Ever since Bitcoin was introduced in 2009, the cryptocurrency industry remained steady and even kept on growing. But the truth can’t be denied. There are so many ways to lose your money in cryptocurrency trading. The volatility of the market is one factor even in Forex Trading while fraudulent and scam activities are another. Because of the lack of regulations surrounding the decentralization of the crypto market, more and more scammers are taking advantage of this immense popularity. The only weapon you have to fight against these ruthless criminals is to become more knowledgeable than they are.
You won’t become a victim of a scam if you know the kinds of cryptocurrency scam which may prey on you. Here are the types of scams that are quite rampant nowadays.
The most common type of scam that we have nowadays is called Phishing scams. They have been widespread all over the Internet and even in the cryptocurrency industry. With this type of scamming activity, people behind it try to impersonate a cryptocurrency exchange so investors and traders will be tricked to give their personal information such as their log in details. The attacker tends to fish your private information such as your password through fake sources such as emails, social media platforms, websites, or through the telephone.
In phishing scams, scammers will give you messages containing clickable links that will take you to an external link where you will be prompted to enter your personal information. As this is only a duplicate site, the attacker will be able to access your credentials as well as your cryptocurrency account.
To avoid phishing scams, make sure that the URL and the logo of the website are authentic and don’t raise red flags. Nowadays, there is anti-phishing software that you can install. It will block suspicious and malicious websites that might take advantage of you.
Another rampant cryptocurrency scam is called the Ponzi schemes. They generally promise to provide a huge return on investment to people. There are no underlying structures in Ponzi schemes. They simply promise abnormally high returns to their victims and a get-rich-quick scheme. This type of investment scheme uses funds from old investors to pay for new ones. This style goes on until the owner of the Ponzi scheme runs off, leaving behind all his victims.
To avoid becoming a victim of these Ponzi schemes, you should not believe in promises of very high returns. Also, avoid sending cryptocurrencies to an unknown or random address. There is no such thing as easy money, even in Forex trading.
Fake wallets, mobile apps, and cryptocurrency exchanges
Just to victimize other people and get easy access to their cryptocurrencies, there are now a lot of fake cryptocurrency wallets and mobile apps that mimic the real ones. These things are developed merely to scam cryptocurrency users.
To avoid becoming a victim of these frauds, you must be able to identify the fake website from the real ones. Also, be wary of promotional offers and bonuses that are too good to be true. Before any transactions, you may want to check the reviews left by previous clients first before entrusting them with your money.