6 Kinds of Crypto Scams and How to Avoid Them

6 Kinds of Crypto Scams and How to Avoid Them

If there’s money to be had, con artists will try and take it from you. Crypto is no exception. In fact, crypto is a prime target for scammers who take advantage of the nascent technology and the general public’s lack of familiarity with blockchain tools to position themselves as experts or leaders in the space and gain trust.

Even though in 2022 crypto underwent a dramatic downturn, crypto scams were on the rise. According to data from CertiK’s 2022 “Web3 Security Report,” last year “was the worst year on record in terms of value lost from Web3 protocols. Cryptocurrency losses due to hacks, exploits and scams in 2022 reached an all-time high of $3.7 billion – a 189% increase over 2021’s previous record of $1.3 billion.”

In this article we’ve rounded up the most common scams to explain what they are and how to identify them so you can protect your wealth.

Bitcoin scams are nearly as old as bitcoin , the first cryptocurrency and the one with the highest market cap. Of all cryptos it is the one with the most name recognition and the broadest adoption – even traditional finance firms such as Fidelity have bitcoin as part of their offerings ! Because of this, bitcoin feels “safe” to many new investors and is often the entry point to crypto.

One of the most common scams to target your bitcoin is a phishing scam. The hacker often impersonates a legitimate-sounding service, company or individual in an email or text message and tries to trick victims into revealing their private keys or fool them into sending their bitcoin to the con artist’s wallet.

Avoid getting tricked by checking any sender’s email address and making sure the sites they are linking to are legit. Often, phishing email addresses will slightly misspell a real site – i.e., Gogle.com instead of Google.com – or send you to a site that contains similar errors, such as coinbase.co instead of coinbase.com. A good habit to prevent going to malicious websites is to bookmark any legitimate sites you use for crypto and use only those bookmarks to visit those sites.

Many people new to crypto are finding their way to the space through non-fungible tokens ( NFT ), whether through collectible sites such as NBA Top Shot , buying a colorful avatar for social media or via an NFT that also serves as a ticket for an event. Sometimes called “digital collectibles” by big brands including Starbucks and Instagram, there are plenty of scammers who target both newbies and old pros in the space.

One scam unique to the NFT space involves forgeries and fakes. When an NFT project, for example Bored Ape Yacht Club, begins to rise in value, scammers will target people looking to “ape” in by creating copycat collections, sometimes stealing the original art and cloning entire projects to mimic the real, valuable one. While occasionally a blue-chip project NFT gets listed ( usually mistakenly ) for a bargain-basement price, if you see an NFT from a project for sale at far below market rates (which you can easily check on a site like NFTpricefloor.com ), chances are it’s a fake.

NFT marketplace OpenSea verifies that an artwork or collection is genuine with a blue checkmark on the listing page. You can also check past ownership and sales of an NFT. That’s the beauty of the blockchain – if an NFT seems to have appeared out of thin air long after the original mint, that’s highly suspicious because all past transactions are recorded. When in doubt, you can look for the original artist’s Twitter account and message them to ask if it is legit.

Many crypto scams originate on social media, especially on Twitter and Instagram. According to a June 2022 report from the U.S. Federal Trade Commission , “Nearly half the people who reported losing crypto to a scam since 2021 said it started with an ad, post or message on a social media platform.”

From giveaway scams to fraudulent “verified” or blue-checked accounts, social media is rife with fraud. Since Elon Musk’s acquisition of Twitter you can no longer simply glance at a blue check after a name and be sure it’s a verified account because any Twitter Blue subscriber can pay for that mark for just $8. Before you trust any advice or ideas from what seems to be a verified account, look at their other posts, how long they’ve been active and how many followers they have. A brand-new account with few followers that seems […]

source 6 Kinds of Crypto Scams and How to Avoid Them

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