Cryptocurrencies are all the rage lately. As more and more people invest in them, the number of scams seems to increase. If you’re not careful, you could easily fall victim to one of these schemes. This blog post will discuss some of the most common cryptocurrency scams you must beware of.
Let’s take a look at these scams.
SIM Swapping Scams
The SIM swapping scam is one of the most prevalent online crypto scams. SIM swapping involves compromising the cell phone number associated with a particular cryptocurrency wallet. Once that number has been swapped, hackers can reset all of the security measures put in place for that wallet and take control of it.
The hacker then transfers funds out to his or her wallet, leaving you without your money. Crypto trading is not a difficult task; you have to open an account on the right platform and start trading and investing.
ICO Scams
ICO’s or “initial coin offerings” are crowdfunding events used by cryptocurrency start-ups to raise capital. There are dozens of ICO scams currently in the wild, more being developed every day. TokenLot, a cryptocurrency dealer, notes that most ICOs don’t have team members listed on their sites or any verifiable online presence.
Verify if the people behind any upcoming ICO offers are real people with respectable backgrounds; otherwise, someone could steal your money and leave you for broke.
Fake Apps
There are loads of scammy apps that offer free (and almost instantaneous) Bitcoin, Litecoin, and other forms of cryptocurrency. The safest place to store your currency is in either a paper wallet or hardware wallet, and you can even write down the private keys on a piece of paper if you don’t want to shell out the money for a hardware wallet.
Some apps claim they will hold your wallet for you, including the ability to send and receive transactions. These are complete scams. To understand why to imagine if someone contacted you about your bank account and offered to securely store it for you while still allowing you access to withdraw all of your money at any time.
DeFi Cryptocurrency Rug Pulls
The Decentralized Finance (DeFi) space has exploded over the past year, with many cryptocurrencies offering various financial services. When investing in this area, you should be wary of DeFi cryptocurrency rug pulls. Though not every DeFi token is a scam, most are absolute trash and will eventually plummet to zero. As always, do your research before investing any money into the unknown.
False Cryptocurrency-Based Job Offers
One common cryptocurrency scam involves fraudulently offering job positions requiring little to no experience and requesting the candidate send them all of their personal information upon hire. Another variant of this scam is when a company will claim that it wants to hire you for a fee — and provide an address and false contract information — and then demand payment once you arrive at the pre-arranged location.
The Bottom Line
It’s a bad idea to trust a random website or individual that offers to use their services or products instead of your own. In addition, if you’re going to rely on the word of someone else who claims they can be trusted because they’re “reputable,” then make sure to do your due diligence and research them deeply before entrusting them with anything.
