Apparently, its value is constantly increasing and it promises investors quick profits, at least until the prices of digital currencies drop.
IT journalist Phil Muncaster explains on the ESET blog In the context of the rise of crypto scams, what are the most common scams and tips for staying with crypto in your account.
The “fortunes” that could result from virtual currency transactions are reminiscent of those targeted during the gold rush of the 1800s. Or so many of those around you would have you believe, including a long list of Crocs.
In reality, if you are interested in cryptocurrencies these days, you are most likely exposing yourself to a great risk of fraud. It is the new Wild West, a world without laws and regulations where cybercriminals often have the power. But the normal fraud prevention rules apply here too. Everything you read online should be carefully reviewed and verified. Choose not to believe all the hype surrounding the topic and you’ll have a good chance of staying safe.
Why are cryptocurrency scams on the rise?
Scammers are experts at using current events and trends to trick their victims. And there is nothing more in tune with the times than cryptocurrencies. Media articles and social media posts are partly responsible for this as they create a feedback loop that only amplifies the hysteria surrounding virtual currencies. The result ? Between October 2020 and May 2021, Americans lost an estimated $80 million in thousands of cryptocurrency scams, according to the FTC. In the UK, the figure is even higher: police say victims lost more than £146 million (€172 million) in the first nine months of 2021.
Why are scams on the rise? Because :
Few rules govern the cryptocurrency market for investors, unlike the rules of the traditional stock market;
The huge media interest in this topic perpetuates phishing and scams;
The increase in the value of cryptocurrencies compulsively attracts consumers who dream of getting rich quickly;
Social media helps amplify the frenzy, real or fictional;
It also uses the lure of coin mining to earn money, a method often used in phishing attacks.
What are the most common cryptocurrency scams?
If you have virtual currency securely stored on a cryptocurrency exchange, your deposits may be exposed to hacker attacks. On numerous occasions, threat actors have managed to extract funds from these companies, sometimes amounts reaching into the hundreds of millions. However, the companies involved often promise, rewarding impeccable customers. Unfortunately, there is no such insurance for victims of cryptocurrency fraud. Once lured into such a scam, you may be willing to pay large sums of money.
It helps to understand what these scams look like. Here are some of the most common examples:
It’s… a type of investment scam where victims are tricked into putting money into a non-existent business or “get-rich-quick scheme” that does nothing but line their pockets. Cryptocurrencies are ideal for this, as scammers keep inventing new unspecified “cutting edge” technologies to attract investors and generate higher virtual profits. Counterfeiting is much easier if the currency is virtual.
Withdraw money and deposit
Scammers encourage investors to buy shares in lesser-known cryptocurrency companies based on false information. Subsequently, the share price rises and the scammer sells their own shares, making a sizable profit and leaving victims with worthless shares.
Fake image associations with various celebrities.
Criminals hijack celebrity social media accounts or create fake accounts and encourage their followers to invest in fake schemes like the ones mentioned above. In one high-profile case, scammers lost around $2 million by using Elon Musk’s name for a Bitcoin address to make the hack more truthful and legitimate.
fake exchange houses
Scammers send emails or post messages on social media promising access to virtual money stored on some cryptocurrency exchanges. The trick used is that the user has to pay a small amount first. This exchange does not exist and your money is lost forever.
Cybercriminals fake cryptocurrency apps and upload them to app stores. If you install a replica of such an app, it could steal your personal and financial data or, by using it, infect your device with malware. Other apps can trick users into paying for nonexistent services or try to steal their cryptocurrency wallet login credentials.
fake press releases
Sometimes scammers even manage to fool journalists by publishing false information. There are two such cases, where legitimate news sites have published information about reputable retailers preparing to accept payments with certain cryptocurrencies. The fake press releases on which these reports were based were part of “withdraw and deposit” schemes intended to increase the value of the scammers’ shares in these coins.
Phishing is one of the most popular methods used by criminals. Emails, text messages, and social media posts are doctored to appear to come from a legitimate and trusted source. Sometimes this “source”, for example a credit card provider, bank, or government official, requests payment for a particular service in cryptocurrencies with a tight deadline. The applied method consists of rushing the victim, forcing him to act without having time to analyze the information.
How to avoid being scammed
The best weapon in the fight against fraud is suspicion. Unfortunately, we live in an age where not everything we read online is true. And much of this information is explicitly created to mislead and harm us. With this in mind, apply the following measures to avoid being cheated:
Never provide personal information to any entity that contacts you without your request, via email, text, social media, etc. It may even look like a message from a friend of yours, but in reality, it could be a hacker who has hijacked your email or social media account. Check the authenticity of the messages, by another means of contact.
If something is too good to be true, it usually is. Treat any investment system with a dose of suspicion.
Enable two-factor authentication for any cryptocurrency account.
Turn down any investment “opportunity” that requires payment up front.
Never use unofficial app stores.
Use antimalware software from a trusted vendor on your computer and mobile devices.
The world may be going crazy over the “cryptocurrency” phenomenon. But that is no reason to follow the trend. Stay calm and don’t fall victim to aggressive promotion.
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