Crypto Fraud Victims: How to Avoid Becoming One
Cryptocurrencies are a new and exciting way to invest, trade and transact online. They offer many benefits, such as decentralization, anonymity, security and innovation. However, they also come with many risks, such as volatility, hacking, scams and fraud. In this blog post, we will explore some of the common types of crypto fraud and how to avoid becoming a victim.
One of the most prevalent types of crypto fraud is phishing. Phishing is when someone tries to trick you into giving them your personal information, such as your password, private key or wallet address, by pretending to be someone else. For example, they may send you an email that looks like it came from your crypto exchange or wallet provider, asking you to verify your account or update your security settings. They may also create fake websites or apps that mimic the real ones, hoping that you will enter your credentials there. If you fall for these tricks, you may lose access to your funds or have them stolen by the fraudster.
Some examples of phishing attacks are:
- In 2018, hackers stole $5 million worth of Ethereum from users who visited a fake version of the MyEtherWallet website.
- In 2019, scammers sent emails to users of Binance, one of the largest crypto exchanges, claiming that they had won a lottery and asking them to send a small amount of crypto to claim their prize.
- In 2020, hackers hijacked the Twitter accounts of several prominent figures, such as Elon Musk, Barack Obama and Joe Biden, and posted messages asking their followers to send Bitcoin to a certain address in exchange for double the amount.
To avoid phishing, you should always check the sender’s email address, the website’s URL and the app’s developer before clicking on any links or downloading any files. You should also use a secure email provider and a reputable antivirus software to protect your device from malware. You should never share your password, private key or wallet address with anyone, and use a different password for each account. You should also enable two-factor authentication (2FA) on your accounts, which adds an extra layer of security by requiring a code from your phone or another device to log in.
Another common type of crypto fraud is fake giveaways or investment schemes. These are when someone promises you free or easy money in exchange for sending them some crypto or joining their platform. For example, they may claim that they are giving away a large amount of crypto to celebrate an event or promote their project. They may also claim that they have a secret trading strategy or a high-return investment opportunity that requires a small deposit to participate. They may use social media, online forums, chat groups or even impersonate celebrities or influencers to lure you in. However, once you send them your crypto, they will disappear with it and never deliver on their promises.
Some examples of fake giveaways or investment schemes are:
- In 2017, scammers created a fake website and social media accounts for Bitconnect, a supposed lending platform that promised users up to 40% monthly returns on their investments. They attracted thousands of investors who collectively lost over $2 billion when the platform shut down abruptly.
- In 2018, scammers posed as Elon Musk and offered to send 10 times the amount of Bitcoin that users sent to a certain address. They used bots and fake accounts to create fake interactions and make the offer seem legitimate.
- In 2019, scammers launched PlusToken, a purported wallet app that claimed to offer users high rewards for holding their crypto in the app. They amassed over $3 billion from millions of users before disappearing with their funds.
To avoid fake giveaways or investment schemes, you should always do your own research before sending anyone your crypto or joining any platform. You should verify the identity and reputation of the person or project behind the offer, and look for reviews, ratings and feedback from other users. You should also be wary of any offer that sounds too good to be true, such as guaranteed returns, no risk or no verification required. You should never send your crypto to an unknown address or a QR code without verifying it first. You should also avoid using unregulated or shady platforms that may not have proper security measures or customer support.
Crypto fraud is a serious threat that can cost you a lot of money and cause you a lot of stress. However, by following these tips and being vigilant and cautious online, you can reduce your chances of becoming a victim and enjoy the benefits of cryptocurrencies safely and securely.