What happens when a market like crypto sees billions of dollars in investment? Well, scammers start to want a slice of the pie, and begin using more sophisticated tactics to con people just like you out of their funds.
In this article, we’ll explore 5 of the most deceptive ways that people are losing their hard-earned crypto, and provide tips on how to protect yourself. Be sure to read on until #3 - it’s a little-known scam that most investors lose A LOT of money to.
#1 - The Fake Stake Scam
Staking has become a popular way to earn passive income in the crypto world - sadly, scammers have been taking advantage of this trend by creating fake staking pools that steal your funds. They lure investors in with promises of high staking rewards and require you to send your coins to a fake address.
Once you send your funds, they disappear, and you're left with nothing.
To avoid this scam, always do thorough research before joining any staking pool. Check the legitimacy of the project and read reviews from other users. It’s important to never make snap decisions with your money, otherwise, you’ll definitely regret it.
#2- The Fake Mining Scam
Mining cryptocurrencies can be a very lucrative business, but scammers have found a way to con people out of their funds by creating fake mining pools. Once again, these scammers will offer high mining rewards that seem better than market average, and require that you to send your coins to a fake address to start the process.
Never fall for these tricks, do your research on a project and never FOMO in based on market buzz.
#3 - The Social Engineering Scam
Social engineering scams are among the worst kinds of scams in the crypto landscape. Here, scammers utilise psychological weaknesses like social proof to trick you into giving away your passwords or private keys. One excellent example, is that scammers will send a fake email pretending they're from CoinBase - and they need you to provide some of your details as they fear someone might have accessed your account.
This kind of emotional manipulation and high level persuasion tends to get past most people, which is why you should always be wary of unsolicited messages or requests for personal information. Use caution when interacting with strangers online, and always verify the identity of anyone you communicate with before giving away any sensitive info or funds.
#4 - The Pump and Dump Scam
This is a classic, and if you haven't experienced one of these yet, count yourself lucky. This scam is often seen in low-market-cap altcoins - here scammers create hype around a particular coin, making it seem like the best thing since sliced bread, causing its price to rise as much as possible.
As you see the price rise, you naturally start to develop more belief in the project, so you dig your grave deeper and buy more - or you even might tell your friends and family about it...
Then, just as everyone in the project is experiencing massive euphoria, the scammers sell off their holdings, causing the price to plummet, and leaving your coins to be worth absolutely zero.
Always do your research before investing in any low-market-cap coins - and any coin for that matter. Most importantly, never invest in a coin just because your favorite influencer is shilling it - as we've seen from FTX, these influencers can make massive mistakes....
#5 - The Impersonation Scam
Similar to social engineering scams, another low level and horrible type of scam is when influencers get impersonated, often through fake accounts or email addresses. These fake accounts of massive influencers will follow you and engage with your content, and their profile will exactly match the content of the real account - so in the moment you might get so overwhelmed that your favourite influencer is messaging you that you might just reply to them.
Trust us, don't reply.
If it seems too good to be true, it probably is. To avoid being scammed, always double-check the contact details of anyone you interact with, and go over the fine details multiple times. As a rule, just remember to never ever share your info with anyone, it's definitely a trap!
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