In cryptocurrency, scammers are also becoming active day by day. It has been observed that millions of crypto traders faced scams in recent years. Due to these cryptocurrency crimes, an annual loss of US $1.7 billion took place in 2018. Scammers use new technology to make traditional swindling tactics more workable.
Fraudsters will attract you whether you are using bitcoin trading or other cryptocurrencies. One of the most familiar techniques adopted by scammers is the tried-and-true Ponzi Scheme. In this scheme, scammers grab the income from beginners by dodging them as if they are paying returns to other investors.
However, some scamming techniques are sophisticated and automatic. Such automated crypto scams often collaborate with software interacting with award-winning internet messages and Telegrams. Some fraudsters are so skillful that they can manipulate coin prices in the market, even in legitimate crypto plans.
Every crypto investor desires to remain protected from all crypto scammers and fraudsters. The best way to manage your crypto trading activities check how you can verify a bitcoin address. Doing so will reduce your chances of getting in contact with scammers. Let’s look at how cryptocurrency scamming works to keep your cryptocurrencies protected.
Ways How Cryptocurrency Scams Work
Here are some ways how crypto scammers attract investors to steal their cryptocurrencies.
- Fast-Talking Fraudsters Attract Investors With Frequent Reward-Winning Tricks
The most typical way fraudsters scam is by attracting greedy people with regular promising rewards. For instance, entrepreneurs scam new investors with fraudulent plans without giving them reliable information about the strategy. If you are a newbie, never depend on those who claim to provide you with more than you deserve.
Mostly such schemes come under the iCenter category and work through message circulation on Telegram. Such groups are often made by a group of scammers who then invite the audience to chat via different social media forums and blogs. When a newbie enters their telegram chat, he thinks about investing in good plans.
When a trader is encouraged to invest, scammers tell them to make a network to earn more. That’s how investors themselves invest and attract others to win rewards and get scammed. Avoid all these random conversations to keep your cryptocurrency safe from scams.
- Exploiting Messages of Family and Friends
People often commit the most prominent mistake of having blind trust in family and friends. In this affair, traders often don’t realize that their relatives might be a victim of fraud. Instead of stopping them from investing, other traders also take risks to invest in the greed of getting huge rewards. That’s how sensible people get scammed.
For example, once a celebrity of India wrote a book “Cryptocurrency for Beginners.” Despite not knowing about cryptocurrency, he claimed himself to be a guru. Due to his popularity and fake claims, people started sharing his book. Because of his efforts, he earned $2 billion and $769 million.
If you observe one such case, refrain from expanding because you will get nothing in return. Avoid investing your valuable cryptocurrencies in fake plans just for the sake of celebrities, family, and friends.
- Fraud Offers of Getting Free Initial Coins
Another famous crypto scamming technique is offering free initial coins to traders. It brings a legitimate opportunity for all new investors. When you think about getting free cash in a startup, you will try to avail yourself of this chance of progressing in crypto trading.
But the fact is you should avoid all initial coin offerings of money raising. These all are just fake strategies of fraudsters to collect money. Never trust those who claim to give you discounts on new crypto coins in exchange for your bitcoins. Remember that 95% of initial coin offerings are organized scams under a fancy marketing strategy.
You might be aware of a massive flood of initial coin offering cryptocurrency fraud showcased on different media forums in 2017. However, this awareness coverage proved beneficial as it collapsed 1000 such fake offers, costing scammers a loss of $100 million worth. Moreover, more than 15% of cryptocurrency efforts result from plagiarized scams.
Undoubtedly, every investor is interested in cryptocurrencies and blockchain for profit-making. In crypto trading, avoid all the complex systems unfamiliar to you. Newbie crypto traders need to remain more cautious as they are more likely to fall prey to crypto scams. Make money through crypto trading but only with the use of reliable resources.