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See The 5 Common Crypto Scams In 2023 To Avoid

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Cryptocurrency is one of the fastest-growing industries in the world. Due to its increasing adoption, many individuals and entities use crypto assets for investment and payment.

According to a MarketWatch report, a survey in April 2023 by Pew Research shows that about 90% of American adults are aware of crypto assets.

However, the increasing crypto adoption and use have made the environment susceptible to scams and fraud. So, you must remain alert against possible crypto scams skyrocketing in the industry.

This article explores 5 common crypto scams in 2023 and how they operate. Also, you will learn how to avoid such crypto scams and more.

What Are Crypto scams?

Cryptocurrency scams are tactics that aim to steal digital assets from investors. The scams come in different forms as the scammer are now smarter in their approaches.

The Federal Trade Commission (FTC)  data revealed that the crypto industry lost over $1 billion worth of crypto assets between January 2021 and March 2022.

The value came from victims who reported their losses. But there are still those who didn’t report theirs.

Here are 5 common crypto scams to watch out for in 2023.

READ ALSO: US SEC Chair to Defend Actions on Crypto before HFSC

Phishing Scams

Crypto phishing scams usually target the victims’ private information for their crypto accounts. They lure unsuspecting users to release the private keys of their digital wallets or login credentials for their online accounts.

Usually, the scammers pretend to be legitimate platforms or entities such as digital wallet providers, utility companies, government agencies, or crypto exchanges.

They often use email, social media platforms, and other online routes to send messages with links to their targets.

By clicking the link, you will be redirected to a fraudulent website that will prompt you to input your account details. Once you do, the scammer will be authorized to invade your account or wallet and steal your funds.

How to Avoid Phishing Scams

Phishing scams are quite common with employees of companies who get details of their tasks through links and downloadable files.

So, before clicking on links and files, you should ensure they’re from the right source.

Also, you can avoid immediate and direct responses to emails and messages from banks and other companies that you use.

Instead, search for the company’s official website or contact details and respond.

READ ALSO: Ethereum Price: The Shanghai Upgrade Impacts The Markets

Investment Scams

In investment scams, the bad actors present huge and enticing opportunities and rewards to their targets. The aim here is for the target to release their crypto assets.

The scammers could act as investment managers or use pictures of celebrities to lure people into such investments.

In most cases, crypto scammers create a website with a legitimate façade comprising complicated investment terminologies.

Also, they usually present apps where investors send their funds after downloading and creating an online account.

After some time, the scammers will block withdrawals and siphon all the funds on the platform.

How to Avoid Investment Scams

There are no guaranteed returns in any investment, both in traditional investments and the crypto industry.

Though a genuine crypto investment could give a higher return than a traditional one, only some of the time. Also, there are risks and uncertainties to even genuine investments.

So, you should step into crypto investment slowly. Avoid anyone or investment sources that could mount pressure on you.

Research any crypto asset you plan to invest in and the platform thoroughly. Also, let all your crypto investments be within your risk tolerance.

Romance Scams

Over time, crypto scams have migrated to dating apps where an online and long-distance relationship is the order of the day. The scammer will pretend to love their victim and will take time (months) to build trust.

When they have their partners’ confidence, they will start requesting crypto tokens. They could present it as a joint investment plan to secure their future together.

Once the target sends the digital assets, the dating scammer will disappear from all their online contact.

How to Avoid Romance Scams

Though it’s good to make online friends, you should be careful with the extent of the relationship.

It could be a scam when someone you’ve never met starts requesting your crypto assets for funds or selling some assets to you.

Also, don’t disclose your private crypto details to such an online acquaintance.

Pump and Dump Schemes

This strategy has become one of the commonest crypto scams in recent times. Usually, scammers would pick up or develop a crypto token and lure people into investing in it.

They will hype the asset through social media platforms with aggressive advertisements and campaigns. Moreover, they’ll promise high double-digit profits for investors to commit their money.

Through collective efforts, the scammers would drive the price of the crypto asset up. Then they will suddenly sell off all their holdings at once.

This action will crash the token’s price, leaving the new investors with nothing.

How to Avoid  Pump and Dump

Remember that if it’s too good to be true, it’s not true. Most promises of high yields and rewards are always false.

You must maintain good financial discipline and not allow anyone to deceive you with huge promises. No legitimate investment could provide some of the outrageous returns presented by pump-and-dump schemes.

READ ALSO: EDCON 2023 Brings Vitalik Buterin To Light

Giveaway Scams

Giveaway scams are crypto scams with promises of rewards in the form of free money or other prizes to investors. However, the investor is expected to comply with their requirements.

In most cases, crypto scammers will create fake social media accounts of popular celebrities and influences. They will post exciting messages to lure ignorant people into sending crypto assets to their accounts.

For instance, scams have used Elon Musk Freedom Giveaway on Twitter, promising followers of free crypto assets.

But the victims will only get the BTC tokens when they deposit some cryptocurrencies in the scammer’s wallet. Data revealed that over 25 accounts are on social media impersonating Elon Musk.

Also, Facebook recently saw an influx of fake accounts with the picture of the $55 million lottery winner, Scott Gurney.

The scammers promised financial help to those victims who deposited some crypto assets into their accounts.

How to Avoid Giveaway Scams

A lot of crypto giveaway scams come through social media platforms. Beware of some posts on social media relating to crypto investments, as they could be fake.

Don’t send crypto deposits to listed crypto wallets on such platforms, as they will steal your funds.

Once you notice that you’ve been added to a Twitter list you suspect to be a scam, please don’t visit the website where they redirect followers.

Instead, remove yourself from the list by blocking the creator. Then, you can report the scammer’s account.

How To Report Crypto Scams

If you suspect a crypto scam or have fallen victim to it, you must act quickly in reporting it. You can report crypto scams to the following agencies:

Also, you should contact your bank immediately if you’ve done any of the following:

  • Shared personal financial details with scammers.
  • Made payment through bank transfer.
  • Made a payment via a debit or credit card

READ ALSO: Bitrue Exchange Loses $23 Million To Hackers

Conclusion

The increasing rate of crypto scams is becoming more alarming as the crypto industry advances with innovations.

Though some measures are emerging from regulators and developers to curb scams, most work involves crypto holders.

So if you’re in the industry, familiarize yourself with the different types of crypto scams and how to avoid them.

Don’t click or download links from emails and unconfirmed websites as much as possible. Always ignore cold calls and research any crypto asset before committing your money.

Also, remember to maintain your risk tolerance by only investing the much you can bear to lose.

 

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