and enamored with crypto jargon ensure huge returns on the condition that you keep investing.
Certain cryptocurrency outlaws peddle non-tangible opportunities to invest in digital currencies and form the illusion of big returns by paying off old investors with the money of their new targets.
Scammers now also persuade people they met on dating apps or social media to trade in virtual currencies or invest in them.
Other scams involve people posing as legit virtual currency traders or setting up bogus exchanges to lure people into giving them funds. There are also fraudulent sales pitches for “IRS approved” individual retirement accounts. Some frauds happen by hacking into digital wallets which are used to store virtual money.
How do you Spot a Crypto Scam?
Although identifying suspicious ICO is difficult, you can keep specific points in mind before making any investment decisions.
- Check credibility
- Over Exaggerated returns promises
- White papers to back up business
- Tangible working product
- Grand promotions
If you notice any of the above, you need to back out of the investment as it can very likely be a scam.
How to Avoid Cryptocurrency Scams?
Treat cryptocurrency as you treat any other investment. Titling it cryptocurrency or bitcoin does not mean it’ll give grand profits overnight.
Scammers set up fake cryptocurrency exchanges, and upon transferring the money, investors are unable to withdraw it. People also, at times, promote counterfeit coins to hike the price and then cash out before it drops.
The popularity of cryptocurrencies also attracts criminal activities, but as it becomes more mainstream, it increases consumer protections, reducing scams. But there always will be scammers out there trying to get to your funds. So, keep yourself updated on how to protect yourself and your investments.
If you are looking to dive into this bold new world of money, take these precautions to keep from being ripped off. You can save your funds from scams by,
Research, research, and then research some more.
Analyze and understand the Crypto you want to buy. Know,
- The management team
- What problems does your chosen crypto promise to solve
- The offices and where they are located
- The competitive environment
Also, do not forget to do your complete research on any cryptocurrency exchange or broker you are thinking of using.
Go for reputable and trustworthy platforms and exchanges.
There may be hundreds of cryptocurrency exchanges you come across, but choose only the ones that are licensed to operate in your state. If you are being promised interest by an exchange, ensure that you understand how that interest is funded. For instance, know if the exchange is loaning your coins or staking them and paying your rewards.
Assess the URLs
Imitating popular cryptocurrency websites or apps is another scam that you need to be wary of; carefully assess the URLs not to get tricked into transferring your coins or cash to a fake site.
Always bookmark the sites you use regularly and be vigilant of the URLs.
Celebrity Endorsements are Not Always Credible
These are particularly suspicious because the celebrity might have been paid to promote that coin.
Fraudsters now pose as billionaires or big names promise to make you a millionaire but end up taking all your funds. Take for instance the recent scams that involve Elon Musk impersonators. They may also use messaging apps or chat rooms to initiate rumors that a famous business mogul is backing a certain crypto coin. After luring in the investors, scammers sell their stake and the currency crashes in value.
Secure Your Passwords and Cryptocurrency Keys
Do not share them with anyone. The code should be known to you and you only. Your cryptocurrency key is no different than your bank PIN, so protect it cautiously.
What to do if you have been scammed?
If you have been scammed, you are not alone. Scammers are now sophisticated in their ways. Cryptocurrency Scam Recovery can be difficult. Track down your stolen funds with our help and get free assistance from FFR.
Financial Fund Recovery is a consultative and investigative body that recovers money lost in the hands of a scammer. With a panel of specialists, crime detectives, and analysts, it serves more than 22 countries. We are here to aid you and your funds. Contact us today.
Crypto scams are spreading like wildfire!
Crypto scams have been happening worldwide ever since the popularity it has established within the last decade. Financial Fund Recovery has noticed an explosion in crypto mining frauds and simulated cryptocurrencies as a crypto recovery expert.
The exciting offers miners facilitate are an easy trap for an enthusiastic investor. Sure, scammers coerce the investors into transferring cryptocurrencies to fake wallets. The catch is in staying updated with the market trends and identifying such fraudulent practices. However, specialists at Financial Fund Recovery understand that it takes a complex procedure to detect cryptocurrency scams.
If you’ve been a target of such cryptocurrency scams, then it’s about time you recover your lost funds with Financial Fund Recovery. Reach out to us now, and our panel of detectives, attorneys, and legal advisors will track and progress your cryptocurrency fraud case with diligence.
Any additional details or information you can provide us with will help in the process of retrieving your funds.