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December 26, 2022

Crypto scams to look out for and how to avoid them

Cryptocurrency has been on the rise thanks to the benefits it brings its users. Although it is regarded as one of the most secure and reliable forms of payment, there still are scams to be wary of. There are third parties that are taking advantage of unknowing players, especially those who are quite new to the crypto world. 

According to the Federal Trade Commission, there has been a sum of $1 billion stolen by crypto scammers since 2021. These thieves use various schemes to lure unsuspecting users into fraudulent crypto investments. They will go to lengths just to make a profit at the end of the day.

Thankfully, there are tons of ways you can avoid these. Becoming knowledgeable of the crypto scams and how to avoid them, can assure a smooth sailing Bitcasino slots experience. Here is what you need to know:

What are crypto scams?

Crypto scams are similar to transactional scams. In this case, scammers are out to get your digital assets instead of your cash or money. They will employ different schemes and tactics to get you to invest in their assets with fake claims. In some cases, third parties will break into a person’s crypto wallet by sending a digital asset as a form of payment. 

Different types of crypto scams you should avoid

With crypto becoming the new trend, thieves have diverted their attention towards it. While there have been newer methods, some scammers are still able to use older methods. To protect yourself, here are popular crypto scams to be wary of:

Investment schemes

One of the most popular methods many scammers use is an investment scheme. As a part of the scheme, these people will market themselves as investment managers. Many have made a quick buck with this method. To become even more successful with this, these scammers will involve fake celebrity endorsements and market the asset as a great financial investment. 

Once a person starts requesting personal identification information, claiming it's for transferring or depositing funds, be wary of them. This is a part of the scammer’s tactic to gain your trust and access to your cryptocurrency.

Rug pull scams

Another tactic is the rug pull scams which involve creating and pumping out a new project to get funding. These typically involve non-fungible tokens (NFT). There are tons of instances that this has happened, but one of the larger scaled ones involves the Squid Coin (SQUID). Named after the popular South Korean Netflix series Squid Game, players had to play to earn the coin. It was popular as its worth dramatically increased in just a short period. 

Unfortunately, at one point the coin’s trading was put to a halt and all the money involved was nowhere to be found. Making a total of $3 million from its players, people were unable to sell the token and lost their money to a scam.

Upgrade scams

Cryptocurrency platforms require constant updates to their systems. This has become an opening for scammers. They often use this chance to trick crypto users into giving up their private keys so they can properly update and upgrade their systems. This is most evident now as more people have become familiar with upgrading in this age.

Upgrade scammers often capitalise on legal migrations, like the recent Ethereum merger, which both the Ethereum Foundation and Robinhood expressed concern over and advised users to be on high alert for. In this case, users were told by scammers that they should send in their crypto assets to be able to upgrade to the new Ethereum blockchain. They were promised to receive funds in return.

Romance scams

Crypto scams are not only done through transactional ways. Romance scams, also known as pig butchering scams, are another form that takes place on dating apps. This usually happens to couples who are in long-distance relationships that are purely online. These scammers play the long con. Once the time is right in the relationship, the scammer will convince the other to buy or give money in the form of crypto. They will eventually leave with the money.


Pump and dump schemes

This specific method uses social media to its advantage. Scammers will hype up a coin or token through popular platforms such as Twitter or Facebook. This will entice traders to buy the coin. Sequentially, this will drive the coin’s value. Once they reach a certain threshold they have set on the value, the scammers will sell their holdings. This will cause a crash which will lower the asset’s value to zero.

Man-in-the-middle attack

Scammers go above and beyond just to get a hold of your information. With the use of technology, they can intercept and gather your personal information that is all over different public networks your devices connect to. Always be wary when logging in to a public location. You may risk your private keys and passwords. A hacker can obtain this private information whenever a user is logged in by employing a man-in-the-middle attack strategy. To play it safe, do not log in through public Wi-Fi connection, especially if it is seemingly suspicious. 

Fake crypto trading apps

Another thing to be wary of is crypto trading apps. Although there may be great ones, scammers create fake ones to steal your assets. Reliable crypto trading apps will appear on legitimate platforms. A giveaway that the app is fake is if it asks you to download it from a website. One way to avoid these types of scams is by checking the reviews of the app. This will give you an idea if they are ok for use.

Giveaway scams

To get a hold of your crypto, scammers will do giveaway scams. They will claim to match or even multiply your assets by tons. This opportunity they open to you can entice users to immediately lend their assets expecting an immediate return. These scammers will often use convincing social media accounts to persuade you further.

Cloud mining scams

There are a bunch of cloud mining companies that are out to scam users. Before considering acquiring their services, keep in mind that many have been scammed through this method of mining. Users have earned less than promised and even lost money in the process.

Cloud mining refers to a company that shares revenue from mining for a fixed pay. Many are interested in this type of service as it allows them to remotely mine without the big expenses needed for mining hardware.

Employment offers and fraudulent employees

Another effective method for scammers is by impersonating recruiters to get easy access to a user’s account. They will offer jobs that will force users to pay in crypto for their job training. 

One of the biggest examples involves North Korean IT freelancers that were able to scam many American crypto users by claiming to be based in the country. They hired a bunch of remote workers and asked them to pay in crypto. The American government later found out and warned every IT freelancer.

Government impersonations

Finally, scammers can resort to impersonating a government body. They will pretend that you are involved in a legal problem, claiming that your account will be frozen to investigate the problem. The scammers will then convince you to buy crypto as the only means to solve the problem.

Don’t be fooled. They will do whatever it takes to convince you. Scammers will even call you to help you resolve your issue by providing a list of instructions that will ultimately have you giving them your crypto at the end.

How to avoid cryptocurrency scams

With different types of scams that are happening, there are also a bunch of ways to combat and avoid them. Here are some ways to do so:

  1. Scammers will only demand payment in crypto. No digital asset will require you to send in your crypto early. 
  2. If a company is guaranteeing you big returns for so little, these are often scams. People who often market quick and easy money are easily scammers in hiding. 
  3. As mentioned, if you are a crypto user, you can never be too safe dating. Be wary when a person from a dating app is forcing you to invest in crypto
  4. Always check before clicking on links from unfamiliar senders. This is one of the proper ways of safeguarding your information as well as your assets.
  5. Keep accounts separate. Don’t link crypto brokerage accounts and traditional bank accounts permanently.
  6. The HTTPS on a site’s web address is a great indicator that it is secured and encrypted. Be wary of just the HTTP.

Keep your crypto investments secure

Now that you are equipped with knowledge of the different types of crypto scams you may encounter, you can invest in crypto easily without fears of getting scammed. Stay vigilant all the time so that your digital assets will stay safe and sound. 

You can also try different ways to earn them, one of them is by playing games on platforms such as the Bitcasino live casino. By playing with a Bitcasino bonus, you can win bigger and better prizes and grow your crypto portfolio. 


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