The Adoption Headache: Five Categories Of Cryptocurrency Scams That Hinder Crypto Adoption – Forbes

The Adoption Headache: Five Categories Of Cryptocurrency Scams That Hinder Crypto Adoption – Forbes

Blockchain Crypto Market Technology
November 28, 2022 by Coinvasity
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Illuminated by a laptop screen a tired looking African-American woman is resting her elbow on a desk … [+] and her head on her hand while staring at the screenThe anatomy of a crypto scam is good to know. As they keep evolving, the best protection is to know what to expect in order to
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Illuminated by a laptop screen a tired looking African-American woman is resting her elbow on a desk … [+] and her head on her hand while staring at the screen
The anatomy of a crypto scam is good to know. As they keep evolving, the best protection is to know what to expect in order to make them easier to point out. Here are five categories of crypto-related scams that trap investors.
These scams target online cryptocurrency wallets. In a seemingly legitimate email, there will be instructions to confirm something to do with identity or a recent transaction. Some prompts come in the form of a pop-up mimicking the real wallet service provider.
All phishing scams require a secondary login, which forces a user to re-enter their information. Their target is the user’s private keys.
Phishing, E-Mail, Network Security, Computer Hacker
While it might be easy to forget to log out of a cryptocurrency wallet, it’s vital to ensure that logins are secure. It’s even better to add two-factor authentication to add an extra layer of security to the services you use. Additionally, unless it’s an active and ongoing transaction, refrain from sending funds.
In mid-2020, several high-profile Twitter accounts underwent a simultaneous hack. The group targeted millions of users that would trust these accounts. Some of these accounts were of Apple AAPL , Elon Musk, Wiz Khalifa, and Joe Biden. The message claimed that the person or company was “giving back to the community”. All that the “community” had to do was send Bitcoin BTC to a certain address, and it would be doubled.
The time was limited on such an offer. The attack went on to target more accounts with a high following and indicated multiple addresses. Before its scope could be detected, the main address had already received 12.5 bitcoin or about $116,000 at the time.
Fake News concept with gray words ‘fact’ in row and single bold word ‘fake’ highlighted by black … [+] magnifying glass on blue background
As a good rule of thumb, observe the topics your preferred influencer or celebrity talks about. If you know how they speak, or how they assess trends, you’ll be able to identify when something is off their usual conversation. Better yet, if you know their values, you will be able to spot the scam, should their account be compromised.
On a fake cryptocurrency investment website, group, or application, the platform often mimics something substantial. The scam may use imagery, a similar website link, or even be as close as possible to an independent investment platform.
On such a website, there are plenty of testimonials and attribution to a certain person. If the scam is on Telegram, for instance, the person will insist on how much profit they’re making and provoke an unsuspecting investor to start with as little as $50.
Bitcoin sign in a trap. Cryptocurrency is a trap for money.
The allure of some of these fake websites is that they might reward the first or second deposit that they promise to double in 24 hours. The quick allure of high returns often dupes investors to bring in more capital, and before they know it, they can’t make a withdrawal.
The nightmare for investors becomes clear when all efforts to trace their recruiters go futile. Always counter-check links; if they are suspicious, refrain from interacting further with them.
These scams heavily sell passive income. They claim that investors can make all the profits without all the work. By design, they offer a rental model for mining hardware in exchange for the proposed revenue. Ordinarily, the deal makes it seem like investors are going to put in minimal capital and make daily returns.
However, the returns don’t reflect until it’s too late. This was the case with the infamous Bitclub network, where investors were invited to own shares in mining equipment. While the network operated the mining equipment, investors could sit back to monitor the returns from their shares.
Ponzi scheme Business pyramid network with investors group as victims in fake company profit … [+] statistics Financial fraud Illegal investment scam Stealing money from people concept vector illustration
The reality was that it quickly became a Ponzi scheme. Instead of the network acquiring more bitcoin mining equipment, it never upheld its model. Additionally, heavy promotion and increased recruitment only added to the network’s weight before it collapsed to the detriment of unsuspecting investors.
While these scams rely on social engineering, they are often hard to dismiss. A scammer can obtain any sort of information from your online profiles, and use it to scam others. In some cases, they may hijack a social profile, and demand a cryptocurrency payment to restore access.
Some other scammers claim to have adult websites or content against someone. They may proceed to spam the person’s account, threatening to leak damaging information. Their requirement to the person under threat is to send their private keys or payment to an undisclosed account. Some scammers demand payment in Bitcoin or in Monero XMR , which is a private cryptocurrency.
Hacker attacking internet
If someone you know experiences such a scam, it’s advisable to refrain from engaging with the said hacker. Furthermore, it’s vital to change passwords, regain account access, if it’s compromised, and use the right channels to report such an attack.
Undoubtedly, scams expose investors to the unpleasant side of cryptocurrencies. While Bitcoin gets a negative reputation for what it didn’t do, knowing what’s bad will be the key to differentiating and therefore picking out what’s good. People will still have distrust toward Bitcoin and other cryptocurrencies while scams persist.
Cryptocurrencies, in and of themselves are tools. What’s needful is separating the bad actors from the tools, as in this case cryptocurrencies are used. The same nefarious actors would use cash, credit cards, or bank accounts to target investors’ funds.
As a better understanding of scams comes to light, fewer investors will have to suffer; perhaps increasing positive adoption of cryptocurrencies.

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