When we talk of trading and investing in cryptocurrencies, it is easy to assume that we are aware of the great opportunities presented to us by such digital currencies. However, there is a downside to such investment opportunities, and that is the scams that come with them.
The very reason people love cryptocurrency is also what makes them vulnerable to fraudsters who would go ahead and take advantage of their desire. The section below will discuss the crypto scams that you must stay away from.
Let’s take a look at them
1. Bad Tweets and Other Social Media Updates
This is a very common scam, and it has been around for quite some time. Todays’ crypto world is often associated with Twitter updates and Telegram messages, so scammers started using these as their preferred medium to deceive unsuspecting victims. Telegram groups are the most targeted, as they tend to be more popular than other social media outlets such as Facebook.
The spammer uses the name of an already known crypto personality or a well-known organization and sends a message that promises a great deal of money, usually doubling your initial investment. Bitcoin Era is one of the safest platforms to start trading bitcoin with minimal risk.
2. Fake ICOs
An Initial Coin Offering (ICO) is how new coins are distributed. A scam of this type involves promoting a fake coin that doesn’t exist, offering discounts of up to 50% for buying into the ICO, then taking the money and running. So it is safe to only transact with a trusted crypto company.
With all of these scams, you want to proceed with extreme caution because even some legitimate coins have been scammed out of money by their team, so always use your best judgment before investing in any coin or token offering.
3. Phishing Scams
Be wary of websites that resemble an official site but aren’t. An example would be if coinbase.com was compromised and someone set up a lookalike domain of coinba.se. They will get your username and password when you attempt to log in.
You should bookmark the official sites to avoid this situation. If a website is asking you for personal information that seems suspicious, don’t trust it. Always reach out to the site’s support team before submitting any sensitive info.
4. Pump and Dumps
This type of scam usually targets coins that are valued at a low price. An individual or group will buy up a large number of coins, drive up the price through promotion on social media channels like Facebook, Twitter, etc., sell their coins after taking the price up a little bit, and then dump the coin back down into oblivion causing those who bought it to suffer massive losses.
You can protect yourself from this scam by staying updated on project developments and never buying into anything blindly based on social media promotion.
The Bottom Line
As cryptocurrencies become more popular, the number of scammers will increase exponentially. Cryptocurrencies are an attractive target for scammers due to their volatility and unregulated marketplaces.
Read also: Risk of Bitcoin Investment That You Must Know