2 September, 2020
Cryptocurrencies are the new money, but they can be complicated to use, and it is also confusing to those who are new in the field and those that are not tech-savvy. Scammers use these issues to their advantage. If you are new to cryptocurrencies, you don't have to worry, as long as you know a bit about how it works and with common sense, you can protect yourself from scams.
You can learn about bitcoin scams online by researching or checking out Loan Advisor for more details. Here are some of the most common bitcoin scams and how to avoid them.
Phishing
Phishing is probably one of the most common scams out there, no matter what field you are in. Phishing is used to target a lot of customers from banks.
This scam happens when a customer receives an unsolicited email, and the email looks exactly like it is from a legit source, like your bank, or it looks like a wallet provider or crypto exchange provider. The email has links that will redirect you to a site that looks the same as the exchange site or wallet site that you use, but it is a fake site.
If you enter your personal and account details on the fake site, the scammers will be able to get all of your details, and they will have access to your real account, making it easy for them to steal your funds.
To avoid any phishing scams, check the URLs to see if you pulled up a real website. Do not click on suspicious links, especially if they are attached to an email. To protect your bitcoins, never give out your private key.
Fake wallets and exchanges
Just like phishing, you need to be mindful of fake exchanges for bitcoins. These exchanges may look legit, but they are only a front to fool consumers from their money.
Some exchanges will entice consumers with offers that are difficult to say not to. Other exchanges pressure consumers to make an account, even transfer or deposit funds, and even offer bonuses to those who share or deposit massive amounts. However, once the money is transferred or deposited into the platforms, the fees are so high, making it difficult to withdraw your funds again. Hence, the scammer stole your deposit.
So how do you avoid them? It is safer to stick to popular exchanges and the ones that you've already used before. Suppose you see any new wallet or exchange, research about them before you make an account. Do not feel pressured to transfer or deposit funds into new accounts and don't provide any personal information immediately.
Old-school
Cryptocurrencies may be new, but scammers can still use their old tricks to steal funds from consumers. Avoid emails or calls claiming to work for the ATO. These taxmen will say anything to convince you that you owe money and that you will be charged, and a case will be filed unless you transfer funds.
Another common scam is the "Nigerian prince" scam, and it has also been used in the cryptocurrency world. So if someone emails or calls you from overseas, saying that they will give you a massive sum of currency if you transfer funds for them out of their country, then it is a scam.
So how do you avoid these tried and tested scams? It is just a matter of common sense, especially if you are new to the world of cryptocurrency, no one should be able to call you and email you about offers. Do not engage in calls and emails that are unsolicited.
Bitcoin blackmail
This type of scam is the same as those scammers who pretend to work for the tax office, pressuring and threatening victims into giving in and transferring money. These scammers also sometimes pretend to hack your account to rattle you.
This is all a lie, though, as blackmailers do not really have any evidence, and also nothing will happen to you whether you make payment. It is all about pressure and intimidation, as they sound out numerous emails, they will scare enough consumers into transferring bitcoins to them.
How do you avoid this kind of blackmail? Check online to see if people also got the same email and went through the same thing. Remember that if you are new, you do not owe any balance or taxes just yet. Use VPNs to browse sites privately and for protection.
False giveaways
Another kind of scam that is very common to many massive sites and social media sites is the impersonation giveaway, allegedly done by celebrities. Scammers will impersonate a very famous star and announce a giveaway and that the winners will be determined depending on the cryptocurrency sent to them.
The impersonator will promise to double the cryptocurrency that you sent them, but that will never happen. Watch out for this scam on social media, especially on Twitter and YouTube, as they impersonate a celebrity or other prominent figure through a live stream or a video.
Impersonators rush the victims into thinking that they are missing out, so the victim will make a bad decision of transferring funds. The giveaway scam specifies the amount of cryptocurrency, and they use bots and accounts that are fake to make it seem like there are people who won their giveaway.
These fake accounts, fake videos, and fake statements become pretty convincing to some, that is why some people send their personal information and transfer funds. On Twitter, scammers usually have the blue verified checkmark, so a lot of people think it is legit, but in reality, it is not.
Scammers get the blue checkmark on the account by taking over those already verified and then changing it. Scams also have many shares and likes, but bots and not real users do them.
So how do you avoid this type of scam? Any celebrity that is offering a giveaway on social media that involves cryptocurrency is a scam. No celebrity has talked about using bitcoins so far, and even if they do, it should be posted on their own verified account and not a random verified account on Twitter.
Check the user name of the scam account and the comments, and compare it to the real account of the celebrity. Use a blockchain explorer to review the provided address for the cryptocurrency. In that way, you will see the amount of money that the scammer got and whether money is being transferred or not.
Conclusion
There are plenty of scams out there, so if you want to avoid being ripped off, then you will need to learn how to spot fraud and learn how to avoid it when possible. Fortunately, you can find resources on the internet that can help you avoid becoming a victim of such scams. Many of these resources also offer great advice for making sure that you are not scammed yourself. You should make sure that the information you use comes from a reliable source so that you can get some tips on how to spot fraud online without risking yourself. Don't give anyone your personal information, and make sure that you never give them any money to send to another person.
