Cryptocurrency is changing how we deal with money, but its relative newness makes it easy for scammers to take advantage of those who are looking to invest. To avoid being scammed, it's important to know more about the tactics scammers can use so you can avoid them and protect yourself.
Scammers use phishing in many different types of scams, because it is the easiest for them to do. They simply set up an email that appears legitimate at first glance, change the displayed name on their email address, and send it out to millions of email addresses. This is a numbers game for scammers and all they need is a small percentage of people to use the links in their fake email and then, in turn, use their fake website to gain personal and financial data that can be used for fraud.
They can pose as a legitimate cryptocurrency exchange or wallet, so you must do your due diligence and research any offers that are sent to you via email. Never directly use a link within that email, as they can be altered to look like a link to a valid company - only to direct you to a fake site. Instead, search for the exchange within your own browser and follow links that you trust. Also, think about the potential risk if you decide to enter any financial information into a website.
Crypto runs on the theory that the more people who join, the higher the value it holds. Since crypto can expand exponentially, some scammers will use fake initial coin offerings (ISOs) or token sales. These will often be included into claims of big returns and quick results. However, most scammers will vanish once they have your money and leave you with worthless tokens. If you're looking to invest, ensure you research the project and its team. If you decide to invest, only invest what you can afford to lose.
While the term might seem old and outdated, Ponzi schemes are still a common scam used with cryptocurrency. These will promise a huge return on your investment, but these scams simply build on the money of the older investors and eventually it will collapse. If it sounds too good to be true - it probably is. Instead, focus on solid investments rather than get-rich-quick schemes.
The fact that apps and mobile phones are so common means they are also prime targets for scammers. Scammers can create what can appear to be legitimate currency data and feed those statistics into trusted mobile apps in order to convince you of a cryptocurrencies performance. These exploits mimic the behavior of valid crypto and can trick people into believing they are investing in a legitimate program.
The scammer is relying on you being the one to make the choice to invest so that it feels like your choice instead of a scammer forcing you to make an investment. Remember to always download apps from official sources like the Google Play Store or Apple App Store, read reviews and ratings before trusting any app with your money, and ensure the currency you have chosen to invest in has other sources that you can use to verify performance. As always, be wary when apps ask for excessive permissions or display suspicious behavior. If you see or experience anything suspicious, report any suspicious activity to the app store and relevant authorities.
The prevalence of social media and the ability for anyone to claim themselves an expert if they have a large following makes it easy for scammers to do the same thing. They can convince influencers to promote their cryptocurrency relying on the influencer to give it legitimacy. Some might truly believe in the project, but some might be paid to endorse something they don't understand. Always do your own research and don't blindly trust influencers.
While cryptocurrency can be exciting, it's important to stay alert to avoid scams. By being cautious, doing your homework, and trusting only reliable sources, you can enjoy the benefits of cryptocurrency without falling for scams.