Cryptocurrency scams are on the rise, and victims are losing millions of dollars. Here’s what you need to know about these scams and how to avoid them.
What are Cryptocurrency scams and how do they work?
Cryptocurrency scams are becoming more rampant, as criminals target victims with promises of high returns on investment. Often, these scams take the form of initial coin offerings (ICOs), in which investors are promised a new digital currency that will be worth more than the current market value. However, many of these ICOs are nothing more than fraud, and investors end up losing their money.
Another common type of cryptocurrency scam is the phishing scam. This type usually involves tricking victims into giving away their personal information, such as their email addresses or private keys. This scam can be very sophisticated, and even experienced users can be fooled.
Other cryptocurrency scams include Ponzi schemes, in which victims are promised high returns if they invest their money in a new digital currency. However, these schemes eventually collapse, leaving investors with worthless currency and no way to get their money back.
Still, other scams involve fake wallets, wherein victims are lured to download a wallet that will supposedly store their digital currency. However, these wallets are actually malware that will steal victims’ private keys and drain their accounts.
Who is at risk of being scammed?
Anybody (both old and new players) involved in the buying and selling of cryptocurrency is at risk of being scammed.
How can you avoid being scammed?
There are a few things you can do to avoid being scammed when it comes to cryptocurrency. First, be sure to only deal with reputable exchanges and wallets. There are many scams out there that will try to trick you into using their services. Only use exchanges and wallets that have been around for a while and have a good reputation.
Second, be careful of phishing scams. These scams try to trick you into giving them your personal information or your private keys. Be very careful of any emails, links, or messages that you receive that claim to be from a cryptocurrency exchange or wallet. If you’re not sure, always contact the company directly to verify the message before clicking on any links or giving away any information.
Finally, beware of fake ICOs. Many scammers will create fake ICOs in order to try to trick people into investing in them. Always do your research before investing in any ICO, and only invest in ones that have a good reputation.
By following these tips, you can help avoid being scammed when dealing with cryptocurrency.
What to do if you’ve been scammed
- If you think you’ve fallen victim to a cryptocurrency scam, please contact the CFTC at 866-366-2382 or submit a complaint online.
- You can also report cryptocurrency scams to the FTC, the IC3, and the U.S. Securities and Exchange Commission.
