Five ways you can be scammed using bitcoin and how to avoid them

Five ways you can be scammed using bitcoin and how to avoid them

Crypto scams and fraud pose a significant threat to the digital world, it is done with the help of advanced technology and is not always easy to stop. Understanding the behavioral patterns of fraudulent gangs is crucial for identifying, evading, and protecting investors from such malicious practices proactively. The most common target of these scammers is vulnerable young adults. This comes in the form of fake exchanges or simple social engineering tricks which are so far part of the threat posed to the industry by scammers and fraudsters and hence all transactions should be closely monitored.

Contrary to popular belief, both Bitcoin and the US Dollar, in the context of the new world monetary system signaled by the end of the Bretton Woods agreement in 1971, have no intrinsic value. Bitcoin works on a distributed platform i.e. blockchain technology for secure online transactions, as a result, the responsible investors in crypto assets do not leave their investments exposed to the hackers’ reach but rather keep them in what is referred to as cold wallets. Well, many other security measures could be taken to secure crypto business and there are many ways to get scammed in this industry, out of which we are discussing five scams and their protective measures.

Phishing and fake websites

Cryptocurrencies are often targeted by phishing attacks, which involve bogus emails or messages, fake websites, and fake login credentials. Users should be cautious when using browsers, especially with new sites, and confirm the URL of any site they plan to input their details. To avoid phishing scams, you should check the authenticity of requests for their details by contacting the concerned company using their formal stations. You can filter out known sites and their phishing by specialized browser extensions, additionally you should check the SSL certificates of financial websites before engaging in transactions involving cryptocurrencies, as they are necessary for encrypting data and allowing you to distinguish between genuine and fake websites. By taking preemptive measures and staying updated on cybersecurity trends in the crypto-currency trade, you can be less vulnerable to phishing attacks and protect your digital coins from being hacked or stolen.

Investment scams

Yes, investment scams can be especially dangerous because they rely on some of the most effective techniques that are intended to exploit such motivational factors as the desire of people to receive high profits with minimal risks. These are criminal scams that act upon the uncommon financial opportunity as a successful and attractive business venture. One common technique is the use of social media and the Internet and often fraudsters take advantage of the association of ordinary people with celebrities in the process. This means that one should always be on the lookout for such clues that are associated with investment scams. Avoid any of the following; promises of high revenue or profits, any program that promises high returns in short durations of time. To eliminate the risk of losing your money to such scammers, it is advised to study any investment proposal critically on your own. In order not to fall victim to scammers, opt for investment platforms that are legal and have proper licenses, as well as, platforms that have their proven returns.

Fake Giveaway scams

Giveaway scams are very common in the crypto market where fraudsters create a sense of FOMO (fear of missing out) by telling the potential victims that platforms or Influencers are giving out money for free. To gain a chance to win the promised money, a victim has to transfer a certain amount of cryptocurrency to a particular address. However, once the victim is forced to put the cash or digital currency across, then it never returns, to prevent such scams there are basic signs such as the social media platform or email telling you to get into it so that your balance will be doubled or tripled. However, the presence of easily recognizable images such as branding images or celebrities in a particular field also came as a source of distrust.

Man-in-the-Middle (MITM) attack

This attack involves the hacking of communication between an investor and an application and later using this information in the wrong way. Suggestions of MITM attack include new requests of verification for a transaction, a request for a further payment, or such things as delay or an error when performing regular transactions. Thus, to prevent themselves from becoming a victim of MITM threats, users should refrain from the use of public WI-FI when engaging in transactions that involve cryptocurrencies since these can be easily monitored and manipulated by hackers. It can also be more securely connected to a Virtual Private Network (VPN) to enhance the protection and guarantee the encryption particularly when accessing portfolios for managing cryptographic money or with exchange.

Fake crypto exchanges and wallets

Fake crypto exchanges and wallets are a common scam scheme used by fraudsters to deceive recipients. These scams involve the development of fake trading platforms and replicas of existing genuine crypto wallets, they often conduct name searches to resemble genuine domains, making it difficult for users to identify the fake domain. They also create fake exchanges or inflate trading volumes to lure new investors and steal their money, this manipulation can lead to abuse such as limiting withdrawals, charging high fees, or embezzling funds.

To avoid falling victim to these scams, it is essential to learn the features that can lead to these crimes, and look for platforms with a recent history of performance or recommendations from credible sources in the blockchain space. Avoid falling for 'free' platforms or incentives that go beyond reasonable broker fees.

To avoid falling victim to scams, look for testimonials and reviews from genuine community-based forums for the authenticity of the relevant scamming platform. Research the platform's background, including its creation date and its functional team. 

Conclusion

Staying informed about cryptocurrency trends and security measures is crucial for users to make informed decisions and protect investments. This proactive approach not only safeguards assets but also fosters a trustworthy community in the rapidly evolving digital landscape.

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