Elaine Jean Tech 11.10.2021 11:Nov AM EST

Crypto Scams: Here Are Common Types, and What You Can Do to Avoid Them

Cryptocurrency scams are extremely rampant nowadays and are all over social media platforms.

These scammers are attempting to mislead cryptocurrency enthusiasts into giving away their valuables by creating a bogus live event video.

Cryptocurrency scammers use YouTube, Twitter, and other social media sites to lure potential victims, from false freebies to bogus investment sites.

Cryptocurrency Scams

Twitter identified accounts that appeared to be linked to the Squid Game crypto coin that defrauded purchasers out of more than $2 million by taking advantage of the hit Netflix show's popularity.

Scammers are now using dating apps to promote their ploys as well.

Due to the nature of the decentralized system of cryptocurrency, a stolen cryptocurrency means it is simply gone.

Cryptocurrencies are decentralized, with code running on a blockchain ledger serving as the sole controller.

According to Constantine Cannon, pump and dump schemes, market manipulation, ponzi schemes, and broker fraud are one of the most common types of cryptocurrency scams.

With that, it is with utmost importance that users educate themselves on the types of cryptocurrency scams in the market to avoid the potential of becominv a victim.

Here are some ways to avoid scams in cryptocurrency:

Paying Attention To The Source

Scammers frequently steal photos to give their ploys credibility, making it difficult to spot a false tweet, ad, or video on social media.

They may even breach verified accounts to provide the appearance of authenticity by implying a well-known figure is involved.

Hackers broke into a few high-profile Twitter accounts in 2020 to promote a cryptocurrency scam that claimed to double the amount of Bitcoin delivered to a specific address. Several of the accounts belonged to Elon Musk, Jeff Bezos, Kim Kardashian, and Joe Biden, who was running for president of the United States at the time.

Before participating in anything that looks sketchy, users are encouraged to examine a website's name, a YouTube video's description, and a Twitter account's handle carefully.

Even a tiny misspelling, for example, could be a red flag.

Thorough Research In Cryptocurrency

Scammers may try to persuade people to invest by bringing up the subject while they are conversing on a dating app or just doing a casual scroll on social media.

Cryptocurrency scammers may inform users about a fresh cryptocurrency opportunity they've discovered, but it's all a hoax to get whoever to invest on a bogus website.

According to CNET, approximately 7,000 people have already reported losses totaling more than $80 million due to cryptocurrency investment schemes between October 2020 and March 2021 alone.

Unfortunately, there have been numerous reports of people donating more than $2 million in cryptocurrencies to Elon Musk impersonators in the last six months.

Scammers that guarantee users instant gain in money by making huge claims without providing an ample amount of information should be avoided.

Protecting Your Cryptocurrency

Guardrails designed to protect traditional internet finance can also be used to protect Bitcoin users from losing money if they fall for a scam.

For safety, it is recommended for users to use a strong password, enable two-factor verification, or create a distinct email address for your Bitcoin account.

Users can also keep their private keys in a physical device like a USB stick using a hardware wallet, often known as a cold wallet.

In addition, users can store cryptocurrencies in a number of different wallets to keep cash set aside for investment distinct from funds that will be used.