Concept of Cryptocurrency Scams

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A cryptocurrency is a digital payment option that does not involve a bank or government to validate the transactions done. It is a form of digital currency where no centralized authority verifies its transactions. Instead, a decentralized system always verifies transactions done by cryptocurrencies. Cryptocurrencies are dependent upon the decentralized authority for keeping all the records, and the system is also liable for issuing a new unit.

Cryptocurrency has derived its name from encryption, as encryption algorithms ensure secure online payment of it. Cryptocurrency can be used to buy goods we need on a daily basis or to pay for regular services, but most people exercise crypto as an investment option.

Types of Cryptocurrency Scams

Cryptocurrency is a popular investment option nowadays. But, a lack of regulations and an absence of banks or third-party interference have made cryptocurrency scams more prevalent. Being well-informed about these scammers’ strategies can save you from getting bankrupt. Here are some things to know,

Impersonating Government Agencies

The calls you get from government agencies asking for your personal information related to your cryptocurrency wallet and making promises about safeguarding your wallet are very likely to be a fake call, as cryptocurrencies are maintained and managed by decentralized systems, and the government has nothing to do with these digital currencies. 

Illegitimate Websites 

Investment fraudsters often create fictitious websites to fool people. The fraudulent websites imitate the domain names of original websites and pretend to be one of them. These fake online trading platforms disguised as legitimate sites try to garner investors’ personal information related to their cryptocurrency wallets and eventually steal them.

Phishing Scam

In a phishing scam, scammers send malicious links via emails to cryptocurrency investors. These malicious links redirect them to fake websites that ask them to provide their personal information. Cryptocurrency perpetrators garner this information to get access to their digital wallets. Once they get access to the funds, they disappear with the money.

Pump and Dump Scam

As the name ‘Pump and Dump’ suggests, scammers here buy digital currencies in vast amounts and inflate the price of the currencies. Once the cost of the currencies rises, they sell them at a high price in order to create a considerable profit. Sometimes they even spread false news related to crypto to pump the price.

Investment Recovery Scam

Investors often lose money while investing. As a countermeasure, many companies have emerged that promise those investors to recover their money. Unfortunately, some fraudulent companies disguised as investment recovery companies take advantage of the scheme. They assure these investors to help them get back their money and ask for money upfront. Once the investors pay them, the scammers simply disappear with the money without any delay.

Affinity Fraudulence

Sometimes scammers get associated with an organization that follows a certain notion or shares common characteristics. Scammers pretend to be one of them to garner their trust. They generally target the organization’s leader. Scammers believe that the followers will spontaneously follow if they can manipulate the leader to invest with them.

Fake Job Offers

Cryptocurrency scammers pretend to be the HR of companies that deal with cryptocurrency investments. They offer jobs to the victims and demand advance payments to enrol them. Sometimes they even ask victims to pay in Cryptocurrency. Companies that ask for charges in order to recruit are likely to be illegitimate and need to be avoided.

Extortion Scam

In this imprudent method of scam, scammers try to fool investors by claiming they have a record of their sensitive information. For example, they claim to have a history of victims’ visits to adult websites, etc. Then, they threaten to expose this information in order to extort their personal data related to their digital wallet.

Conclusion

Fraudulent cryptocurrency schemes lure people to invest with them and eventually steal their hard-earned money. Independent investigation is always effective in preventing them from stealing

Shubham Nema
Shubham Nemahttp://lifeisaware.com/
Shubham Nema is a Blogger, Content Writer and Owner of Lifeisaware.com

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