Cryptocurrencies are all the rage right now, and everyone is talking about them and trying to get in on the action. While there is certainly money to be made in cryptocurrencies, there are also many risks involved. Unfortunately, this has also attracted scammers looking to take advantage of unsuspecting investors. This blog post will discuss some of the most common crypto scams and how you can avoid them.
Let’s take a look at these scams.
DeFi Cryptocurrency Rug Pulls
A low-ranking crypto-currency (crypto token) has been around for a long time and has suffered greatly from this lack of liquidity and acceptance around the topic of DeFi (decentralized financial exchanges). This cryptocurrency’s Telegram group is filled with individuals asking how to join their “DeFi” group.
The admins, who either purchased these accounts or hijacked them, answer all such queries that they are still working on and should be completed soon. In reality, there is no DeFi business built into this coin whatsoever, nor will it ever be any time shortly. Bitcoin Loophole is one of the best trading platforms that you must choose.
Advertisers use false claims to lure users into thinking they are visiting official sites, while in reality, the user is tricked into viewing ads or even downloading malware. Users should be wary of cryptocurrency-related websites that claim complex benefits without significant information about their owners, location, or supported cryptocurrencies.
Scammers may use a legitimate address for a cryptocurrency but redirect users to a different website where they are prompted to enter their password or other information.
Initial coin offering (ICO) is a crowd-funding method that companies raise money. In an ICO, some quantity of the crowdfunded cryptocurrency is preallocated to investors in “tokens” in exchange for legal tender or other cryptocurrencies such as bitcoin or ether. These tokens become functional currency units if or when the ICO’s funding goal is met, and the project launches.
Unwanted Crypto-Investment Schemes
It’s not just common stock shares that scammers are trying to trick you into investing in. Any investment opportunity is a potential scam if it doesn’t have your best interests at heart. If something sounds too good to be true, then it probably is. Remember the saying, “If it’s too good to be true, then it probably isn’t!” when looking at any potential investments.
SIM Swapping Scams
Scammers are using the “social engineering” technique to trick users’ cell phone providers into transferring their phone numbers to a new SIM card controlled by the scammers. Once they have the new SIM, they can reset passwords on crypto accounts and empty victims’ wallets.
One of the most infamous crypto swappers is called ‘Fonz,’ an unknown individual who has amassed millions of dollars through this scam.
The Bottom Line
If it sounds too good to be true, it is nine times out of ten. Don’t let your greed blind you from what you’re doing, and think with a cool head about the situation. If someone promises an absurdly high return for little work and investment, you should avoid the scheme by all means because, more than likely, it’s a scam meant to trick people like yourself into sending them their hard-earned money so they can sit back and laugh at all the suckers who got scammed.