A cryptocurrency scam is a fraudulent investment scheme that uses cryptocurrencies to lure investors into investing money.
A cryptocurrency scammer will typically try to convince you that they have found an amazing new way to make money online, or they will tell you that they have discovered some secret method of making money from cryptocurrency trading. They might even offer free training courses on how to become rich with cryptocurrencies.
If you’ve been targeted by one of these scammers, don’t worry: there are many ways in which you can avoid being taken advantage of.
Common Crypto Scammer Tactics
Crypto Scammers are everywhere, and they’re getting more sophisticated. If you’re new to the world of cryptocurrency and investing, it can be hard to tell the difference between legitimate projects and scams.
Here are some common tactics scammers use:
- Phishing: This is the most common type of scam, and it can be perpetrated in a variety of ways. The most common form involves an email or social media message that appears to come from an exchange or wallet service. If you click on the link provided in these messages, you will be taken to a fake site where you’re asked to enter your login credentials (which are then stolen). This can also happen when someone calls you out of the blue claiming they work for one of these companies and asking for personal information such as passwords or credit card numbers.
- Fake ICOs: An initial coin offering (ICO) is essentially crowdfunding for cryptocurrency projects–it’s how new coins get created and sold to investors who want them early on before they hit exchanges like Coinbase or Binance. But not all ICOs are legitimate; some are outright scams designed solely with stealing investor funds in mind.
- Pump And Dump Schemes: These involve buying up large amounts of cheap coins then spreading false rumors about those coins’ value so that people buy them at inflated prices before dumping their own holdings onto unsuspecting investors who think they’re getting a good deal but end up losing money instead.
- Ponzi Schemes: A Ponzi scheme is an investment fraud where returns come from money invested by later investors rather than profits earned through legitimate business activities — meaning there isn’t actually any real profit being made.
- Fake Exchanges: Some sites claim they allow users to trade cryptocurrencies but don’t actually have access to any real trading platforms; instead they simply steal your login credentials once again so that hackers can use them elsewhere without detection while still keeping control over your funds.
Signs of a Crypto Scam
- It’s Too Good to be True
If you’re offered a cryptocurrency that promises to pay you 10x more than the current rate, it’s a scam. If see an advertisement offering free money or instant riches, it’s probably a scam. If someone says they can make millions with no work and no risk, run! - No Website or Whitepaper
If someone is selling their own cryptocurrency but doesn’t have any information on their website or whitepaper (a document explaining what their coin does), then there’s something off about them–and probably about the coin itself too.
Tips to Avoid Crypto Scams
- Do your research.
- Check for reviews.
- Understand the risks.
- Ask for advice from people you trust, and don’t trust unsolicited offers of investment opportunities in cryptocurrencies or other digital assets without first doing your own due diligence on them (and even then, proceed with caution).
- Don’t give away personal information such as your Social Security number or bank account details over the phone or email unless you initiated contact with someone who knows you personally–and even then only if they can provide proof that they are who they say they are by providing an ID card or other documentation before asking for sensitive information like this!
- Avoid investing more than what can afford to lose; just because something is “free money” doesn’t mean it’s not still risky.
Be aware of the latest scams
The cryptocurrency market is still in its infancy, but it’s growing at an exponential rate. Because of this, we’ve seen a lot more scams and fraudulent activity than ever before.
If you’re interested in investing in cryptocurrencies or ICOs (initial coin offerings), it’s important to be aware of the latest scams so that you can protect yourself from them. The best way to do this is by staying up-to-date on news about crypto scams as well as taking steps like educating yourself about how to spot a scammer before they get their hands on your money.