A cryptocurrency scam is an online fraud that can take many different forms. They target many different types of cryptocurrency and investors who may not know much about investing.
Cryptocurrency scams are becoming more and more common as the popularity of Bitcoin, Ethereum and other cryptocurrencies continues to grow. With every new currency introduced to the market, another scam is already being hatched to take advantage of it.
Various cryptocurrency scams already exist, including social engineering, romance, imposter and giveaway, phishing, blackmail and extortion.
And now, new crypto-based opportunities (ICOs and NFTs), DeFi rug pulls, and cloud mining scams have emerged.
How to avoid cryptocurrency scams?
According to the trusted browser extension, Guardio, the best way to avoid cryptocurrency scams is to be aware of them and know how to spot them.
Below, we will detail each type of scam so you can be more informed and avoid them.
Social engineering scams
Social engineering is a scam where the perpetrator uses deception, manipulation or intimidation to get the victim to do what they want.
Social engineering scams are becoming more common in the cryptocurrency space as scammers try to take advantage of people who are new to the space and may not be aware of how these scams work.
Romance scams are social engineering scams where the perpetrator uses a fake online dating profile to trick the victim into sending them money.
These scams are increasingly common as scammers try to take advantage of people looking for love online.
The imposter and giveaway scams
Imposter scams are a type of scam where the perpetrator pretends to be someone else, usually someone famous or trusted, to trick the victim into sending them money.
Giveaway scams are a type of scam where the perpetrator promises to give away free cash or cryptocurrency if the victim sends them a small amount of cryptocurrency first.
These scams have recently gained momentum as scammers try to take advantage of people new to the cryptocurrency space.
Phishing is a scam where the perpetrator sends the victim an email or message that looks like it is from a trusted source but is actually from the scammer.
The email or message will usually contain a link that takes the victim to a fake website that looks like the real thing but is designed to steal the victim’s personal information or login credentials. Knowing how to spot a fake website can help.
Phishing scams have been taking advantage of online users for years, and they’ve recently begun to work at scamming the cryptocurrency market.
Blackmail and extortion scams
Blackmail and extortion scams are a type of scam where the perpetrator threatens to release embarrassing or damaging information about the victim unless the victim pays them a ransom.
If you don’t have anything to hide, this scam may not affect you, but if you got up to something naughty in the past, your first instinct is to pay whatever amount they are requesting.
New crypto-based opportunities, ICOs and NFTs, DeFi rug pulls and cloud mining scams
Many new crypto-based opportunities have arisen in recent years, such as Initial Coin Offerings (ICOs), non-fungible tokens (NFTs) and decentralized finance (DeFi) projects.
These new opportunities have already begun to be targeted by scammers.
DeFi rug pulls are a scam where the perpetrator promises to give away free money or cryptocurrency if the victim first sends them a small amount of cryptocurrency.
Cloud mining scams are a type of scam where the perpetrator promises to pay the victim for allowing them to mine cryptocurrency on their computer.
These scams are becoming more common as scammers try to target new investors and use their lack of knowledge against them.
What can you do if you have been a victim of a cryptocurrency scam?
If you have been a victim of a cryptocurrency scam, you can do a few things.
- You should contact your local law enforcement and file a report.
- Contact the platform or exchange where the scam took place and let them know what happened.
- Reach out to a professional organization specialising in helping victims of cryptocurrency scams.
With the future of cryptocurrency growing, the amount of scammers looking to take advantage grows with it.
Today, we looked at the different types of scams that target cryptocurrency and covered the new crypto-based opportunities that scammers plan to attack. Hopefully, that helped you make sense of these new financial opportunities.
As always, be aware and be protected!