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4 Common Cryptocurrency Scams and How to Avoid Them
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4 Common Cryptocurrency Scams and How to Avoid Them

Common Cryptocurrency Scams

Cryptocurrency scams are a big issue. It is important to know what the signs of a cryptocurrency scam are so you can avoid becoming a victim. Scams often include messages about making quick and easy money, promises of guaranteed returns, or messages from well-known people that make it seem like they endorse the product. These are all red flags for potential scams. To learn more about how to spot these types of scams and how to protect yourself against them read below.

4 Common Cryptocurrency Scams

Cryptocurrency is a new and emerging technology that has been gaining traction over the past few years. As it becomes more popular, there are bound to be those who try to take advantage of it for their own gain. Here are four scams you should know about and avoid if possible.

1.    Phishing Scams: These scams usually involve an email or other electronic communication which directs people to a website with a fake login page in order to steal your password or other personal information.

2.    Pump and Dump Scams: Pump and dumps are a type of fraud that is committed when price manipulation takes place on an exchange. The scammer will buy up a bunch of shares, wait for the share value to rise, then sell it at an inflated price before dumping it onto unsuspecting traders. This is just one example of many types of fraudulent trading schemes.

3.    Bitcoin mining: Mining requires a huge upfront investment in equipment, but it doesn’t always make you money because the prices of cryptocurrencies change so often that your investment could turn out to be worthless.

4.    Scam coins or ICOs (Initial Coin Offerings): People will invest in a coin without checking if it’s real or not, and then when they find out that they’ve been scammed, their money’s gone with no way of getting it back.

These are very common scams that usually happen with people. Besides these fours, you should know more about other types of scams to keep you safe from them.  You can get more knowledge about Crypto World from there – Broker Complaint Alert. Read their blog section.

How to Avoid Common Cryptocurrency Scams

To avoid any scam, you need to know about and scammer’s behavior. If you get a proper idea about these, then it is very easy to avoid any kind of scam. Here I am going to show you some ways of avoiding common Cryptocurrency Scams by making you aware of it.

Phishing Scams

Phishing scams are a major problem for both individuals and organizations. They can lead to the loss of personal data, financial information, or even your identity. But luckily there are some simple ways you can avoid these dangerous emails!  Here is our list of two tips to help protect yourself from phishing scams:

  • Know what a phish looks like– Phishers often use email attachments that look legit but contain malware or viruses that will infect your computer or steal important information. Emails with attachments should never be opened unless you know they come from someone you trust (like an actual friend).
  • Watch out for typos– Many phishers make spelling mistakes in their messages because English isn’t their first language and this might be the only way to understand the scam. You must avoid this type of mail, messages, social media posts, and others.

Pump and Dump Scams

Pump and dump scams are a type of stock market scam. It is not uncommon for these types of schemes to occur on the internet, but it is important to know how they work in order to avoid them. Pump and dumps happen when someone buys a large quantity of shares at low prices with the intention of selling those shares quickly after creating artificial hype about their company. The goal is that once other investors see this hype and buy into the false information, you sell your stocks at sky-high prices before anyone realizes what has happened.

So, to avoid these scams, avoid being tempted and think logically before someone offers you a huge benefit from buying or investing.

Bitcoin Mining

A new scam is being run by hackers who are targeting people who want to mine Bitcoins. This scam offers a fake Bitcoin mining software, which tricks victims into sending the hacker money as a form of payment for the software. The Bitcoin mining software is typically advertised on social networks or file sharing sites and can be downloaded from these websites onto your computer without asking for any personal information.

Once installed, this program will use your computer’s resources to generate Bitcoins without telling you that it was using up all your system memory or CPU power. If you notice an excessive amount of heat coming out of your device while it’s running, then there might be something wrong with the program and you should not continue using it.

Now you know all the natures of Bitcoin Mining. To avoid being fooled by scammers, avoid this type of offer and mainly restrict your greed for generating bitcoins.

Scam coins or ICOs

Initial Coin Offerings (ICOs) is a type of crowdfunding that occurs in the cryptocurrency world. An ICO is an event during which a company releases its own digital currency with the goal of funding for future projects. In most cases, some portion of the released tokens will be reserved to pay those who contributed to its development. The rest can be mined by participants or traded on online exchanges for other cryptocurrencies like Bitcoin or Ethereum.

Most people use ICOs as a way to invest and make money from cryptocurrencies without having to buy them outright because they’re not supported by any government or bank and their values fluctuate wildly based on market forces like supply and demand, but there have been instances where companies just take your money and run off with it. Avoid involving yourself with any ICO before proper investigation.

Looking to report a scam broker? Kindly go through our list of scam brokers that are taking money without granting withdrawals,

Conclusion

This is how cryptocurrency scams occur and victims lose everything. We tried to help you from all angles of these scams. You should make proper research of any kind of business proposal that needs investment.

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