With so many malicious individuals looking to take advantage of your situation - investing can be incredibly difficult. You may not know what to avoid or how to identify these attacks – especially if you’re only a beginner.
Below, we are going to take a look at some common cryptocurrency scams so that you can educate yourself and know what to watch out for.
Sound interesting? Then let’s get started!
Fake cryptocurrency wallets and exchanges
Cryptocurrency wallets and exchanges are required to buy digital currencies. However, many are set up by scammers to trick beginner investors into sending them money.
These accounts can sometimes be difficult to spot, so it’s important to do your research and keep an eye out for red flags. You should never use sites that are unsecured or have bad reviews – even if they look real.
Of course, don’t be put off altogether. There are still many great providers that can help you started and some even offer additional payment methods. Check out buy bitcoin with gift card for more information.
Phishing scams occur when scammers target people by posing as a legitimate company. They then trick them into giving up sensitive information, such as:
- Bank Details
- Identity Information
In many cases, fake websites and social media profiles are created to make them appear even more real. You should make sure to check all the emails you receive carefully and never share your data with people you don’t trust.
You can read more tips to help you identify phishing emails here.
Initial Coin Offerings are a way for new start-ups to raise funds. During the process, a company creates a new cryptocurrency and offers it to individuals in exchange for others.
Unfortunately, these are unregulated and there are many people out there that take the funds for themselves. If you want to take part in an ICO you’ll need to seek expert advice and verify their legitimacy.
Malware attacks can happen to anyone, but they are a common occurrence for those who have invested in cryptocurrency. Hackers use malicious software to gain access to an individual’s digital devices. From here they extract information to open their digital wallet.
Luckily there are plenty of ways to prevent this from happening to you. For example, you can install an antivirus program to protect your devices. You should also avoid downloading files from suspicious sources.
Finally, Ponzi schemes are a type of scam that involves paying profits to early investors using the investments of new ones. This creates a deadly chain that often breaks when there aren’t enough new investors to support the scheme.
While they look tempting at first, they often result in huge losses for the victim. Always be aware of offers that seem too good to be true (because they usually are).
As you can see from the information above, there are many scams within the cryptocurrency sector. You must know how to avoid them so that you can protect your current investments and your overall financial health.