Following the booming popularity of cryptocurrency in recent years, the rate of scams and frauds also increases. Scammers are always inventing new tricks and ways to fool people and drain their accounts. According to a report by crypto firm analysis, the highest crypto scams of $14 billion were recorded in 2021. So, learning about what are the common crypto scams and how to avoid them is very important for all level investors or traders. In this article, we will take you through a complete guide of common crypto frauds and how to avoid crypto scams.
What are the Common Crypto Scams and How to Avoid them?
1- Phishing or Fake Websites
One of the oldest tricks of fraudsters to steal money from crypto is phishing, involving the creation of fake websites of official crypto websites. Furthermore, they get access to your password and keys or send you emails to enter your information, leading them to steal your cryptocurrency in wallets.
How to avoid them
- Never tap on or open the unknown emails and messages
- Always double check the URL of the platform you are using before entering any information
- Use two-factor authentication to avoid scams
2- Giveaway Scams
Sammers usually offer you special giveaways on your cryptocurrency in exchange for your private account information.
How to avoid crypto scams like these
- Check the giveaway announcement of platform’s official page
- Verify the resources sharing the information
- Always remember that the reliable and trusted platforms never ask for your money and account details first
3- Investment and Ponzi Scams
Fraudsters promote fake websites and promise high profits on your money. Additionally they usually use the new investors money to pay the earlier investors.
How to avoid crypto scams like these
- Keep in mind that no platform guarantees you high returns
- Always choose the secure and reputed platforms
- Do two-factor authentication before any investment
Other Common scams include:
- Rull Pulls
- Fake Apps
- Fake ICOs
- Cloud Mining
- Pump and Dump schemes
- Fake endorsements from influencers or celebrities
- Impersonation Scams
It is very crucial to understand this and learn about how to avoid the crypto scams, no matter if you are a beginner or a seasonal trader. Moreover, always check the identity or people approaching you related to crypto and never share your private account information with anyone. Besides, you can use hardware wallet apps to keep large investments secure.
