5 common cryptocurrency scams you need to avoid

Cryptocurrency have proved effective bait for a variety of scammers who have used the popular online decentralized currency technology to peddle a number of different scams. We detail 5 and how to avoid them.

“Proven System” Scams

Many online adverts, spam messages/emails or even unsolicited phone calls may purport to offer a system whereby the victim can get rich quickly by investing in a cryptocurrency “system”.

Such “opportunities” often claim to use automated software, “proven methods” and may even claim to be endorsed or even owned by well-known celebrities and use fake media articles claiming the system was featured on the news or well-known television shows.

Scammers may also use the name of popular cryptocurrencies in their name. For example, “Bitcoin Trader” or “The Bitcoin Loophole“.

However these get-rich-quick scams are typically nothing to do with investing in crypto-currency. Such scams are merely using the names of well-known cryptocurrencies to draw people in to a scam. Such scams are often designed to lure victims to unregulated and questionable trading platforms asking the victim to make a significant deposit, which the victim will usually go on to lose.

Avoid these scams by…
– Using only legitimate and trusted sources when learning about investing in cryptocurrencies. See end of article for our recommendations.
– Avoid schemes that claim they will make you rich quickly. While you can make money on cryptocurrency, it isn’t a get-rich-quick scheme and should be considered a measured risk. If it appears too good to be true, it probably is. (claims you can make thousands of dollars a day/week with minimal investment are not going to be genuine opportunities.)
– If a website is vague about what it is you will actually be doing or how it works, you should avoid it.
– If you’re directed to any type of trading platform such as binary options trading or forex trading, especially a platform you’ve never heard of, it’s probably a scam.

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We’ll double your cryptocurrency / fake celebrity endorsements

If you see any claim on the Internet (or especially social media, Twitter) that claims it will double or triple your cryptocurrency amount just as soon as you send some cryptocurrency to a particular wallet, it’s a scam. There are NO opportunities like this that are genuine.

Often these fake opportunities will be promoted by fake Twitter accounts, even accounts that have Twitter’s blue verification tick. We discuss more about how scammers promote cryptocurrency giveaway scams using verified Twitter accounts here.

Avoid these scams by…
– Understanding that there exists no such opportunity where you can send off cryptocurrency to a wallet and automatically receive more cryptocurrency back. If you do this, you won’t get anything back. It’s that simple.
 

Fake apps

Apps purporting to be from well-known Cryptocurrency Exchanges, Tickers or Wallets often find themselves impersonated on app stores such as Google Play. These are essentially phishing apps designed to steal login credentials that can be used to steal cryptocurrency.

Avoid these scams by…
– Follow links to official apps from the official websites so you know you have the right one.
– Pay attention to reviews on the app stores

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Malware

In some cases, victims have been approached about investing in cryptocurrency and persuaded to allow crooks to access their computer to “set up a cryptocurrency wallet”. The victim is then told to buy increasing amounts of cryptocurrency.

However the scammers also installed malware onto the victim’s computer allowing them to access that wallet and transfer any funds invested directly to the crooks.

Avoid these scams by…
– Only trusting legitimate entities when it comes to learning about cryptocurrency. See later in the article.
– Never allow anyone you don’t know or trust to access your device to setup a cryptocurrency wallet.

Fake cryptocurrency investments

This broadly refers to any investment scheme where you are told to invest by paying someone else to invest your money into cryptocurrency on your behalf, only to find out that your money is being taken with no intention of returning it.

Such fake investment schemes can also turn out to be pyramid scams where victims are told to recruit other members as well.

Avoid these scams by…
– being especially cautious of schemes that promise unrealistic pay-outs. Schemes that claim to double, triple your money (or more) are likely to be scams.
– Don’t trust people you don’t know, regardless of how they contacted you (website, email, phone call, social media.)

Some resources…

Introduction to cryptocurrency: the basics (Free)
Introduction to digital currencies and its place in the world. (Free)
Course to cryptocurrency for beginners: Udemy. (Paid.)