Every month, lots of unique cryptocurrencies are published, and all of these are accompanied by a set of cryptocurrency exchanges, including initial coin offerings. Even though these cryptos were pounded in 2018, the demand among a vast collection of traders for such investments has increased.
All of these factors draw scammers. Generally speaking, if investors are ready to put their capital into an extremely risky cryptocurrency, they should be similarly willing to put their money into fake tokens.
Here's a list of the most notable Bitcoin scams surfaced over the past few years & tips to avoid and Identify cryptocurrency scams.
Exchange and Wallet Hacks
Initially, the critical reservoirs of crypto capital for hackers are crypto exchanges. Scammers are now focusing their efforts on other areas, like crypto wallets. So if someone asks you to provide wallet details - don’t, be aware of it.
One of the biggest scams happened back in June 2020, where hackers breached the mail and marketing servers of Ledger and managed to steal 1 million user emails, but no user funds were compromised as this was only a data leak.
Cloud mining enables everyday investors to mine for cryptocurrency without having to purchase costly hardware. When you know that you might mine Litecoin like Bitcoin from the comfort of your own home without having to invest in exorbitantly priced machinery, it can be very profitable.
Of course, there are legit crypto cloud mining websites like Genesis-mining which offer a real service and the mining of cryptocurrencies is actually occurring.
Hackers have long used malware to acquire credentials to control computer servers, steal debit or credit cards, etc., and bank account details. They're now also using it to inflict the most popular Bitcoin scams.
How to Avoid Cryptocurrency Fraud
Cryptocurrency transfers are permanent, which means that if you transfer cryptocurrency to something like a third party, you can't avoid or undo the transfer.
You should be confident of the integrity of any involving third-party providers as well as retailers before sending cryptocurrency and therefore only transfer cryptocurrency to organizations you know.
Do not succumb to the temptation to buy right away. Fraudsters often attempt to instill a false urgency in the public over a potentially trendy currency.
Until supplying credit card details, wiring funds, or sharing confidential personal information, research the exchange that you plan to trade on.
Don't purchase virtual currency centered on unofficial tips from discussion forums or social networks.
Tip: If anything seems too incredible to be real, it most likely is.