4.307% ROI, guaranteed !!! (and other crypto scams to avoid)
The following is a guest article by Josef Moser, Cryptoradar co-founder.
Crypto scams are getting more and more sophisticated. As more retail investors board the crypto train, it’s no surprise that malicious actors are trying to take advantage of new traders and insecure crypto accounts.
If you are new to the crypto scene, it is essential that you pay attention to all the gimmicks and traps. But even seasoned investors should always pay close attention to some of the newer and more sophisticated scams that are now starting to circulate.
The rise of guest post phishing
Articles written by guest contributors, like this one, are a great way for industry experts to share their ideas with a wider audience. If you need more proof, consider the e-Krona scam.
Sweden was planning to introduce a digital version of its currency called e-Krona, but someone got ahead of it by launching a fraudulent version of the coin before the government even had a chance.
Whoever created this project managed to get an article on a well-known corporate website before the Swedish government revealed that it had nothing to do with the fraudulent e-Krona coin.
The website was not registered by the Swedish government but by a private entity in Reykjavik, Iceland. e-Kronas was also sold through a scam website that mimics financial advice to make the scam more reliable.
Unfortunately, the article had already been advertised on Facebook before being removed by the publication. As a result, people were tricked into believing that they could buy e-Krona – but only through an “official” website and only by transferring money directly to the site’s e-Krona brokers.
If this is not a red flag, the e-Krona site claims that every € 1 of investment will potentially be worth € 4,307 in “a few months”. Despite the fact that no one on the internet publicly offers an offer suggesting a return on investment of over 4000%, there are still people who fall for this scam. So much so that the central bank of Sweden stepped in to directly address the problem.
Social media – a perpetual source of disinformation
Crypto scams on Twitter have been common for years, despite the platform’s best attempts to regulate scammers. Someone will create an account, get a blue verification badge, and then change the account name and information to look like a famous person.
There have been Barack Obama crypto scams, Bill Gates crypto scams, and of course Elon Musk crypto scams, and they generally follow the same format. The famous person will announce that in order to kick start the widespread use of cryptocurrencies or “give back to the community” they will return double any amount of crypto sent to them – usually within about 30 minutes.
This scam has become so widespread that the Federal Trade Commission issued a statement indicating that consumers lost around $ 80 million to cryptocurrency investment scams from October 2020 through May 2021 alone. As interest in cryptocurrency increased during this time, so did the possibilities of scams – with an increase of more than ten times year over year, resulting in an average loss of 1 $ 900 per consumer.
Famous for his defense of digital currencies, Elon Musk’s impersonators seem to have had the most success, getting around $ 2 million from crypto-hopefuls.
The bottom line? No one on the internet is ever going to give you free money (especially not a celebrity), so try to use common sense. If it sounds too good to be true, it probably is.
When they ‘caught’ you doing something online
Scams, where you are accused of being caught red-handed, are a classic form of blackmail. More often than not, the scammer will claim something like, “We have your browser history and we know what explicit content you have viewed. We’ve accessed your webcam and have a video you sure don’t want the world to see. Pay us $ 1,500 in BTC, because we’ll get you off the hook. Here is our wallet address.
The best strategy is to simply ignore these emails. If you’re unsure whether an email is a hoax, it’s important to remember to never click on any included links. Clicking on a hyperlink can give hackers the ability to install malware on your computer, allowing them to spy through your webcam and microphone, or launch a ransomware attack. A common ransomware attack involves encrypting your computer and asking you to pay a fee for decryption, for example.
You can further protect yourself against ransomware attacks by taking daily backups. If you are the victim of an unfortunate ransomware attack, with a backup you can eliminate the ransomware through a factory reset and a clean installation of the operating system before restoring your data.
When using cryptocurrency as a real currency
Falling plagued by this scam is the crypto equivalent of falling at the last hurdle. After successfully purchasing your crypto, it makes sense that you then look for opportunities to spend it. However, paying for something using cryptocurrency is not like paying with PayPal and carries a much higher risk as there is less of a safety net to make sure you get what you pay for with a purchase.
Crypto transactions are final, so if you want to buy something like a car, trade in person or pay who you buy from only after you have the keys in hand. However, some software subscriptions can be paid for in crypto and are generally considered safe. For example, buying a VPN service for a year, for example, can make sense as a BTC transaction.
Legitimate companies doing crypto transactions will want to protect their reputation for having good customer service in place. Some retailers who accept BTC will be happy to make sure the wallet address is correct so you can pay the right person. Researching user reviews from a variety of verifiable sources and forums can help you decide whether or not to proceed with a transaction. Keep in mind that these types of transactions are currently the safest in person, when possible.
Good old fashioned hack
Of course, people have been trying to hack crypto exchanges since their early days. It’s the 21st century version of a bank robbery, with the added benefit of potentially being able to retrieve a wealth of personal information at the same time.
The best way to protect your cryptocurrency from hackers is to take your assets offline using a “cold” wallet. Cold wallets come in the form of a USB stick type device and are not connected to the Internet, unlike their “hot” counterparts. If you set it up correctly and keep the passwords safe, it is almost impossible to hack these hardware items.
Cold wallets cannot be accessed without a PIN code which helps them stay even more secure. To make them work, you need to enter a string of predetermined starting words, and if you put the 24 words in the right order, you get there. Some wallets also offer the option of including a customizable 25th word. Adding 24 words + 1 random choice helps make a crypto wallet virtually impossible to hack.
Scams have been around for as long as people interact with other people, and the best way to avoid them is to stay informed. Keeping up with cryptocurrency news from various sites will help you stay on top of the latest news and make comparisons for yourself on the information you receive.
Ultimately, it’s important to trust your judgment and research multiple trusted sources – and our how-to guide to crypto wallets can be a good start.
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