CRYPTO & investing SCAMS and how to avoid them in 2022

Published by OrganicJoe on

Crypto and investing scams and how to avoid them in 2022
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A wise investor may earn amply from cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), and hundreds of others that have become popular commodities in online trade.
They enable us to transmit lightning-fast transactions overseas, create apps in a decentralized manner, encrypt data confidentially and effectively, and, most significantly, provide us with a creative new method to increase our wealth. However, unfortunately, the promise of quick riches might blind some people to the risks, allowing cybercriminals to mislead them into frauds.
In this article, we are have highlighted some common crypto scams and possible ways to identify and avoid them. From pishing to investment scams, all major crypto frauds are enlisted here.

WHAT IS CRYPTOCURRENCY?

Cryptocurrency is a virtual or digital currency. Goal in many projects is to be decentralized, i.e., it is not issued by any central authority, making them immune to government manipulation or interference. It can be used to make purchases or exchange for U.S dollars or other currencies.

Virtual currencies, unlike government-backed money, are determined by supply and demand. This can lead to considerable fluctuations in the market, resulting in significant profits or losses for traders.

Furthermore, compared to traditional financial products such as equities, bonds, and mutual funds, cryptocurrency investments are subject to considerably less government involvement.

CRYPTO SCAMS

Scams are common these days, and cryptocurrency is no exception. As you become involved in cryptocurrency, you realize that there’s risk involved in these transactions. Anyone looking for a fortune might quickly become a victim of opportunistic scammers and hackers.

Scammers are always coming up with new ways to take your Bitcoin or altcoin. Anyone who suggests paying via wire transfer, gift voucher, or bitcoin is a fraudster. Of course, after you’ve paid, there’s practically no chance of getting your money back. But that’s exactly what the fraudsters hope for.

It’s a good idea to familiarise yourself with various crypto scams to reduce the chances of being a victim of one. Some of the significant crypto scams are as follows:-

1. PHISHING

New type of phishing is when you have commented to for example Youtube video, Twitter, Telegram or any other social or messaging platform and they reply to you to pretend to be the owner of current media channel. They usually give you their direct Whatsapp number and continue chatting there trying to everything they need to get into your Crypto Wallet or Exchange account. You can be sure that in a minute your account will be empty and all crypto and other funds are transferred to other wallets.

Old school phishing is a scam which occurs when you receive an unsolicited email that looks as if it’s from your bank or, in this case, from your crypto exchange or wallet provider. This email contains a link that takes you to a site that looks almost identical to the market or wallet you usually use but is a scam site. Remember that those scam sites are also advertised so when you search (Google) certain exchange or service double check the address of the link or site you entered that you don’t accidentally give info to scam site.

When scammers have everything they need to get into your existing account they will steal your cash after submitting your account credentials on this unauthorized page.

How to avoid it?

  • To avoid these scams, you should never reveal your key to anyone or open any suspicious links. In addition, it would be best if you double-checked the URLs of genuine websites before visiting them.
  • Never ever give your Wallet Recovery Phrase to anyone. It is usually 12 word phrase that allow you to recover your Wallet and funds if you loose or forget your password.
  • Never give your login details to anyone. Especially when someone claims to be authorized support person.
  • When someone give their contact info for help in comments, it is 99% certain that they will try to phish important info.
  • Try to always go directly to website by writing the address yourself if possible. You search engines secondarily.
  • Always double check search result addresses before clicking. You can see the address bottom of your browser window. Go to only secured sites (HTTPS) and check that there is locked lock in the left side of the address.
  • If you suspect that you entered a phishing site, give wrong login info. If you can login with hocusbogus login info you have found a phishing site!

2. GIVE 1 GET 2

This is new type of very bold way to scam your precious crypto from you. Actually you might think that it would be impossible to fall in to this one but many people are greed or in financial emergency and might fall to this one pretty easily in despair. It also drives urgency which might break your logical thinking for long enough to loose your money forever.

You might have seen the ad videos on Youtube where Elon Musk or some other well known public figure promises to contribute for example 1 billion dollars to quickest. For example there is shortly mentioned that if you send 1 ETH to certain wallet, they send you 2 ETH back, if you send 5 ETH they send you 10 ETH back etc. There is of course website where is more detailed info and instructions. So almost 100% when it is too good to be true, your Scam Alert should scream and flash red.

3. FAKE WALLET SCAM

A fraud wallet scam is closely connected to the internet-age-old activity of phishing. Fraud wallets typically wait for you to come to them rather than sending out emails pretending to be a reputable company.

Like actual crypto wallets, these can take the form of a website or a mobile app. Everything may appear to be perfectly legal. These bogus exchanges may deceive customers by presenting very competitive market pricing, leading them to believe they are getting a good deal with quick and straightforward access to some inexpensive bitcoin.

How to avoid it?

Stick to and only download well-known and famous exchange apps. Don’t give in to pressure to deposit money or provide any personal information. You can use reputable sites like Coinmarketcap.com or Coingecko.com to check that certain decentralized exchange is legit. Remember that even then like always in crypto there is possibility that exchange is hacked or the team or persons behind it make a fraud.

4. INVESTMENT SCAMS & PONZI SCHEMES

These investment scams can happen in many ways, but they’re all full of fake promises and false guarantees. The scammers would provide services or goods with huge earnings or returns while posing little or no risk. They want in exchange that you send cryptocurrencies or allow them access to your wallets or trading accounts.

