The value of the cryptocurrency market exceeds $1 billion. Markets and Markets’ analysis indicates that the market for cryptocurrencies will be worth approximately 1.6 billion dollars in 2021 and more than 2 billion by 2026. Many investors, entrepreneurs, and business owners are being drawn to the expanding market for cryptocurrencies like Bitcoin and Ethereum.
However, because the demand for cryptocurrencies can fluctuate wildly and because financial institutions like banks are unable to control how they operate, scammers can take advantage of this flaw to steal the hard-earned money of unwitting victims who are still unsure of all the specifics of the cryptocurrency they want to invest in.
And because of this way of thinking, many popular bitcoin scams could appear in your life as fake job offers, investment schemes, apps, etc. You’re curious about them now. Let’s talk about the seven most typical cryptocurrency scams, where a con artist will persuade you to engage in cryptocurrency-related payment activities before vanishing as soon as the money has been successfully received in their account.
Bitcoin Investment Schemes
Bitcoin investors are approached by con artists who pose as seasoned “investment managers” to solicit their money. As part of the con, the fictitious financial managers boast opulently about their success trading cryptocurrencies and tell their victims that their investments will be rewarded.
Before starting, the con artists demand payment. Then, instead of making money, the thieves just steal the upfront cash. The con artists may also request personal identity details under the pretext that they need them to transfer or deposit money to gain access to a person’s cryptocurrency.
Despite being around for a while, phishing techniques are still used often. To steal personal information, including the private key for a bitcoin wallet, scammers send emails with malicious links that take recipients to a fake website.
In contrast to passwords, users of digital wallets only get one distinct private key.
But it can be difficult to retrieve a lost private key. Each key is unique to a wallet, so to alter this key, a new wallet must be created.
Social media cryptocurrency giveaway scams
Social media platforms are inundated with false posts promoting bitcoin giveaways. Some of these scams also advertise the deal on the accounts of fake celebrities to lure consumers.
However, when a user clicks on the promotion, they are transferred to a fake website requesting verification to send them bitcoin. Making a payment as part of the verification process demonstrates the legitimacy of the account.
The victim runs the risk of losing this payment or, even worse, clicking on a malicious link that results in the theft of their data and bitcoin.
Rug pull scams
To lure investors, con artists “pump up” a new company, nonfungible token (NFT), or coin in rug pull schemes.
Once they get the money, the scam artists just disappear with it. The software behind these investments prevents anyone from selling bitcoin after purchasing it, rendering their investment worthless.
A typical form of this fraud is the Squid coin scam, which got its name from the popular Netflix comedy Squid Game.
Investors had to play to gain cryptocurrency: People would buy tokens for online games and then sell their extra earnings for other cryptocurrencies. The price of a Squid token climbed from one cent to approximately $90.
Trading eventually ceased, and the funds disappeared. As users tried to sell their tokens but were unsuccessful, the token value eventually fell to zero.
The con artists stole over $3 million from these investors. Rug pull fraud is also common with NFTs, which are special digital assets.
When a user logs into a bitcoin account from a public location, scammers can access their data.
Passwords, bitcoin wallet keys, and account information are just a few examples of the kinds of information that might be intercepted by scammers when transmitted over a public network.
A thief can obtain this private information whenever a user is logged in by employing a man-in-the-middle attack strategy.
The best defense against these attacks is to use a virtual private network to block the intermediary (VPN). All data being transmitted is encrypted via the VPN, preventing hackers from accessing personal data and stealing cryptocurrency.
Ponzi schemes provide payments to their elder investors from the profits of new investors. To lure new investors, cryptocurrency scammers will exploit bitcoin.
The technique is an ineffective way to make money because there are no safe investments. The main draw of a Ponzi scheme is the promise of tremendous wealth with no risk. However, these investments are never without risk, and no rewards can ever be assured.
Employment offers and fraudulent employees
Fraudsters will frequently pose as recruiters or job seekers to access bitcoin accounts. They pull off this ruse by offering a desirable job while requesting cryptocurrencies in exchange for work-related training. Other scams utilize remote workers.
By posting impressive resumes and claiming to be situated in the United States, North Korean IT freelancers, for instance, are looking to take advantage of remote job opportunities. The US Department of the Treasury was made aware of the North Korean scam that preys on cryptocurrency businesses.
These independent IT freelancers look for work involving virtual currency and make use of access to currency exchangers. To raise funds or steal information for the Democratic People’s Republic of Korea, they then hack into the systems (DPRK). These individuals also carry out other professional IT tasks and employ their insider access to enable hostile cyberattacks by the DPRK.
Practice excellent digital security habits like using strong passwords only secured connections or VPNs and selecting safe storage to defend digital wallets from scammers.
Because the Federal Deposit Insurance Corporation does not provide coverage for cryptocurrencies, maintaining their security is crucial. Never reveal access codes or wallet keys to anyone.