Now that we’ve entered a new era of cryptocurrency as the digital monetary process, it doesn’t take long to understand and grasp the many threats associated with these transactions. We can’t only blame the crypto market’s volatility or unpredictability; online scams are rampant, and these exchanges and cryptocurrency trading sites are no exception.
Scams at Crypto
From its start, cryptocurrency has become a topic of debate. It has fuelled hundreds of rags-to-riches stories while still helping scam artists to make millions off the backs of innocent customers and investors.
Nathan Bloomberg, broker of The Investment Center platform, explains a few different scams and how to escape being a target when you start on the thrilling path of cryptocurrencies.
1. Pyramid or Ponzi Schemes
One of the most popular scams in the cryptocurrency industry is this. Keep away from cryptocurrency networks that inspire and convince investors to attract new investors to increase profits since this indicates the risk of a Ponzi scheme. You can verify the Ponzi scheme’s legitimacy by asking yourself, “Does it guarantee daily returns that surpass average market returns?” If it does then It’s a Ponzi scheme. Is it more concerned about attracting new employees than with selling products? It’s a pyramid scheme,’ says Nathan Bloomberg.
2. Fake ICO
Announcing a fake ICO is one of the most popular ways to pull off a con (initial coin offering). Scammers build marketing hype to get consumers to buy by promising large payouts and unrealistic gains.
You can stop Fake ICOs by conducting a thorough search, posing challenging and complex questions, assessing responsiveness and responses, updating a long-term roadmap, and evaluating the integrity of the issuer.
3. Malware
Hackers have long used malware to obtain passwords to gain access to computer networks or steal credit cards and bank account numbers. They’re now using it to carry out another of the most popular cryptocurrency scams. If you don’t protect yourself from malware and your crypto wallet is linked to the internet, they will use malware to access and drain your funds. By clicking on links in your account, you can download malware. It’s also available to browse from blogs and social media. Someone may say, for example, that a particular program helps you to mine bitcoins for free. You could get malware if you download it.
If you have any doubts about the authenticity of a website or email, contact the company directly. It’s a red flag if you can’t find the company’s contact address on social media or its website.
4. Too Good To Be True
Investing policies and payouts that guarantee 100 percent benefit should be avoided at all costs. Unfortunately, there isn’t anything in cryptocurrencies that guarantees this. BitKRK is a well-known example; in 2017, it positioned itself as legal and a part of actual markets, ensuring traders’ trades will be supervised. The same, however, was neither directed nor backed by the Korean Exchange, resulting in severe loss to the investors.
Conclusion
Scams are nothing new in any industry, but cryptocurrency is especially vulnerable due to its decentralization and open-source nature. Trading and making money with cryptocurrencies is exciting, but to keep this process pleasant and enjoyable, it is still advisable to do rigorous analysis until investing.
