The prevalence of fraud in the cryptocurrency market is one of the key reasons newbies may be wary of Bitcoin and Ethereum transactions. Although some cryptocurrency scams are easy to spot, others can be far more involved and tricky to prevent. Scams involving cryptocurrencies have grown in complexity and scale over the past several years. Criminals have worked hard to perfect their schemes to defraud unsuspecting bitcoin users. You must be careful and aware of how to choose a crypto broker and not fall for any scams. Here, we will go through some typical cryptocurrency scams and how to avoid them.
Investment Scams in Cryptocurrencies
There are numerous forms of cryptocurrency scams. Common examples include the following:
Fake websites
Scammers occasionally use fake cryptocurrency exchanges or forgeries of legitimate cryptocurrency wallets to defraud unwary victims. Domain names used by these spoof sites tend to be somewhat similar to the real ones they are trying to imitate. Their designs are so similar to real sites that it’s often hard to tell them apart.
Phishing scams
Crypto phishing attacks frequently target information about online wallets. Private keys to access a cryptocurrency wallet are a common target for scammers. To some extent, their operation mimics other phishing attempts, and their bogus websites are conceptually comparable to those already mentioned. They send emails to trick the recipients into visiting a malicious website where they can submit their private keys.
Fake apps
Scammers frequently use fraudulent apps distributed via the Apple App Store as well as the Google Play Store to scam cryptocurrency investors. While it is true that fraudulent apps are often exposed and removed fast, it does not mean they aren’t affecting businesses’ bottom lines.
Tips on How to Avoid Crypto Scams
Below are helpful tips to help you avoid being scammed:
1. Be cautious about who you put your trust in
The crypto space is full of untrustworthy sources of information and guidance; you must be careful and aware not to fall for any scams. Never trust the financial advice of a celebrity, someone you met on the internet or social media, or someone you do not know very well and who can’t provide evidence of their expertise.
2. Ensure that your cryptocurrency wallet is secure
If you want to buy something in the near future, you should only keep your virtual currency in a crypto wallet made by a reliable company with a good record of accomplishment.
Logging into your digital wallet while using a public network exposes you to the risk of someone else accessing your private information. Protecting your devices with passwords and turning on two-factor authentication are important steps to take to make sure that if someone steals your phone or computer, they can’t get to your money.
3. Make use of multi-factor authentication
You can rest assured that your cryptocurrency wallet or trading account is safe with multi-factor authentication, even if a thief manages to steal your login credentials. A verification code must first be issued to your phone or email before granting them access. They won’t allow it. In addition, if you get a code, you didn’t request; there’s a warning sign that someone is trying to hack into your account.
4. Consider acquiring exposure to cryptocurrency through traditional investments
Finally, if you do not want to lose money in a crypto fraud, you can protect yourself by purchasing stocks or ETFs of companies whose performance is correlated with the crypto market (such as tech companies). The authorities closely monitor these safer, more conventional investments.
Even though fraud is widespread in the cryptocurrency industry, following these guidelines should help keep your money safe.
