What are Crypto scams?
Crypto scams are similar to other types of financial scams, except that the scammers are seeking your crypto assets rather than your money.
Many of the same tactics used in other financial crimes are used by crypto scammers, such as pump-and-dump schemes that lure investors into purchasing an asset with false claims about its value or outright attempts to steal digital assets.
According to Shane Cummings, wealth adviser and director of technology and cybersecurity at Halbert Hargrove, the latter sort of scam might entail tapping into a person's crypto wallet or convincing an investor to transmit a digital asset as payment for a fraudulent transaction.
The purpose is usually to trick victims into disclosing personal information or transferring valuable digital assets to the perpetrator's account, such as non-fungible tokens (NFTs).
Types of Crypto scams
1️⃣ The classic giveaway scams
A formula is used in the most popular social media cryptocurrency fraud. Scammers imitate large businesses and/or celebrities in order to advertise giveaways that offer to double your money if you transfer bitcoin or other crypto assets into a specific wallet address. Of course, this is not the case, and once you transmit your bitcoin, it is gone forever.
Your first step should be to conduct a basic Google search for the giveaway. When Chipotle had a "Burrito or Bitcoin" giveaway, a simple Google search for "Chipotle crypto giveaway" yielded not just thousands of hits, but also dozens of articles from reputable sources such as USA Today, CoinDesk, and CNN. A recent hoax using the picture of Ethereum co-founder Vitalik Buterin, on the other hand, would have been easily spotted by searching for "Vitalik Buterin Crypto Giveaway." The results just mentioned the fraud and not the marketing.
You should then go to the official website to confirm the giveaway. When Chipotle, Coinbase, and Cash App held bitcoin giveaways, they all had official blog posts that were easy to find and included the giveaway's terms and conditions.
Finally, be certain that you are using the correct website. Cash App's website, for example, is cash.app, not cashapp.com. Scammers will use legitimate-looking addresses to construct phony pages in order to dupe unsuspecting victims with sophisticated and enticing websites.
2️⃣ Fake verified accounts
Another typical method used by con artists to steal cryptocurrency is to exploit social media sites' trust signals, such as blue checkmarks on Twitter. The issue is that scammers will either generate profile photographs with a blue checkmark or creatively use wallpaper to integrate a blue check in exactly the perfect position to appear real.
Another thing to be aware of is people that use Ethereum domains as part of their handles, which is something that many respectable (but not officially recognized) people use. For those who are unfamiliar, an Ethereum domain name is a method of creating a shortcut to reveal your identity on the Ethereum blockchain.
If a blue checkmark is genuine, hovering over it will reveal the following box:
In effect, the.ETH domain name has enabled users to perform semi-verification. However, this implies that more scammers will use.ETH names to pretend to be legitimate and deceive investors.
3️⃣ Twitter reply scams
As previously stated, hackers have a track record of effectively hacking into Twitter accounts to boost the impact of their schemes.
For example, a fraudster hacked the official check-marked account of Troy Stecher, a Detroit Red Wings hockey player, and converted it to seem like the "Saturday Night Live" Twitter feed.
To obtain additional visibility, hackers will utilize these verified identities to react to other high-profile accounts or popular tweets. The "reply strategy" in social media is effectively summarized by Mahbod Moghadam, founder of Rap Genius and Helladoge, as "no one reads your tweets, but they read your answers to famous people's tweets."
So, if you're reading the comments and see a giveaway or other get-rich-quick crypto campaign, it's almost certainly a fraud.
4️⃣ Fraudulent YouTube live videos
One popular cryptocurrency fraud on social media makes use of YouTube live streams. According to researcher Satang Narang, YouTube Live giveaways duped investors into $8.9 million in just one month.
A YouTube Live scam involves the perpetrators creating a live video (sometimes using stolen content), portraying themselves as some sort of cryptocurrency authority, and posting a link to a "giveaway" in the video's description, where you will be requested to donate bitcoin. The scammers bypass YouTube's content approval procedure by using the Live option until the video is done.
5️⃣ Crypto catfishing
Be wary of the new generation of catfishers and bogus accounts attempting to steal your cryptocurrency by sneaking into your direct conversations, or DMs. While real chances might arise via DMs, such as Busta Rhymes discovering his NFT designer through Twitter DMs, DMs are more frequently than not used to facilitate fraud. If someone DMs you a link and you don't know who they are, don't click on it unless you've done extensive research.
You must use extreme caution while dealing with cryptocurrency. In contrast to a credit card scam, where you can dispute transactions and get your money back, any amount you send to someone in cryptocurrency cannot be disputed to a higher authority. As a result, it is critical to conduct thorough research and exercise extreme caution.
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