Cryptocurrency fraud is very common. According to BBB [Better Business Bureau], fake job posts ranked first on scams followed by cryptocurrency frauds. More than 32%, of cryptocurrency scams, involved Bitcoin trading for fiat currency, goods, or services. 23% was because of digital asset purchases alleged to be investment opportunities.
Reasons people get scammed a lot while buying with bitcoin
The features of digital assets are responsible for cryptocurrency exchange scams.
- Digitized – Cryptocurrency is totally digitized, which needs internet access and computer to breach into wallets using tactics like pre-installed malware, backing, or phishing.
- Decentralized – Cryptocurrencies are unregulated and autonomous. Nobody wants to take responsibility for the scams that occur. Therefore the victim of scams can’t enter into legal fights.
- Irreversible – Transactions done using cryptocurrencies like ETH or BTC cannot be reversed. Scammers know there are zero risks of refund if any pays are done with digital money.
- Anonymous – To receive crypto there is no need to share personal data. Coins can be traced but the scammers, money launderers, or tax evaders create several wallets to mess up their trail.
- Volatility – Volatility is a challenge for cryptocurrency scams because the users desire to sell and buy as soon as they can.
- Complex – It is hard to understand how cryptocurrency works, so attract quick-rich scams. It opens opportunities for frauds like Ponzi schemes, fake trading platforms, or fake coins.
According to Graham Sutliff, a well-known Houston car accident lawyer, people need to learn to spot the dark side of cryptocurrencies.
How to spot cryptocurrency scams?
Cryptocurrency is used to bait people to download horrible software, which messes with your computer system. For example, there are fake bitcoin surveys used for malware app distribution. Therefore be cautious on social media URLs, which are generally not HTTPS secured or shortened.
On social media, cryptocurrency impersonators run rampantly. It is a strategy used to acquire your trust and credibility. The phishing site will offer appealing search services like asking users to insert their personal bitcoin key and find out if they have it in their database. As soon as you enter the confidential key, the scammer will spend the bitcoin directly from the victim’s wallet.
Cryptocurrency flipping scams
It is an instant cryptocurrency money-exchange offer after you pay a startup fee or a promise for doubling your investment within 24 hours. The moment they get the initial payment, the scammers vanish. Social media is the best platform for scammers to target thousands of innocent people.
In this unethical scheme, with low initial investment, you can multiply your funds by signing other members using a referral link. Soon, hundreds of victims join the scheme. Ultimately the main scammer walks away, making the pyramid collapse.
Solutions to decrease cryptocurrency scams
Cryptocurrency scam thrives on victim’s naiveté to get-rich-soon. It is a digital currency, so never assume to attain a lot of wealth quickly. The solutions to decrease cryptocurrency scams are more like a warning.
- Never trust anyone that claims they will help or offer you a chance to mine bitcoin. Cybercriminals value cryptocurrency because their wicked schemes associated with digital currency run wild online.
- Avoid clicking on URLs connected to social media profile ads, especially the ones displaying exaggerated bitcoin offer.
- While engaging on social media profiles of legal trading platforms or cryptocurrency brokers, be cautious. They are generally victims of influential impersonators.
- Never engage in direct financial transactions associated with cryptocurrencies through social channel messages.
Social media is a fertile ground for countless cryptocurrency frauds. Understand the shady side of digital currency, so you can spot scams and protect your wallet. Crime needs to be reported to Internet Crime Complaint Center without any expectation of seeing your digital currency return back.