Before the start of the year 2017, Bitcoin was worth less than a thousand dollars. Back then, it wasn’t such a big deal. It was only when its price reached USD$13,000 by the end of the year that people took an interest in this asset. Naturally, individuals who invested in Bitcoin prior to the increase in price became millionaires or even billionaires after only a year.
With such a tempting premise, it was only natural for people to take an interest in crypto investments. However, while it’s relatively lucrative, being profitable isn’t as easy as many people think. One reason is that you’ll often encounter challenges every now and then, and one particular issue that’s rampant in the crypto industry is scams. Yes, just like any other lucrative industry, you’ll often find scammers looking to exploit you for your money.
If you’ve read up quite a few cryptocurrency guides, you’re most likely not going to fall into their schemes. But that doesn’t necessarily mean you’re 100% safe either. On that note, this guide will discuss six different ways to spot a crypto scam.
Public Domain Email Address
Perhaps the most common crypto investment scam is phishing. Phishing occurs when a scammer masquerades as a figure of authority from a certain company and then sends you an email or a message informing you of potential crypto investment.
The scary part about this is that their message is often compelling. It would contain a logo, a signature, and other details you’d typically receive from a legitimate company. However, there are things they cannot fake, like the domain, for example.
If you didn’t know, an organization would most likely use its own domain for its email address. For example, if the company is named ABC, the email should go like this: email@example.com and not firstname.lastname@example.org. If it’s the latter, then you can be sure that the email you just received is fake. So, make sure you report that email.
Suppose you fell for the previous scheme; the email would most likely contain a link to a website. When you click this link, it’ll take you to a website that contains all the elements you’d expect from a real company platform. Of course, those are all fake, and the scammer is probably looking forward to getting your banking details once you register for crypto investment.
Similar to the previous topic, there are things that you can’t fake on a website, particularly the security certificate. If you look at the top-left corner of the browser, there should be a lock icon.
If you click that icon, it must show the phrase ‘Connection is secure.’ Otherwise, that website is most likely fake. Furthermore, if the scammer used a website from an existing company, there’s a good chance the link contains a discrepancy, such as an extra letter or number in the URL.
Thus, make sure you double-check these things before entering any sort of information into the website.
Advice From Influencers
Scammers tend to use the popularity of influencers to persuade followers into investing in their imaginary assets. The scheme goes like this: the scammer convinces the influencer into investing in an asset. Of course, the influencer will most likely share their investment decisions on a social media platform. When that happens, their followers tend to follow suit.
Once that asset takes off, it would eventually reach the ears of other individuals that aren’t involved with the influencer, such as yourself. Since the asset is pretty popular, you’d assume that it’s legitimate and it’s worth investing in. That’s when you’d have made your mistake.
After a couple of weeks, you’ll find out that your investment went to a bogus cryptocurrency, and your money and the money of many other investors are already gone. This has happened numerous times before and still happening now. If you want to avoid this scam, your best bet is to do thorough research on the origins of the asset. If it turns out that it only became popular due to an influencer’s advice, then you’re better off steering away from that asset.
Low App Downloads
One way to invest in cryptocurrency is by using specialized software for desktops and applications for mobile devices. This is because it makes investing a lot easier and you can manage your investments through your phone. But as you may have guessed, there are fake apps that aim to steal your banking details. The good news is it’s relatively easy to spot this type of scam.
For starters, since the app is fake, there shouldn’t be that many people who’ve downloaded the app. So, one way to spot fake apps is to simply look at the number of downloads. If it’s too low, it’s most likely a fake app.
There’s also the possibility that scammers used a method to increase their downloads. If that’s the case, your next step is to check the reviews of the app. If there aren’t many reviews or if the reviews are repetitive, then it’s either because the downloads were from the scammers that didn’t bother to add their reviews or the reviews were made by bots. Either way, you should steer away from these apps.
Lastly, perhaps the most common sign that the other party is out to scam you is if they’re making incredibly unrealistic promises. For instance, they might be explaining that you can return your investment tenfold in a matter of months. If these are what you’re hearing, then there’s a high likelihood that it’s a scam. Remember that Bitcoin, which was the very first crypto, took a year to get from USD$1,000 to USD$10,000, so it’s highly unlikely for that to happen to a new cryptocurrency.
But it’d be a different story if their plan is actually reasonable and they’re willing to make a written agreement. After all, the crypto market is one of the most volatile markets out there, so the chances of your money returning tenfold isn’t zero.
Investing in crypto can be highly profitable, but of course, that would depend on your strategy. However, no matter how great your strategy is, it would all fall apart if you make the mistake of falling victim to a scam. That’s why, more than anything else, you must first ensure that you’re prepared for the possible schemes scammers may have against you.