The value and acceptance of cryptocurrencies continue to rise. It has become a global topic among financial enthusiasts, particularly as many view it as the future of money. However, several negative indices continue to rise alongside cryptocurrencies.
As more people enthusiastically adopt this new financial scheme, scammers and hackers are also trying to play their cunning games. They compromise people’s data and steal from unsuspecting individuals. Therefore, you must act intelligently when in the crypto sphere,” advised Ponzi Scheme law attorney Scott Silver of Securities Fraud Attorneys.
To help you stay ahead of scammers and hackers, this article explores their typical methods of operation and how to avoid them:
The Use of Look-Alike Crypto Websites
Today, Binance and Coinbase have become the signature crypto exchanges among users. These exchanges get the highest volume of trading in the digital money market. Hence, many ordinarily believe that these platforms are safe to trade on.
However, several look-alike websites continue to spring up daily. So, if you fail to double-check, you may find yourself visiting a website you never intended to visit. These look-alike exchanges have a malicious intent of stealing your data and hard-earned money.
To stay ahead of this scam, always look out for the small lock icon close to the URL bar when browsing on an exchange. The icon represents security. Its absence means you should avoid the website.
Similarly, there are subtle differences between the original exchanges and their malicious look-alikes. That is why you should consciously double-check the URL of the site you want to visit before clicking on it. For instance, most phishing sites do not have the “HTTP//” protocol and usually replace the letter “o” with the number “0”.
It is advisable to bookmark your exchange and avoid clicking on external links before logging in. When you act proactively, it becomes difficult to fall into the snare of hackers and scammers.
The Use of Multilevel Marketing or Ponzi Schemes
The high-profit potential of cryptos has led to the emergence of several multilevel marketing schemes. They offer innocent and unsuspicious investors mouthwatering “returns.” They pretend to help you achieve your long-term financial goals within the short term.
These investment scammers lure people into sending a given coin for a promised large payout in the near future. Instead of keeping their promise, they introduced a pyramid scheme funding model, where you have to recruit more people and invest before receiving your payout.
The entire network relies on the people who continue to join. Unfortunately, only the old investors or those at the top of the hierarchy benefit from the profit. The fraudsters, or “investment promoters,” disappear when there are no more recruits.
They will stop answering your calls or send a message that they are “upgrading” their site. Site maintenance may never come to an end until you give up on the entire project.
Therefore, it is safe to conclude that any investment platform offering you an unbelievable ROI within a short time is trying to play on your intelligence. When it sounds too good to be true, it means it is definitely false!
The Use of Cloud Mining Schemes
If you don’t want to buy or exchange a new coin, you only have to depend on mining and staking to obtain one. However, mining is costly due to several factors, including electricity and the cost of rigs.
Some firms have taken advantage of this process by offering interested users the “opportunity” to rent mining power from their non-existent facilities. These companies operate like Ponzi Schemes by transferring funds from one user to another until payment abruptly stops and they become unreachable.
Many investors usually lose massive funds due to this fraud. Thus, it is always advisable to avoid companies that promise top-notch mining facilities without a proven track record.
The Use of Fake Cryptocurrencies
Every day, the “next big thing” after Bitcoin and Ethereum emerges in the cryptocurrency sphere, but it usually disappears within a blink. Many of these fake cryptocurrencies receive well-oiled media attention and then disappear into oblivion after the promoters have scammed their victims.
These fraudsters often lead users to believe that it is already too late to profit from established or well-known cryptocurrencies. Instead of concentrating your effort on Bitcoin, they advise that you focus on these new cryptocurrencies. When they get your buy-in, the scamming begins.
These projects look legitimate on the surface, but when you dig deep, you will notice the can of worms. The whitepaper they present is always high-sounding but valueless. Their alleged teammates are non-existent.
While it is understandable that you want to take advantage of new cryptocurrencies and grow with them, always look before leaping. Research the company thoroughly before staking your hard-earned funds with them.
The Use of Malware Applications
Scammers also use fake applications available for download to trick their victims. They usually adopt the impostor syndrome and promise high sales of cryptocurrencies. Once you download these apps and enter your details, they steal your credit card details and withdraw your money.
This malware can also use your computer processing power to mine cryptocurrencies without your knowledge. You will only discover reduced efficiency of your computer system while someone is using your power to mine crypto. These scammers also have a way of draining your crypto wallet data.
You need to be extremely careful when surfing the internet because you can unknowingly click on a malicious link to download malware. Beware of those who send you links claiming you will receive free cryptocurrencies when you click on them. When you fall for it, you lose unimaginably.
Concluding Remarks
The world of cryptocurrency is still evolving. The potential for investors is limitless. However, you must tread carefully, as hackers and scammers have infiltrated the ecosystem.
Scammers and fraudsters are often innovative in their exploitative means. They try as much as possible to stay ahead of the curve. However, they ultimately feed on the greed of unsuspecting users.
The cryptocurrency sphere is naturally volatile and risky. Therefore, you must always play safe and legitimately. When an offer sounds odd, too sweet, or unbelievable, run away from it before you bite your fingers.