Cryptocurrencies are profitable, but they are also complicated. If you are new to it, you will likely find the whole process confusing. This confusion, coupled with light regulation makes cryptocurrencies an ideal target for fraudsters. A huge list of cryptocurrency fraud has occurred, here are some of the most remarkable examples:
Contrary to what major crypto investors have said about the security of the cryptocurrency platform, cryptocurrency is less protected than other traditional securities markets. With that in mind, let’s consider some of the most popular cryptocurrency mobile frauds. They include:
Now, let's examine each of these scams and how to avoid them.
Phishing is a classic scam that is used in different sectors and not just cryptocurrency. It is a scam that has been used to target folks from different walks of life, including banks.
The website will almost always request vital personal information like your account details. Once this information is obtained, the fraudsters can gain access to your account and disappear into thin air with all your funds.
In lieu of this, some crypto platforms have been able to add some software so as to identify this theft. In a release by Marketwire, CEO of Wirex, Pavel MATTHEW said:
“We have entered a new age in which conventional regulated financial frameworks and the new token economy must coexist. By uniting the existing and future financial ecosystem, Wirex occupies a unique position in the industry – we believe it is our duty to deliver innovation and choice to our customers whilst ensuring the security of their money and data. We are delighted to work with Elliptic and contribute to creating a safer environment for all.”
Other ways to avoid this phishing theft are listed below.
Fake wallets are verily similar to phishing scams. These wallets come to crypto owners, posing as legitimate exchanges or wallets. However, they are far from legitimate and only aim to defraud owners from their money.
These wallets come promoting ludicrously profitable offers. Some are subtle, while others come out boldly, urging you to deposit funds into an account. To further convince you, they usually offer bonuses for large deposits. However, once you fall into the trap of depositing money into an account, the jaws close and your money disappears. Other subtle fraudsters create mobile wallets that, once downloaded, can steal critical account information. Some are so good that they even exist in official app stores.
How to avoid fake wallets:
Ponzi scheme is a simple tool used by fraudsters. Despite the simplicity (or perhaps because of the simplicity), it is effective. This fraud is especially effective when used for those who seek an extra investment profit after their actual profit. It appeals to investors, promising unusually high returns on investments.
The promoter persuades people to invest in the scheme. At first, these initial investors might receive high returns, but these returns are from new investors. On seeing gains, the investors pump in more money until the scheme becomes unsustainable. At this point, the fraudsters would have disappeared with as much money as possible.
How to avoid Ponzi schemes:
Since the emergence of cryptocurrency, every investor has been on the lookout for the next cryptocurrency. Early adopters of Bitcoin can testify to the profits raked in as a result of the massive explosion in the price.
How to avoid fraudulent dishonest ICOs:
How to avoid malware:
Cryptocurrency can be a rewarding investment despite the dishonest people that seek to use different methods to swindle you out of your money. Use the information in this post to keep your information and your funds safe.