The price of bitcoin exploded, hitting a record-breaking high of $69,000. Despite this, one of the most significant reasons for cryptocurrency losses continued to be fraud midway through the previous year.
The Federal Trade Commission noted the most significant loss ever brought on by fraudulent bitcoin scams. The stolen cryptographic asset had a value of $82 million, which is ten times greater than previously reported. The number of cryptocurrency frauds is at an all-time high; therefore, now is the time for traders and investors in the industry to become knowledgeable about the dangers they pose.
The well-known phony bitcoin scams listed below should be on your radar with advice on preventing them.
How to avoid bitcoin scams?
Even if bitcoin scams are on the rise, you can take forceful steps to ensure you never fall victim to one. Here are some strategies for avoiding bitcoin scams:
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Protect your digital wallet
You’ll need a digital wallet and the private keys to access it to invest in cryptocurrencies like Bitcoin and conduct transactions. If a website or business asks you to reveal your private keys, it is a scam, and you should stay as far out of it as you can. Under no circumstances should you share your digital wallet’s private keys with anyone.
Ignore cold emails
A “wonderful” cryptocurrency investment opportunity that seems too good to be true that someone calls you about out of the blue is probably just that. Never provide your personal information to strangers linked in emails or log into your digital wallet, as they are almost certainly scams.
Do your research
Make sure to complete your studies and resist the rush if a firm tries to persuade you to invest in a “limited-time” offer. Scammers have sometimes offered bonuses or deductions to entice investors to make a quick investment. Therefore, before spending any of your money, properly explore your options.
Avoid Google and social media advertising:
Scammers target cryptocurrency aficionados with adverts on social media and even Google searches. Bad actors targeted consumers in 2021 by purchasing Google ad space for bogus websites that resembled well-known bitcoin wallets. The thieves were successful in swiping over $500k worth of cryptocurrencies.
Keep an eye on your wallet app
Send a small amount to test the app’s legitimacy when sending money for the first time. Stop updating your wallet app and remove the app if you see odd behavior while doing so.
Protecting your company
It’s equally important to secure your company’s online existence to prevent cryptocurrency scammers from using it as a front to defraud customers or market fake goods. But, it can significantly influence your brand’s reputation negatively and potentially your revenue.
Also Read: 4 Best Cryptocurrencies for Short Selling in 2022
The Five Red Flags:
Scams using cryptocurrencies may result in a sharp increase in prices, returns, or fabricated assurances and pledges. Here are some warning alerts to look out for:
1. Sudden Spurt in Prices
Coins with no prior history of suddenly surging significantly in price can be a warning indicator. For instance, the Squid token, which took its cue from the well-liked Netflix series Squid Game, lost almost all of its value after it was made clear that it was an apparent hoax. The squid was only worth one cent and increased to approximately $2,856 in less than a week.
2. Unattainable Promises
When it comes to cryptocurrency investing, fancy claims of great investment returns with minimal risk are a big red flag. Fraudsters may use claims of huge returns to entice naive investors. While some cryptocurrencies have historically provided a high return, there is no guarantee of profits due to their volatility. The only people who should use cryptocurrencies are those ready to face the risk.
3. Requests for Validation Using Coins
Scammers occasionally advertise cryptocurrency giveaways while requesting a little payment from investors to validate their address or take advantage of an offer. No matter how tempting the offer seems, even if you are asked to send a little quantity of bitcoin, you shouldn’t accept it. Scammers typically employ the technique with several people and end up with a respectable number of coins.
4. Unstable Behavior on Social Media Accounts
To attract investments, scammers occasionally hijack the social media accounts of famous people, including politicians, actors, and athletes. Be wary of such false endorsements because they can be the work of an impostor. Always look into the sellers’ backgrounds.
Also Read: What is BAT? Basic Attention Token: Meaning
5. Aggressive Telegram or YouTube accounts
Accounts enthusiastically pushing a new coin on Telegram and YouTube are usually bogus. Fraudsters employ this strategy to lure investors with the promise of enormous money.
If you’re the prey of a scam, consider using a Bitcoin scam recovery service. They might be capable of recovering your funds. The best action method is to report the occurrence to the authorities and increase your caution level rather than shell out even more cash for Bitcoin scam recovery services.
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