Bitcoin, Ethereum, Dogecoin, Polkadot, and Tether; who hasn’t heard of these digital currencies? In 2021, these have become the buzzword, and considering that the total value of the crypto market has hit $1 trillion, it is a given that they are not going to go anywhere anytime soon. These financial investments carry risks, but it doesn’t mean that you also have to gamble on your cybersecurity as well. Regardless of the secure nature of blockchain technology that powers a number of cryptocurrencies, a number of scams do happen in the space. The outcomes of these scams can be harrowing, with digital wallets drained and accounts commandeered.
Worse yet, crypto transactions are not usually reversible, which means once your hard-mined money ends up with a scammer, the chances of getting it back are next to nothing. So, what should you do? You need to be aware of cryptocurrency scams in order to defend and protect yourself. What are they? Let’s take a look:
Investment or business opportunity scams
These scams typically start with an unsolicited offer, inviting you to become a crypto investor by visiting a fraudulent website to learn more. Once you do visit, you will be encouraged to invest, so you can start making money quickly. The website may even boast celebrity testimonials and endorsements that are usually faked. After you make your transaction, the offer doesn’t really come to fruition and you will never see your money again. These crypto scams are very similar to Ponzi schemes or multi-level marketing schemes. Their red flags include ‘guarantees’ of making money quickly and an offer that sounds just too good to be true.
Impersonation cryptocurrency scams
When a cybercriminal poses as a reliable or trusted source for convincing people to conduct a crypto transaction, it is an impersonation crypto scam. They could be disguised as government authorities, banks, credit card providers, and even a service provider. Their standard practice is to reach out through email and request you to complete payments in cryptocurrency. In fact, they can even pose as celebrities. Thus, it is best to exercise caution when you receive emails demanding any sort of payment, particularly when the request is urgent.
Blackmail or extortion cryptocurrency scams
One of the oldest crypto scams in the book are extortion and blackmail scams. You get an email, informing you that someone has compromising information about you, whether it is videos, photos, or any other confidential data. You are asked to pay them in the form of cryptocurrency, or they will release it. The payment is usually requested in cryptocurrency because the transaction cannot be reversed.
Social media cryptocurrency scams
These scams are just what they sound like i.e. they take place over social media. Oftentimes, this is through a false social media post or advertisement that requests payment in crypto. You may even see other users leaving reviews or responding to the post. These are usually bots. Sometimes, the message or post could also be from a friend who have had their account hacked.
Alternatively, a potentially fake cryptocurrency may also be touted by social media influencers and they encourage users to sign up and send payments to help them multiply. Sometimes, influencers simply pocket the payments you make. These are referred to as influencer cryptocurrency scams.
Giveaway cryptocurrency scams
These are kind of a cross between social media crypto scams and impersonation crypto scams. Victims are lured in with the promise of their money multiplying if they send someone a payment. For instance, a fake social media account is created in the name of a celebrity and they ask their followers to send them a certain amount of crypto and they will receive twice the amount they send. In reality, you will be sending the payment to scammers, which means you will not see your investment again.
Different cryptocurrencies now also have apps and these are often replicated by cybercriminals. More than 10,000 people have downloaded fake crypto apps. Once they have downloaded them, they begin sending payments to the scammers directly. Luckily, there are some red flags you can watch out for before you download the apps to ensure they are legitimate.