Watch Out For These Crypto Scams In 2024

Crypto Scams

Investments, it is known, are subject to market risks. But investors also face a bigger risk from scams. Thankfully, there are ways to eliminate or reduce scam-related risks. Like other investment avenues, the crypto sector is also prone to scams. With cryptocurrencies going mainstream, crypto scams have become quite common. However, cryptocurrency scams can be avoided if you are smart enough to identify them. Let us understand crypto scams in detail and ways to avoid falling prey to such scams.  

Crypto scams to watch out for in 2024

Scammers always come up with smart ways to extract money from crypto investors. Let’s look at some of the crypto scams to watch out for in 2024: 

Blackmail and extortion scams

Blackmail and extortion scams are one of the most common scams out there. In this type of cryptocurrency fraud, scammers will demand that you make a crypto transfer for not publishing some compromising information about you which may include photos or videos. With advancements in deepfake AI technology, bad actors use this to trick people into parting with their crypto assets. No matter how convincing these photos, videos or audio may appear, always report them to the authorities concerned. 

“Business opportunity” scams

This type of crypto scam typically targets investors who want high returns quickly. Here, somebody would promise to grow your crypto investment 2x or 3x. But you should understand that cryptos are decentralized and a single entity or company cannot move the market prices overnight. Remember, the “Business opportunity” might look attractive, but it won’t help you grow your wealth. 

Fake job listing scams

Scammers also use fake job listings to fool crypto investors/traders. Usually, they post fake job listings related to the crypto industry. The “job description” would include completing tasks like mining or recruiting investors. You will be asked to make a preliminary payment which is a big NO, because you will also have to give out personal information and banking details as part of the job requirement. 

Giveaway scams

Giveaways, like airdrops, are genuine practices in the crypto industry, but scammers have made inroads here too. Mimicking popular crypto giveaways, fraudulent giveaways have become a common crypto scam. Gullible investors who fall for giveaway scams often have their wallets compromised and drained. 

Impersonation scams

If you have been active in the crypto landscape, you would have encountered impersonation scams. Scammers use influential names in crypto like Elon Musk and Vitalik Buterin to spread fake news about an exploit or frozen assets. Then they will try to convince investors to disclose personal information like wallet addresses and private keys.

Investment scams

Investment scams are fraudulent investment opportunities related to the crypto industry that promise guaranteed returns to investors. “Guaranteed returns” is often a byword for scams as there is no such thing as guaranteed returns.

Phishing scams

Phishing scams are one of the most common scams faced by crypto investors. It usually involves fraudulent emails, calls, and messages designed to trick individuals into sharing sensitive information. 

Pump-and-dump schemes

Pump-and-dump crypto schemes are common crypto scams. Here, several people come together and inflate the price of a particular crypto, attracting new investors. They do this by buying the crypto timely and endorsing them on social media to draw new investors. Once the crypto price is pumped up to a certain level, the scammers sell their crypto, driving prices down. Several popular crypto projects have been accused of orchestrating pump-and-dump schemes. 

Romance scams

Romance scams have entered the crypto world too. In this type of cryptocurrency fraud, scammers charm innocent romantic crypto enthusiasts with lies. Once the scammers gain the trust of the victims, they manipulate the victim to send them cryptos under the pretext of emergencies and other problems. Scammers will also try to trick the victims into honeytraps and other such antics. 

How to spot a crypto scam

As we live most of our lives online, we are generally good at spotting red flags. Crypto scams are red flags in your crypto investment journey and you can read the telltale signs if you tread carefully. Here’s how you can spot one: 

Anything that seems too good to be true

Just because someone claims to have become a millionaire via Bitcoin mining doesn’t mean it is true. Scamsters will use all the tricks in the books to entice investors into putting their hard-earned money into a scam project. So, don’t believe everything you see online, especially those that seem too good to be true. 

“Pay to play” job postings

Be suspicious if a job posting asks you to make a payment first, which will also entail sharing your personal and bank details. Even if the amount is marginal, it is not worth exposing such personal information on a public forum. Besides, you get paid for doing a job and not pay to get a job. Think and play it safe.

Promises of guaranteed returns

The irony of guaranteed returns is that often they turn out to be quite the opposite. For instance, a crypto investment is offering you guaranteed returns. It is a heads-up for you to take a close look at the project as the crypto market is volatile and hence no one can assure you guaranteed returns.  

Unexpected communications

If you get an unsolicited call or message from someone asking you to share your crypto wallet address or other information about your crypto investment, it is a clear red flag. So, guard against such cryptocurrency scams.

How to avoid becoming a victim of crypto scam 

Crypto scams can impact anyone, experienced investors and newbies alike. However, there are ways to avoid cryptocurrency scams. Let’s discuss some of them. 

Protect your crypto with cold storage

Investing in cryptos is just the first step in your investment journey. Storing the cryptos safely is crucial. Investors can store them in a crypto wallet, like a cold storage. Cold storage is in an external hardware device where you keep the purchased crypto.

Ignore unsolicited communications

One of the oldest scamming tricks in the book is the phishing attack which can be done via unsolicited communications like emails, phone calls, and text messages. So, if you receive any of these, it is best to ignore them completely. Don’t get swayed by offers like free crypto giveaways as these are often Bitcoin scams or other cryptocurrency scams. 

Verify contact information

Scammers often reach out to individuals pretending to be someone familiar to them, like a bank official, colleagues, or even celebrities. So, if you ever get such a call where the person is pretending to be someone you know, always verify their contact information. If the scammer claims to be from a crypto trading company or platform, always check the company’s website to verify the credentials.

Move carefully before you invest

Compared to traditional investments, crypto investments are new. So, ensure that you make a move in the crypto market after thorough research and due diligence. Money once lost in the crypto market is very difficult to track or get back, so move slowly before you invest. Remember, the market’s bad actors often use FOMO (Fear Of Missing Out) to rush investors into investing.   

How to report crypto scams in India

While it is best to avoid getting involved in a crypto fraud, if you do find yourself in the unfortunate scenario, here’s how you can report it: 

Step 1: The first step is to file a complaint with the local police station, specifically the cyber crime department as they handle online frauds, including cryptocurrency fraud.

Step 2: Provide the authorities with details of the fraud and evidence like transaction details, messages/call logs with fraudsters, and any other information that might be useful to the police in their investigation.

Step 3: Notify the platform’s support team if the scam happened within the trading platform or exchange. 

Step 4: Seek legal advice or guidance if you are unfamiliar with the procedures. You can seek help from consumer protection agencies as well. 

Step 5: The final step is to keep track of your complaint after filing one. You can either track it online or follow up with the authorities regularly.

Disclaimer: Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. The information provided in this post is not to be considered investment/financial advice from CoinSwitch. Any action taken upon the information shall be at the user’s risk.

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