2. Rug pull scams
Rug pull scams involve investment scammers "pumping up" a new project, non-fungible token (NFT) or coin to get funding. After the scammers get the money, they disappear with it. The coding for these investments prevents people from selling the bitcoin after purchase, so investors are left with a valueless investment.
A popular version of this scam was the Squid coin scam, named after the popular Netflix series Squid Game. Investors had to play to earn cryptocurrency: People would buy tokens for online games and earn more later to exchange for other cryptocurrencies. The price of the Squid token went from being worth 1 cent to about $90 per token.
Eventually, trading stopped and the money disappeared. The token value then reached zero as people attempted but failed to sell their tokens. The scammers made about $3 million from these investors.
Rug pull scams are also common for NFTs, which are one-of-a-kind digital assets.
3. Romance scams
Dating apps are no stranger to crypto scams. These scams involve relationships -- typically long-distance and strictly online -- where one party takes time to gain the other party's trust. Over time, one party starts to convince the other to buy or give money in some form of cryptocurrency.
After getting the money, the dating scammer disappears. These scams are also referred to as "pig butchering scams."
4. Phishing scams
Phishing scams have been around for some time but are still popular. Scammers send emails with malicious links to a fake website to gather personal details, such as cryptocurrency wallet key information.
Unlike passwords, users only get one unique private key to digital wallets. But if a private key is stolen, it is troublesome to change this key. Each key is unique to a wallet; so, to update this key, the person needs to create a new wallet.
To avoid phishing scams, never enter secure information from an email link. Always go directly to the site, no matter how legitimate the website or link appear.
to be continued....
