Cryptocurrency has become the talk of the town these days and every investor wants to join this trading market to earn huge profits. But they do not know the harsh truth behind these trading worlds. No doubt cryptocurrency is rising exponentially but there are some things that a financial backer needs to take care of while investing his money in digital currency.
Due to the increasing craze of crypto, scammers are also looking forward to generating a path to steal your digital currencies from you. If you haven’t heard of any crypto scams by now, don’t worry. Below, we have shared some common crypto trading scams that all investors should know about before putting their resources into cryptocurrency.
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5 crypto trading scams:
1. DeFi Crypto Rug Pulls
DeFi Cryptocurrency scams take place with financial backers who are inclined towards the latest or upcoming crypto projects. The developers of the projects promise a very bright future to individuals who will invest in their project. Such scams have happened recently and the scammers have stolen about $2 million using this trick. If you want to stay away from such frauds, you have to ensure that you check the project’s documentation carefully.
2. Fake websites
Tricksters understand that people are very active on social media platforms, applications, and websites. This is why they take advantage of this thing and create fake sites to trap people. The fake websites have slightly different domains than the real ones but look very similar, which is why investors find it hard to distinguish between the real and fake websites. Whenever you use such sites and enter your personal details on it, the scammers steal all your information including the financial data.
3. Phishing scams
Source: time.com
What do you mean by phishing frauds? Such scams happen when the hackers attack your online wallet to steal your digital coins. They use various techniques or strategies to know your private key which is used to access your crypto wallet. Hackers usually send emails to people in which they try to lure them to be a part of special crypto sites and ask them to enter their personal data including the private key. The working of phishing scams is very similar to the fake websites.
4. Unwanted investment schemes
In such a scam, the fraudsters will spread the word about the fake coin or token on the different social media platforms like Twitter, Facebook, Instagram, etc. and also through email. The traders rush to buy these tokens or coins in the fear of missing out. When so many traders buy the tokens, their prices increase and this is when the scammers play their move. The fraudsters sell the coins of the traders when the prices are high. This type of fraud does not take much time to execute. It happens within minutes.
5. Giveaway frauds
We all love gifts, don’t we? Giveaway frauds also work in the same way. The scammers announce that they are providing free crypto coins in giveaways to lure the audience. Such frauds usually take place on social media platforms. In order to get the free coins, people share their personal information for the fraudsters and get trapped. They ask people to share details of their crypto wallet so that they can send giveaway coins directly to their digital wallet.
4 tips to avoid cryptocurrency scams:
1. Do your research
Before investing your money on cryptocurrency, it is essential for you to do your research. You have to ensure that the exchange you have chosen to buy and sell you digital coins is trustworthy and reputed. To find a reliable exchange, it is essential for you to check the rating of that platform. Also, read the online reviews to learn more about the exchanging platform. Check out https://www.okx.com to start your research by viewing the prices of different crypto coins.
2. Don’t accept fee offers
Source: policygenius.com
You might come across various offers on the social media platforms that claim to give you digital coins by only paying a nominal fee. We would suggest you reject all such offers because they are mostly scams. Prior to putting your resources, you want to look at the organization’s site to observe how they safeguard their clients personal information and search for online reviews from different financial backers.
3. Keep your digital wallet safe
You’ve most likely heard stories about individuals who lost several Bitcoins because they couldn’t keep up with their digital wallets. Assuming that you own digital coins, never share your private key or password with anyone. We suggest you store such confidential data offline. If you have a couple of Bitcoin hidden away on a hard drive, don’t forget about the secret key. Since it’s basically impossible that you’ll have the option to get those coins back if you forget the secret key.
4. Do not trust any website blindly
Be careful while visiting any crypto website because you don’t get to know if it is fake or real very easily. Scammers try their best to build fake crypto websites that look very similar to the legitimate ones. Do check the domain or the URL link properly before visiting any site related to cryptocurrency. To ensure a website is safe, look for a small lock icon beside the URL. Apart from this, you also need to make sure that your antivirus software is working while you visit any crypto site. This will help you avoid various crypto scams.
TO SUM UP
The cryptocurrency scams are increasing day by day. There are many techniques that hackers are using to steal the personal information of investors which can help them access their crypto coins. If you are thinking of putting your resources in the crypto trading industry, you should know about the common digital currency scams. Also, try to take all the safety measures that will help you to stay away from such frauds.