Common Cryptocurrency Scams & How to Stay Safe

Cryptocurrency Scams

Undeniably, Blockchain and Cryptocurrency world is growing rapidly and is attracting tech innovations, big crowds. Not only this, even bad guys seem interested in this new form of currency. As it is easy for them to steal the new digital money as opposed to fiat currency.

Don’t be surprise, Blockchain technology is indeed secure but a small code error or silly mistake can give hackers an easy access. To explain how this is possible, in this article we will try to shed some light on types of cryptocurrency scams and how to stay protected from them.

What are we waiting for let’s begin with types of Scam.

Types of Cryptocurrency Scams

Cryptocurrency an unregulated form of currency is on rise and so are the scams related to it. A moneyback with a digital lock, vulnerable to be hacked but people don’t realize the fact and become a victim.

Here, bring forward some common types of cryptocurrency scams:

1. Fake Initial Coin Offering (ICOs)

ICO is an unregulated means of raising funds for a new cryptocurrency venture, and it is one of the most common type of scams. A recent study shows 80% of ICOs conducted in 2017 were scams. Confido is one of the most popular scams detected in November 2017. This ICO raised $375,000 and soon after this it disappeared.

There was another ICO even bigger than Confido named Centra, $32M was raised from it and was supported by various celebrities. Centra too fall like Confido and its two founders were arrested in April 2018.

These examples clearly show ignorance of newbie investors who in hope of gaining 100x time profit fall for such scams.

Signs of fake ICO:

  • Copied whitepaper
  • No clear disclosure of the team
  • Hurry in execution
  • Discrepancy in what is said and written
  • Overlooking hard facts and questions
  • No roadmap

To stay safe from these scams on needs to keep the above-mentioned signs in mind and should remember nothing is 100% true and they should never trust a thing that looks too good to be true.

2. Social Media Frauds

With Facebook, Twitter, Telegram gaining popularity, number of social media scams are also rising. Hackers usually impersonate as a known personality of cryptocurrency world and offer giveaways, like “send 1 ETH to this address and receive X amount back”. This is a trick to lure you in because no one gives money for free even it is cryptocurrency.

Therefore, to stay protected you need to gain knowledge about scammers trick and try not to fall from them.

3. Replicated Websites

Generally, hackers copy legit websites to steal funds and personal information. Therefore, before falling for any crypto project, ICO or exchange you should cross check the URL and see if it is genuine. For this you can bookmark addressed of the legit site and can cross check. Replicated websites use similar letters in the URL to make it undetectable but if you take look you will see either an extra digit is added to it or an alphabet is either added or subtracted from the URL.

4. Ad Scams

Ads in present day are the most common way of performing phishing attacks. Recent examples include Google Ads to duplicate exchanges and Reddit ads to Trezor hardware wallet sale. To stay protected, one needs to double check the URLs and use chrome extensions to help avoid phishing sites.

5. DNS Hacks

DNS hacks take place when traffic of a legitimate site is redirected to a fake one by altering DNS records. The two most popular victims of DNS hack Etherdelta, and MyEtherWallet that made users lose a substantial number of cryptocurrency present in their wallet.

DNS hacks are tricky as they can redirect you to a fake site even when you are visiting the site using the bookmarked URL.

One way to avoid these hacks to verify that the site you are visiting is SSL secured and certified. If SSL certificate does not match or you receive an error message while verifying them exit the site, it can be a scam.

Also Read : Crypto Mining Is The Next Big Threat After Ransomware

6. Email Scams

Popularly known as phishing attacks are fake email sent to the victim to redirect the user to fake websites. Doing so hackers try to steal personal information or funds. These scams usually take place during ICO crowd sales. All personal data about the target is collected from the previous ICO sale.

7. Ambiguous Support Teams

Another form of phishing campaign is dubious support group. This means there are support groups who pretend to be helping you and to do so they you to give your personal information, deposits, or private key. Once they collect all this data scams take place.

8. Shady Exchanges and Apps

When we talk about any kind of money exchange be it fiat or digital one should always trust well known exchanges like Binance, Huobi, Coinbase and Gemini. Also, they should use legitimate apps downloaded from trusted sources.

9. Cloud Mining Scams

Cloud Mining has given another way to the hackers to easily conduct their fraudulent activities. A very popular case of this is MiningMax, a cloud-based mining service that asked people to invest $3,200 for daily ROIs and for $200 as referral commission this was definitely a scam and people were tricked that costs investors around $250 million.

10. Malware and Crypto Mining

Crypto malware comes in two forms, as a malicious software installed by the user, designed to steal and the second form is crypto mining malware. The one that secretly uses computer power to mine cryptocurrency.

Both these form of malware attacks aren’t easily recognizable therefore if you see an increase in CPU/GPU usage or fan speed increases it definitely is a sign that someone is using your computer power. Therefore, one needs to be extremely cautious while installing any software that is dealing with crypto trade. Pay attention to the browser extension and check its authenticates on the app store and its source.

Must Read : Google Play: A Host For Cryptocurrency Malware

All these scams clearly show how hackers are after any form of money and they won’t leave any stone unturned to get their hands on to your data or money. Therefore, one needs to pay attention to what he does, applications he installs, uses, websites he visits and more important fan speed, CPU/GPU usage. All this will help stay safe from cryptocurrency scams.

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