If there is money in it, there is a scam! No exceptions for cryptocurrencies. There was a cyber-attack on the crypto exchange, which lost approximately $ 320 million. The episode is just the tip of the iceberg. According to expert reports, investors have been scammed around $1 billion from 2021 to 2022.
Cryptocurrency is the digital currency stored in a digital wallet. Connecting it with a bank will help you turn it into fiat money. So cryptos are different from digital currencies such as bitcoin. Based on blockchain technology, it doesn’t require financial institutions, making it near impossible to recover from theft.
Yeah, crypto is all the new type of jazz, but scammers still rely on the old methods for Cryptocurrency scams.
Here are some new and common crypto scams, watch out, and watch out!
Rug pull scams
The scam is done by “Investment scammers,” who “pump up” the market price of a non-fungible token (NFT) or coin for funding. Once the scammers have the money, they are into thin air. The crypto code lets you purchase the coin, but you can’t sell it. So for an investor, it’s a valueless investment.
Do you remember the famous South Korean show Squid game? There was a recent Cryptocurrency Scam with the name “Squid coin.” The concept was that people buy tokens for online games, earn more while playing, and later exchange them for fiat currency. The price of the Squid token started at 1 cent and shot up to $90 by the end of the day.
Within 10 minutes, the trading stopped, and the money disappeared. The token’s value went below zero. People tried selling their tokens but failed. The scammers were able to make an approx. $3 million via these investors.
Phishing attacks are a very old scam but still very popular (IDK why!). Scammers send you an email with a fake website link, and you log in thinking its original and they have your data. Now they have the password to your crypto wallet.
These phishing scams come in different types, such as rug pull scams, bitcoin investment scams, phishing scams, romance scams, social media giveaways, man-in-the-middle attacks, fake exchanges, fraudulent employment, and Ponzi schemes.
In cryptocurrency, the concept of the password has been upgraded to a “unique private key” for digital wallets. Once stolen, you have to walk through hell to change the key. Each key is different. Every upgrade for a new wallet gives you a new key.
A simple way to avoid such a phishing scam is never to enter your information via an email link. Instead, get up and log in via the official website.
Have you ever logged in to your cryptocurrency account via public Wi-Fi? If yes, there is a good chance a scammer has your information, including cryptocurrency wallet keys, passwords, and account information.
You log in on a public Wi-Fi, and a hacker can siphon all your data using the “man-in-the-middle” attack approach. The hacker intercepts Wi-Fi signals of a trusted network after getting in close proximity.
You can avoid such attacks by blocking the middle man. Instead, use a Virtual Private Network (VPN). VPN uses data encryption on anything and everything transmitted and received. As a result, the hackers cannot access your personal information and steal cryptocurrency.
Social media cryptocurrency giveaway scams
Social media is the space where everyone wants to be or FOMO (Fear of missing out). Unfortunately, you are not the only one that loves it. Scammers and Cryptocurrency Scam love it more. “The giveaway scam,” hackers pose as influencers and celebrities promoting giveaways to trap users.
How does it work? Once you click on the link, you are redirected to a fake website asking for a “verification amount” or “personal details” to receive cryptocurrencies and prove your “legitimacy.”
Once paid, the scammer will disappear, but sometimes they don’t want you to track them back, so they send you a gift: a computer virus. Now they have your money and personal information. The Giveaway scam is popular for NFTs, a unique digital asset.
Employment opportunities and dishonest workers
Where there is money, there is creativity, new age, and new scammers. Impersonating recruiters or job seekers is trending to get access to cryptocurrency accounts. The scammers will offer you a job and training. For the training process, you will have to pay in crypto.
The scam is very famous for hiring remote workers. The best example of North Korean IT freelancers is that scammers target international citizens based on remote job opportunities, creating a fake company based in the U.S. As a result, the Department of the Treasury in the U.S. has issued a warning against the North Korean scam in accordance with cryptocurrency companies.
The IT freelancers try to find projects involving various virtual currencies, accessing the currency exchanges. After getting access, it becomes a walk in the park to hack and steal money and information for the DPRK Democratic People’s Republic of Korea. The hackers are skilled and try to discover new details for DPRK’s malicious cyber-attacks.
Also Read : How To Plan Your Investment Using SIP Calculator
Protecting your digital wallet from Cryptocurrency scams is your responsibility. You must take on digital security habits such as using a secured internet connection, strong passwords, choosing safe storage, and best get a VPN. Remember that there are two types of wallets: hardware and digital.
Digital wallets are on the internet and have greater chances of getting hacked. On the other hand, hardware wallets offline store cryptocurrency, personal information, and various keys.
Always remember that the Federal Deposit Insurance Corporation does not insure cryptocurrencies. So keeping it safe is your responsibility. DO NOT SHARE your wallet keys and code with anyone.