Cryptocurrency fraud has become a prominent challenge, with scammers using multiple methods to exploit victims, especially those who are new to the field. Here are some common scams and how to prevent them:
Common scams:
1. Ponzi and pyramid schemes: Scammers promise huge returns to early investors using new investors’ money. These schemes are unsustainable and end in loss for everyone except the schemers.
2. Phishing: Sending links or messages that appear legitimate to trick victims into revealing passwords or private keys to their digital wallets.
3. Fake apps and fake wallets: Scammers offer fake apps to steal users’ data or transfer their money without their knowledge.
4. Price manipulation, or what is known as “pump and dump”: where fraudsters raise the price of a certain digital currency to attract investors, then suddenly sell it, which leads to a price collapse.
5. Celebrity Impersonation: Scammers create fake social media accounts using famous names to lure victims with false promises of projects or gifts.
Protection tips:
• Verify the source: Make sure companies are legitimate through official databases, and use trusted sites to verify the authenticity of cryptocurrencies.
• Don't trust offers that seem too good to be true: If an offer seems too good to be true, it's probably a scam.
• Avoid suspicious links: Use official links to access platforms, and be wary of links that arrive via email or text messages.
• Use well-known and licensed platforms: such as reliable local or international exchanges that adhere to the laws.
How to act if you are a victim of fraud?
If you have been scammed, it is important to document all the details and contact the relevant authorities (such as cybercrime bureaus) or regulatory bodies to try to recover the funds. Unfortunately, recovering the funds can be difficult due to the anonymous nature of cryptocurrencies.
For more details on protecting yourself from these types of scams, you can check out more resources like Binance Academy.