Cryptocurrency Scams: How to Keep Your Profit Safe?

By Audrey Davis

Cryptocurrency fraud is a problem that currently worries traders and investors. This payment tool is very promising, so it is interesting for thousands of people. But creating e-wallets for Bitcoin, Litecoin, or other coins, people take a risk of losing money. To prevent disappointment, investors should not only be particularly meticulous but also understand the psychology of fraudsters. We will tell you about the most common methods of deception.

Common Causes of Frustration — How to Prevent Loses?

Withdrawing funds from e-wallets through fraud is a popular way of making money for different scammers who force people to send coins to specified details. Because of this, investments in ICO projects are not as high as we would like, which significantly constrains the dynamics of the market. Even if you follow the recommendations of an experienced expert, you can fall for the trick of ill-wishers. So, special meticulousness will not be superfluous when people invest in any startup. This applies not only to cryptocurrency projects.

Spamming

Most crypto scams are associated with sending spam emails and false posts on Twitter, Facebook, and other platforms. People often fall for such a deception, especially when you consider that scammers lure with large profits. Often, such mailing is associated with attempts at blackmail, network redirection schemes, or fake investments. Ill-wishers are good at preparing for their scams and understand the psychology of a beginner who would like to profit from cryptocurrencies. Thus, not all novice traders and investors get what they want.

Ill-wishers offer unrealistic profits, but inexperienced investors swallow such bait. In most cases, the scammer asks people to send money or pay with Bitcoin or other cryptocurrencies for a service not provided. This also applies to rare and branded products. Supposedly sellers are asking for an advance payment. Some gullible people who do not understand the consequences do this. Due to the specificity of the cryptocurrency, there is usually no way to return the funds. So if you see a tweet (or text, email, or other social media message) that asks you to pay in BTC, be careful as it could be a scam.

Fake Exchanges

In 2017, the Seoul police exposed one of the most famous fake exchanges. We’re talking about the BitKRX platform. This project was named after the KoreanKRX, although the site was fraudulent. Such examples show the global nature of this problem. There are dozens of such sites in almost every country. Cryptocurrency projects are not yet properly regulated. This means that almost anyone can create a fraudulent scheme.

To avoid becoming a victim of this scam, novice investors should carefully check the information about projects, especially those that offer high profitability. Each of us must understand that no investment can be guaranteed. Any market is volatile and people can lose their funds at the moment. Any guarantees are fraudulent. Therefore, even if you want to exchange funds through the new platform, start by reading the reviews. Never make large transactions through such sites.

Financial Pyramide & Bitcoin

In 2019, the US police arrested a criminal group that ran the BitClub. This platform has lured people with promises of huge returns to invest in Bitcoin mining. It was a financial pyramid scam. The ill-wishers manipulated and paid people from new employees. The Internet is a fertile ground for such scams. Therefore, when considering options for investing in various startups, beginners should take into account the opinions of experts and the reputation of other beneficiaries.

Always beware of platforms presented as assured high returns. Such profit is hardly possible without risk. This is a classic scenario that is too good to be true. Be especially meticulous so as not to lose your investment in cryptocurrency. Only those who check the information several times get real, not virtual, profit.

Counterfeit Currencies

There are thousands of crypto coins. We are talking about BTC, ETH, USDT, and other analogs. The dynamics of the increase in the number of projects over the past decade changed but the popularity of the main cryptocurrency has remained the same. With opinions like OMG, LTC, and Dogecoin pegged to legitimate projects, investors are unlikely to be disappointed. But sometimes it is difficult for a novice trader to resist the temptation to try a new platform. 

In 2019, the US government arrested My Big Coin owners. This company’s managers said the coins they sell are gold-backed currency. But this turned out to be a lie. In addition, blockchain technology has not always been used for this platform. This means that the data was not tracked for all transactions. There are many websites based on such fraudulent schemes. Although it would be fair to say that not every country has a legal basis to fight this.

Fake Websites

If, when displaying a website, there is no lock icon in the browser address bar and “https” is not displayed in the site address, then this should alert you. Even if such sites are no different in design from the original cryptocurrency platforms, such resources are fraudulent. Mobile applications, of which there are hundreds today, can also be fake. Thousands of users make this mistake and download files, spreading a virus program.

To understand if investing in a currency is worthwhile, they should start by examining the team. It is worth paying attention to the reliability of other projects. Only after experienced traders are convinced of the objectivity of the information and the real prospect of profit, they order the first transaction. If you’re unsure or don’t want to spend time researching you haven’t heard of, invest in BTC or ETH. 

Summary

As soon as people start using the new payment tool known as cryptocurrencies, they realize that such transactions involve risk. Of course, it is true. Therefore, when considering options for investing in startups and companies related to cryptocurrencies, experts recommend checking the information several times. It looks like paranoia, but it will definitely prevent disappointment. Even if the email you received looks absolutely similar to the one from a legitimate cryptocurrency company, think twice about whether the investment is worth it.

About the Author

Audrey Davis creates qualitative and informative articles. She combines analytical mind and creativity to make sure that her audience will receive maximum of information with interesting content. She works for the ICOholder company and believes that research, adaptability and stay current are the ways to become a great writer.

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