Investing

Nowadays, as the interest in cryptocurrencies grows, so does the presence of fraudulent schemes within the digital asset market.

The landscape of cryptocurrency scams is evolving, becoming increasingly intricate. Even seasoned investors in the crypto sphere may find themselves susceptible to deceit if not vigilant.

Protecting your crypto investments necessitates a keen awareness of potential scam variations and discernible indicators of fraudulent actors.

In collaboration with the cryptocurrency investment platform, Luno, let us illuminate several strategies to identify prevalent crypto scams:

1. Tempting Social Media “Giveaways” Vowing Crypto Multipliers
   Among the most prevalent crypto cons are social media giveaways, where scammers promise to amplify or match the amount of cryptocurrency sent to them. Often endorsed by celebrities or notable figures in the crypto domain, these giveaways can be alluring but deceptive.

These giveaway schemes often impart a sense of urgency, coercing impulsive decisions that can result in the loss of your entire crypto holdings.

How to safeguard yourself: While legitimate social media giveaways do exist, ensure thorough research and verification of the associated account. If prompted to submit cryptocurrency or disclose your login and wallet details, it is advisable to steer clear of such giveaways.

2. Deceptive Websites or Applications Coaxing “Investment” and Personal Data Sharing
   During your quest for promising cryptocurrency prospects, encountering websites touting substantial investment possibilities is plausible. While these sites may exhibit sophistication and gain recognition in the crypto community, scammers typically cease operations after amassing funds.

Alternatively, scammers might mimic popular crypto websites or apps to extract your login or wallet particulars. By the time this ruse unfolds, your cryptocurrency holdings may have been entirely siphoned away. :'(

How to shield yourself: Always exercise caution by meticulously vetting all crypto-related websites before divulging sensitive data. Refrain from downloading crypto mobile apps from unofficial sources and remain vigilant against deceptive lookalike applications.

3. Email Phishing Scams Peddling Time-Limited Crypto Offers, Fabricated Confirmations, and Potential Extortion
   Tactics employed in email crypto scams vary. Some emails coerce urgent payments to access limited-time offers that sound excessively promising.

Others may request you to ‘validate your transaction’ or deceive you by claiming a specified amount of cryptocurrency has been transferred to your wallet. Clicking on these validation requests often redirects you to a page soliciting your login or wallet details.

Another common email crypto swindle involves extortion, where scammers threaten to expose fabricated evidence of your visits to adult websites or access to your webcam. Failure to remit the specified cryptocurrency within a stipulated timeframe results in the threatened information being ‘leaked’.

How to defend yourself: Prioritize caution by refraining from opening emails from unfamiliar sources. Additionally, scrutinize URL links for spelling accuracy before clicking and remain wary of potential URL redirects (a significant warning sign). Above all, refrain from sharing your private keys or codes with any third party.

4. E-commerce Platforms Accepting Cryptocurrency Payments Without Fulfilling Commitments
   Certain e-commerce platforms now embrace cryptocurrency as a valid payment mode. Despite this, scammers may establish counterfeit e-commerce stores to entice crypto-based purchases, only to renege on delivering the products.

How to fortify yourself: Recognized as marketplace scams, your best defense involves patronizing legitimate platforms that accept crypto, especially those incorporating buyer protection measures. Exercise caution when dealing with standalone, lesser-known e-commerce sites lacking widespread validation or reviews.

5. Overhyped Crypto Investments Backed by Celebrity or Influencer Endorsements on Social Media
   Exercise vigilance when a cryptocurrency garners excessive attention, as this could be a sign of the ‘pump and dump’ investment scam. This ploy entails scammers bulk-buying a low-value coin, promoting (pumping) its value, and swiftly selling (dumping) once the price rises.

Often, these fraudulent tactics involve endorsements by celebrities or influencers on social media, fueling the hype and illusion of a coin’s legitimacy. These influential figures may be incentivized to endorse the cryptocurrency or might have fallen prey to scam tactics themselves.

Defensive measures: When observing a cryptocurrency acquire substantial attention and value escalation, resist succumbing to FOMO. Conduct thorough research as sudden value spikes fueled purely by hype should raise caution flags. Such schemes have the potential to artificially inflate cryptocurrency values, only to plummet shortly after.

6. Direct Messages from Acquaintances Promoting Crypto Investment Opportunities
   Should you receive unsolicited direct messages from old acquaintances or loved ones advocating crypto investment ‘opportunities’, it is advisable to ignore or directly contact the individual.

Chances are high that the individual has been manipulated by a scammer or their account has been compromised, enabling a fraudster to impersonate someone known to you.

How to safeguard yourself: Refrain from engaging in cryptocurrency investments advocated by others, even if the source is familiar. Opt for the secure route of investing through accredited and regulated exchange platforms.

7. Assurances of Free Money or Guaranteed Returns
   Exercise extreme caution whenever an entity or site claims to dispense free money or assures guaranteed crypto returns. If an offer seems too good to be true, it often is.

Financial ventures lack guarantees, as investments inherently fluctuate in value.

How to protect yourself: Stay vigilant for potential red flags, especially promises of effortless gains. Instead, seek comprehensive whitepapers on your intended cryptocurrency investments. These documents illuminate the cryptocurrency’s design and functionality, offering insight into its future growth prospects.

For a secure and regulated approach to crypto investments, consider Luno, the leading digital assets exchange in Malaysia. This platform facilitates seamless crypto transactions, providing users with added peace of mind.