{"id":59780,"date":"2023-11-16T10:40:13","date_gmt":"2023-11-16T02:40:13","guid":{"rendered":"https:\/\/www.imoney.my\/articles\/?p=59780"},"modified":"2023-11-15T19:40:42","modified_gmt":"2023-11-15T11:40:42","slug":"spotting-addressing-crypto-scams","status":"publish","type":"post","link":"https:\/\/www.imoney.my\/articles\/spotting-addressing-crypto-scams","title":{"rendered":"Spotting Crypto Scams And How To Avoid Them"},"content":{"rendered":"
Since the creation of <\/span>Bitcoin<\/span><\/a> in 2009, cryptocurrencies have slowly gained traction among investors, culminating in a <\/span>massive boom<\/span><\/a> in the last few years. Cryptocurrencies such as Bitcoin and Ethereum climbed so high in value that every investor and their mother wanted a piece. All that hype has definitely died down by a lot in the current year, but this doesn\u2019t mean that cryptocurrency is dead. <\/span>Crypto still remains a fairly popular<\/span><\/a>, if not very risky opportunity.<\/span><\/p>\n Unfortunately, this does mean that crypto scams are still a dime a dozen. The more money something makes, the more enticing it becomes for criminals to take advantage of, and crypto is no different. As the cryptocurrency market evolves, so do the strategies of scammers. In this article, we will explore some of these scams so that you will be well-equipped to spot a fraud from a mile away.<\/span><\/p>\n Phishing is a fairly common tactic utilised by scammers. This essentially involves scammers creating fake and fraudulent websites, or sending deceptive emails that pretend to be legitimate cryptocurrency exchanges or wallet providers. These fake sites or emails will often ask for personal information, investors\u2019 private keys, passwords, and other sensitive information. Be wary as they can be quite persistent and convincing as well. A few ways to avoid phishing scams can include:<\/span><\/p>\n Named after the infamous conman Charles Ponzi, Ponzi schemes are a nefarious way for scammers to get your money. They work by promising investors significant returns on their investments with little or no risk.\u00a0<\/span><\/p>\n However, the money they use to pay back earlier investors is usually taken from new investors, creating the illusion of a profitable venture. Using investors\u2019 money to pay investors works, until you run out of new investors.\u00a0<\/span><\/p>\n As such, Ponzi schemes are doomed to collapse due to how volatile the investment market can be. Spotting a Ponzi scheme can be quite tricky, but it is not impossible. In order to decrease your chances of being caught in one, you should do the following:<\/span><\/p>\n Ponzi schemes are also known as pyramid schemes.<\/span><\/p>\n Initial coin offerings (ICOs) is a type of funding using cryptocurrencies, where companies or individuals attempt to build capital through the sale of a new cryptocurrency to investors. Scammers sometimes take advantage of this form of funding by creating fraudulent cryptocurrency projects and tokens.\u00a0<\/span><\/p>\n They will often market these projects as groundbreaking opportunities with the hopes of drawing in as many investors as possible to purchase tokens that are worthless, non-existent, or unlikely to rise in value. Once they have collected a significant amount of funds, the scammers disappear. The infamous and memeable <\/span>Bitconnect<\/span><\/a> is a perfect example of an ICO scam.<\/span><\/p>\n Just like the Ponzi schemes mentioned previously, your best course of action to avoid ICO scams is thorough research into the background of the project, verifying the legitimacy of the ICO via reputable sources, and exercising extreme caution around projects that offer high returns for low risk. If you are not sure how to research these ICOs, you could try the following:<\/span><\/p>\n A fraudulent ICO is also sometimes known as a \u201crug pull\u201d.<\/span><\/p>\n Pump and dump schemes attempt to manipulate the value and prices of cryptocurrency through misinformation, coordinated buying activities, or straight up lies. Scammers will attempt to artificially inflate prices to catch the attention of unsuspecting investors. Once it seems like the price will hit its peak, these scammers will sell off all their holdings and make off with the profit, likely causing the value of the cryptocurrency to crash while doing so.<\/span><\/p>\n You should try to avoid getting caught up in any type of hype regarding cryptocurrencies, especially those that are being promoted via social media. As usual, some thorough research can also help you to spot fishy news or rumours surrounding cryptocurrencies that have rapidly increased in price. Also be cautious of any cryptocurrency that experiences drastic, unexplained price increases.<\/span><\/p>\n It\u2019s not always easy to spot a pump and dump scheme because cryptocurrencies are already so volatile. Which is why you should always take extra care before buying anything.<\/span><\/p>\n Originating from the term \u201chijacking\u201d, cryptojacking operates similarly. It is a type of scam that involves the secret hijacking of a victim\u2019s computer or device by cybercriminals in order to mine cryptocurrencies without knowledge or consent. It essentially works by injecting a virus or malicious code into websites or applications, giving attackers an avenue to infect and utilise a victim\u2019s computer resources for mining purposes.<\/span><\/p>\n In order to avoid getting hit by this malicious software, you should probably invest in a reputable antivirus and anti-malware program. You should also keep your computer and web browser up to date with the latest security measures and protocols. Also, be wary of websites or applications that consume excessive CPU power, as this could be a sign of cryptojacking.<\/span><\/p>\n In some cases the cryptojacking miner isn\u2019t hidden in a website, but in advertisements that are then uploaded to networks. This allows the malware to access huge numbers of victims with very little detection.<\/span><\/p>\n Ransomware attacks involve scammers getting into your devices or computers and encrypting important files and data. This means that the victims will not be able to access their own data. The scammers will then ask for a ransom to release these files. Said ransoms can usually be paid in Bitcoin or other forms of cryptocurrency.\u00a0<\/span><\/p>\n<\/span>Types of crypto scams<\/b><\/span><\/h2>\n
<\/span>Phishing<\/b><\/span><\/h3>\n
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<\/span>Ponzi Schemes<\/b><\/span><\/h3>\n
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<\/span>Fraudulent ICOs<\/b><\/span><\/h3>\n
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<\/span>Pump and dump schemes<\/b><\/span><\/h3>\n
<\/span>Cryptojacking<\/b><\/span><\/h3>\n
<\/span>Ransomware<\/b><\/span><\/h3>\n