In recent years cryptocurrency has shown its potential to be accepted as another financial instrument. Though it is not a legal tender, some are pushing towards it, while some have also accepted it as a legal tender. As a result, the popularity of crypto is reaching sky-high, and so have the cryptocurrency scams.
Cryptocurrency is supposed to replace fiat currencies like the dollar, yen, euro, etc. The creation of cryptocurrency was to aid in a free borderless money transaction. It is not centralized, in other words, there is no regulatory authority overseeing the transaction within or outside the borders. However, the transactions are encrypted and open to others; thus, the transaction can be traced if the law enforcement agencies wish to check for the illegal transactions.
However, the cryptocurrency craze has raged and engulfed the entire globe. Add to the fact that the world entered into a lockdown due to the pandemic; many lost their livelihood. Where the stock market failed to sustain the economy, cryptocurrency seemed like a viable option to trade. Thus the adoption rate of the cryptocurrency increased by many folds.
People already trading in cryptocurrencies have the knowledge and seek frequent updates regarding cryptocurrency. However, people who did not know about cryptocurrency also joined the bandwagon. Most managed to invest in genuine exchanges by chance. Some newcomers also had studied before entering the crypto market and did not face any problems. But many fell victim to the fraudulent activities or scams.
Even at the time of writing, many are considering jumping into the cryptocurrency market without any knowledge as the world has yet to recover from the pandemic era. Then there is ongoing tension as the Russian invasion of Ukraine further damages the painfully slow recovery of the world economy. There is ever-increasing inflation that is hurting the people the most.
Most cryptocurrency investors are hedging inflation by investing in cryptocurrency.
So if you are new and are considering trying your luck with cryptocurrency, here is everything that you need to know about how to avoid cryptocurrency scams.
Con artists are constantly finding innovative ways to steal your money under the guise of cryptocurrency. Anyone who also demands payment through wire transfer, gift card, or even cryptocurrency should raise a red flag. So if you happen to pay them through these methods, you are bound to lose your money for good. And this is the loophole that con artists exploit.
Investment and business opportunity scams
- Some companies claim that you can earn a huge amount in a short period, thereby making you financially independent.
- Some con artists will assure you that the more you pay in cryptocurrency for recruiting others, the more you will be rewarded in cryptocurrency. They guarantee the more you pay in cryptocurrency, the more they pay in cryptocurrency. They keep promising, but you end up getting swindled and get nothing in return.
- Some con artists will make unsolicited offers of investment schemes, impersonate an “investment manager,” encouraging you to open up an account with them, ensuring to make your cryptocurrency grow. This is nothing but a scam; once you have invested and try to login to the supposed “investment account,” you cannot withdraw without paying huge fees.
- Some scammers send unsolicited job offers. These jobs expect you to help them with recruitment of cryptocurrency investors, sell cryptocurrency, mine cryptocurrency, or convert cash to cryptocurrency.
- Some con artists will go as far as posting fake jobs on job portals. They will promise a job for a fee, but all they do is scam you by taking your money and stealing your personal information.
Read Also: What to Look for in Crypto Projects in 2022
There are signs everywhere that will help you avoid such companies and individuals who are likely to be involved in scams.
- You’ll make guaranteed money: The only ones making money would be them and not you. Avoid it at all costs, even if it’s been endorsed by a celebrity. They could be fake advertising.
- Big payout with guaranteed returns: It is not possible for anyone to guarantee quick returns.
- Free money promised: Even if they promise in cash or cryptocurrency, it is fake.
- Making big claims without explaining details: Smart business people would always like to understand where they invest and how the business model works. A good investment advisor will always share this information.
There are other ways to contact you and squeeze money out of you.
Con artists will often contact you through email, suggesting that they have come across some embarrassing or compromising photos, videos, or personal information, which they will make public unless you pay them in cryptocurrency.
The social media network
If you read a tweet, text, email, or get a social media message telling you to send cryptocurrencies, avoid it. It’s a scam. The message might come from a family member, friend, or even a celebrity you are following; chances are that their account got compromised.
It is always advisable to do a background check. If you come across any such sites or emails, you can report them to a regulatory authority and take help from recovery agencies in retrieving your money. And if you have fallen for a cryptocurrency scam, provide them with all the details.