Ever heard of rug pulls and pig butchering? Be smarter than the scammers and learn how common crypto scams work in detail.
The rise of cryptocurrency has also opened up more opportunities for bad actors to scam unsuspecting people using all the crypto loopholes. But thankfully with more information on hand, users are becoming more knowledgeable about the signs to look out for. It’s important you equip yourself with the right information so you can protect your assets. New types of crypto scams are cropping up every day and if you are not careful, you may end up falling prey to them.
The main categories of cryptocurrency scams are:
· Obtaining access to a person’s wallet.
These include scams where criminals gain access to the victim’s digital wallet. Scammers will try to get access to private information like security codes or private keys.
· Transferring cryptocurrency directly.
In these scams, criminals transfer cryptocurrency directly from their target’s wallet to their own wallet through impersonation and fake business opportunities.
Now that we have identified the types of crypto scams, let’s diver deeper into how to avoid them:
· Keep your financial info and private keys to yourself.
The first and most important rule of crypto is “Not your keys, not your wallet”. Even if you are a 100% certain you are interacting with a trusted party, never give up your private keys / seed words.
· Be cognizant of deals that may be too good to be true — “Get rich quick” scams.
If you are promised an investment that ‘guarantees’ exponential returns, it is likely to be a scam. Cryptocurrency can be a great way to diversify your investments, but no one can ever guarantee instant returns.
· Be wary of people who contact you out of the blue — phishing scams.
A scam that has existed since the advent of the Internet. Here the victim may be contacted by a seemingly reputable platform or one of its representatives with a goal to convince the user to click a link or provide their credentials in order to gain access to their accounts and funds.
· Triple-check URLs and domain names.
Check the website domain name or social media handle to ensure that you do not send money or information to someone falsely posing as a legitimate individual or business. Be sure to verify that there are no obvious misspellings, and if applicable, that they are a verified account.
As crypto evolves, scammers continue to as well. Remain vigilant, and use only secure, reputable platforms that employ strong security features, including multi-factor authentication and anti-phishing codes. Avoid investing in unknown platforms without doing your own research (DYOR), trusting your instinct, and remember the ‘too good to be true’ rule.