While the fraudster may first comfort you with tiny sums of the promised profits, they will eventually grab all of your assets and vanish without a trace.

How to avoid it?

Always be aware of guarantees and fake promises. You can ask yourself that does any big investment bank promise huge rewards? No, they can’t promise that. Anyone who offers you a huge reward without any risk is potentially a fraud. It is not possible to double your investment money in short period of time constantly. Do the research yourself before investing and do Google searching like “CompanyName experiences” and check if TrustPilot.com has any reviews. Scam companies are usually fake and not registered companies.

If there is staff photos in the website do Google Image Search and I have found that most are found in either ripped from some other company website or are stock photos. If they say that they have discovered something like “Out of the world algorithm” it is scam.

They wouldn’t offer it to public at first before have used it to make billions themselves. Websites of these companies usually are very clumsy. If they make millions every week they should have used little portion of that money to build credible website don’t you think?

4. MALWARE

Malware programs now pose newer and more significant threats to people. For example, rather than stealing credit card and bank account information, crypto-related malware is intended to gain access to your online wallet.

It may then drain your account, replace your valid address with a hacker’s address, or even install and use your computer with a cryptocurrency miner.

How to avoid it?

You should constantly update your antivirus and never open a suspicious attachment. In addition, it’s a good idea to be highly cautious about the apps you grant administrator access to on your devices. It is very advisable to use VPN software to protect your internet access. NordVPN has proven to work very well but there is many others available.

Crypto markets are very volatile. Image illustrates Bitcoin dumping 25% at September 2021 in 15 days.

5. PUMPS AND DUMPS

A pump and dump strategy involves a person or group attempting to artificially push up or pump the price to benefit from the sale of their assets. This is when many purchasers target an altcoin with a low market cap, buy that currency in huge quantities at a specific moment to push its price up, and then sell to profit from the substantial price increase.

This is unlawful in traditional securities markets. By putting your confidence in these types of scams, you may end up losing a significant amount of money.

How to avoid it?

To avoid such scams, keep an eye for fake news on social media to excite specific coins. Also, do diligent research before buying coins. In general it is harder to pump coins with greater Market Cap but remember that crypto markets are very volatile so 10-40% fluctuation are considered normal.

GENERAL WARNING SIGNS TO LOOK OUT

Some important Do’s and Dont’s to avoid being scammed in crypto are

Do’s

  • Resist the urge to buy straight away. Scammers frequently reinforce a false feeling of urgency around an allegedly popular cryptocurrency.
  • Before giving credit card information or sensitive information, thoroughly investigate the virtual currency platform or digital wallet provider.
  • Use only biggest Exchanges to buy coins.
  • Always use 2FA authentication logins to add extra layer of security
  • Before you acquire virtual currency options or futures contracts, be sure to check out the dealer.
  • Do your own research!

Don’ts

  • Don’t invest in cryptocurrency if you don’t fully grasp how it works.
  • Don’t be misled by social media postings promising famous bitcoin prizes.
  • Don’t give out your “safety keys” to anyone.
  • Don’t believe everything they write or say in the videos – Do your own research!

BONUS TIP

Where your actions are critical to avoid scams the ground rule or first principal is that you have a safe and secure internet connection. How you can establish that is that you always use VPN service when connected to internet. I have tested several services during the years and what I use today myself and recommend to all my friends and colleagues is NordVPN. Here comes some features:

NordVPN is essential to online life

  • NordVPN gives safe access to streams and other content from around the world.
  • By shielding their IP addresses, NordVPN protects users’ privacy and virtual location.
  • We secure online traffic through encryption, making it hard to spy on or hijack data.
  • Available on all major operating systems, including smart TVs and routers.
  • Our CyberSec feature blocks ads and malicious websites.

NordVPN is trusted by independent experts

  • PCMag: “Excellent”, Editors’ Choice VPN for two years in a row.
  • Forbes: Best VPN Overall.
  • WIRED: Best VPN Product for general use, highlighting speed and streaming.
  • TechAdvisor: Best VPN overall of 2020, the only product to score a perfect 5/5.
  • Comparitech: #1 compared to others for speed, streaming, servers, and security.

NordVPN offers more than other VPNs

  • It’s the fastest VPN, according to independent studies. Here’s the full AV-TEST report.
  • Our NordLynx protocol (based on WireGuard©) combines top speed with privacy.
  • No bandwidth or data limits for VPN traffic.
  • Connect up to 6 devices at once — protect your whole household with one account.
  • 5200+ servers in over 60 countries — more options to connect and less lag.
  • Specialty servers tailored to specific needs, such as P2P or extra security.

NordVPN is completely safe and legal to use

  • Based in Panama, meaning we can legally protect our users’ privacy.
  • No-logs policy affirmed by two separate independent audits.
  • We use diskless servers, which store no data or configurations on-site.
  • Upgrading to colocated and 10Gbps servers.
  • Customizable Kill Switch to protect users when their connection is disrupted.

Best of all? There is no risk to buying NordVPN.

They offer a simple 30-day money-back guarantee — all first-time buyers can get a full refund within 30 days of purchase, no questions asked. We accept all major payment methods, including cryptocurrencies.

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I wish you good luck and outstanding profits in the world of cryptocurrency and don’t get fooled by easy money!

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