Tips and Tricks to Identify Crypto Scammers?

Key points

  • Increase in Number of Crypto Scams
  • Imposter Scams
  • Clone Websites
  • Romance Scams

“Congratulations you have won a million dollar award in our lucky draw”, it is a type of message that everyone has received at least once in his life. Everyone knows it to be a hoax and never takes the message seriously, but some do.

In the case of cryptocurrency; spotting scammers can be even more difficult due to the complexity of the technology, if precautions are not taken.

Increase in Number of Crypto Scams     

With the increase in popularity of crypto, it has become a new target for scammers, to make quick profit by exploiting individuals who are new to this currency or will do anything to be rich.

False promises are made by scammers and users may fall victim to these promises. The scammers use the anonymity feature of the internet to their full advantage. Most of the victims of scammers are people who are new to the market or are unfamiliar with cryptocurrency. For such users, distinguishing between fraud and real life can be very difficult.

Therefore, it is very essential to first understand cryptocurrency and how the market works. A user should also be able to identify cryptocurrency scams and any crypto accounts that are compromised.

Some most common scams related to crypto, and how to identify them are discussed below:

Imposter Scams

In this scam the imposter usually impersonates government officials, corporations or as some famous personality. At present the reported losses in cryptocurrency are around 15%. Most of these frauds are executed by using fiat cash. But this is expected to change in the future, as the crypto industry will grow, frauds are also expected to rise.

As per reports provided by FTC, since 2020, the cases of crypto frauds have grown considerably, with over 7000 consumers claiming to lose about $80 million.

Imposter scams are generally associated with giveaway scams, in which the imposter offers to double the investment. There have been cases, where several users have sent money to an imposter’s wallet, impersonating some famous personality.

The best method through which an imposter can be identified is through the deal being offered to you, if the offer is too good to be true then it is a red flag, and you should investigate, before investing.

Clone Websites

Another common trick that is used by scammers is utilization of Bogus websites. Individuals are roped in by scammers into fake websites by providing them opportunities to invest in or mining cryptocurrency. The websites are often well designed and look completely legitimate, deceiving individuals into making transactions without any hesitation.

These websites also have fake testimonies and cryptocurrency jargons to make the website look legitimate. These websites have various investment tiers, higher the investment, higher are returns. Website gives its investors an impression that their money is increasing, and when the investor tries to withdraw his profits, he will be asked to invest more.

Such websites can be identified by checking the lock sign in the URL bar, if the lock sign is missing; it’s an indication that the website is not secure. Another thing to look out for is the redirect link on the website, it may look legitimate at first glance but after examining closely, the URL will reveal that the number “0” has been used instead of the letter “o”.

It is essential that before clicking on such links one should double check the URL.

Romance Scams

In this scam the scammers exploit online dating to draw people into investing in crypto investment scams. Dating apps and social media are used by scammers to contact its victims. A genuine relationship is started on the online platform and after gaining complete trust of the victim, he is offered an investment scheme. When the investment is small the victim is given huge profits and is also allowed to withdraw these profits so that he can be lured into investing a higher amount.

This online relationship lasts for as long as the funds are being transferred from the victim. Whenever the victim tries to withdraw his funds, he is provided with various excuses of why this couldn’t be done right now and is asked to invest more.

To prevent being a victim of this scam, it is advisable to not send money or invest on the advice of someone you have met over the internet. It is also advised that you should never discuss your personal details and your financial situation with strangers.

When dealing with cryptocurrency it is essential to be very cautious and if something is looking fishy don’t invest in it.

Disclaimer: The article is just to provide information and shouldn’t be considered as any financial advice. It is advisable to conduct thorough research before investing in any cryptocurrency.

Photo by –  Sammy-Sander on Pixabay