The most common cryptocurrency scams and how to avoid them.
To all my fellow cryptocurrency enthusiasts:
We all have seen all kinds of crypto scams and some of us have also fallen prey to them. Let's take a closer look at the most common types of scams and analyze them so that we don't fall for them anymore:
1) People usually store their crypto assets in a cryptocurrency wallet or an exchange on the back of the seed phrase. This seed phrase is basically a password that is unique to your wallet, and is available only to you. If someone were to gain access to this seed phrase, they could potentially steal all your property. So, make sure you never share your seed phrase with anyone!
Scammers take advantage of this and try to manipulate people into sharing their phrases with them. For example, someone may build trust with you and eventually ask you for your seed phrase in your wallet. However, if you know this then you will not fall for the scam.
One dirty tactic is to use a phishing link that leads to some kind of nefarious website. If you click on a phishing link, you will be redirected to the same or similar website as your wallet. For example, the popular wallet MetaMask is a browser extension that uses a pop-up tab for you to type in the password. One time I clicked on a phishing link and the same MetaMask tab appeared but this time it asked for the seed phrase.
The image on the left is the default Metamask popup while the one on the right is a scam.
A good way to identify a fake website is to look at the URL. Alternatively, you can check the website itself for anything strange. Perhaps the font doesn't match the original or an image isn't in its place.
I was drawn to this scam, however the fact that I still clicked on a dangerous link is still a problem because it could have been worse. And this leads us to a more advanced type of scam.
2) The worrying thing is that if someone clicks on a phishing link without even entering anything, they may be a victim of a scam. Sometimes a virus can be installed in your computer which can track your keyboard input or even allow a hacker to gain access to your PC. This can lead to losing not only their crypto assets but also their personal files. It is known as Trojan virus.
Although uncommon, some of your information can be stolen when connected to public Wi-Fi. This is why you shouldn't manage your crypto portfolio on your phone.
3) Another common type of scam is the doubling scam. This is when someone claims that if you sent them money, they would give your amount back but doubled. Obviously no one is giving free money and be careful as this scam appears everywhere. Hackers in particular hijack Twitter profiles well and publish posts with BTC addresses for the public to send money there.
This is especially dangerous because sometimes if someone is in doubt, they send a small amount, let's say, a penny and the scammer actually gives back twice because it's only a small one. That's how they gain trust, and we all know how it can end.
4) The last type of scam I want to cover is Rag Pul. Rag pull is an investment scam where someone presents a legitimate idea or project with a malicious intent behind the scenes. The idea is that let's say the project is backed with tokens and if the founders of the project have a substantial portion of the total supply of this token, they can cash out this huge amount and basically steal other investors' money. are put into the project.
This can happen in two ways. One way is to have the coin crash all at once - this means that all of the owner's tokens were withdrawn at once. Or another way is to redeem the smaller amount over time and reduce the value of the coin. Both are effective.
To avoid rag pulls, make sure that the information on the founders of the project you want to invest in is publicly online. If so, it's probably safer because it can be prosecuted. Check out Token's website for more weird stuff. Even small details can tell a lot such that the design can look sluggish and grammar errors are also a huge red flag!
Never click on questionable links to jump to conclusions, give your seed phrase or invest in projects that cannot be trusted. Remember that if something sounds too good to be true it is probably a scam.
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