DeFi crime is continuously growing with the growing adoption of Bitcoin, crypto, NFTs, and other DeFi solutions. According to report by Elliptic, losses due to theft and fraud in DeFi space are accelerating, with losses totaling $10.5 billion in 2021 to date, up from $1.5 billion in 2020.
Bitcoin scams manifest illicit acts in many forms. For example, scammers occasionally employ social media tricks and even pose as one’s online romantic interest to deceive users into giving access to their Bitcoin funds. Another common tactic is using bitcoin employment or business scams, which prey on unwary job searchers by promising them phony positions and sending them to bogus websites. These frauds then force customers to give up cryptocurrency in exchange for employment with the company.
According to another report by Crystal Blockchain, $2.8 billion has been stolen through security breaches and $4.8 billion has been stolen through scams, so more than $7.6 billion worth of Bitcoin and other digital assets in total has been stolen between 2011 and 2020.
Users must understand who is requesting their crypto information upfront. In addition, they should be alert enough to spot Bitcoin scams. Trading on a secure and reputable platform is a surefire way to guard yourself against cryptocurrency scams.
What are the most typical Bitcoin and Crypto frauds?
A cryptocurrency exchange where you have virtual currency stored safely may be at risk from hackers. Threat actors have taken money from significant companies countless times, sometimes getting off with hundreds of millions. Unfortunately, victims of bitcoin scams should not rely on any guarantees. As a result, if you fall for a scam, you could lose a lot of money.
It is beneficial to be aware of how these frauds operate. Here are a few of the most widespread Bitcoin scams:
Ponzi schemes
In this kind of financial fraud, victims are duped into funding a fictitious business or “get a rich quick” scheme that, in reality, serves only to line the pockets of the con artists. Since fraudsters are constantly creating new, ambiguous “cutting edge” technology to draw investors and increase their virtual earnings, cryptocurrency is the perfect solution.
To pump and dump
Scammers use fake information to persuade investors into purchasing cryptos from obscure cryptocurrency businesses. Then, following an increase in the cryptocurrencies’ price, the con artist sells their investment for a healthy profit, leaving the victim with worthless securities.
Fake transactions
Fraudsters post on social media or send emails claiming to have access to virtual money via their cryptocurrency exchanges. The only drawback is that users typically pay a small upfront fee. After that, their money is permanently lost because the business doesn’t exist.
False app stores
Hackers forge authentic bitcoin apps and publish them on app stores. Installing one can steal your financial and personal information or infect your device with malware.
Phishing/impersonation
One of the most recurring methods used by fraudsters is phishing. Spoofing is the process of making emails, texts, and social media posts seem to have come from a reliable, trustworthy source. This “source” may occasionally demand payment in cryptocurrencies, asserting to be from a bank, credit card company, or government agency. Then, they’ll try to push you into making snap decisions.
How bitcoin scams work?
In a cryptocurrency scam, thieves steal money from victims who actively invest in or use the new digital currency for transactions.
It can be very challenging to recover your lost bitcoins because most crypto assets aren’t regulated or monitored by the government. Unfortunately, this issue is also the cause of the increasing number of scammers who bravely enter the cryptocurrency industry and prey on the trust of their clients without any fear.
Scams with bitcoins typically fit into one of the following categories
Gaining entry to someone’s wallet
These include frauds where thieves steal the victim’s login information from their accounts or digital wallets. Additionally, scammers may try to access physical hardware or sensitive information like security codes or secret keys.
Transfer or steal bitcoin directly
In these schemes, scammers transfer cryptocurrency directly from their target’s wallet to their wallet by impersonating someone, offering false business opportunities, or using other shady techniques.
Bitcoin Scam Warning Signs
Scams involving cryptocurrencies like bitcoin are increasing all over the internet. You risk losing a lot of funds if you make the wrong investing decision or are caught off guard. However, bitcoin scams frequently share specific characteristics, making them easy to recognize with the correct knowledge.
Guaranteed or extremely high return claims
Making up fictitious promises of rewards is one of the ways con artists lure money into their schemes. Steer clear of initial coin offerings (ICOs) when a new cryptocurrency is formed and individuals are given a chance to buy some at an early state and affordable price.
Heavy advertising and marketing of offers
Another method that bitcoin scammers use to draw victims is spending heavily on marketing. It’s all geared to reach as many people as possible in the shortest amount of time, raising money quickly, including full-page spreads in newspapers, enormous banners on websites, and a swarm of sponsored bloggers.
Team members who are unnamed, hazy, or even nonexistent
You should have no trouble determining who is in charge of a cryptocurrency, including every team member, just like when you research for any other business or investment.
It implies that you can further research on them, including checking out their background and social media sites to see who follows them, how many followers they have, and other information.
Without a published code
Don’t let this one scare you off. Few people are competent enough to read a cryptocurrency’s code base. However, the code is what makes cryptocurrencies function, and the majority of trustworthy teams will publish their source code as “open source.” As a result, anyone may read, edit, and verify whether it is what the authors claim it to be.
Unusual investment packages
You can have the option to subscribe, invest a set sum, and receive a return every day or every week. Unfortunately, this return is frequently unsustainable and will most likely decrease or cease entirely.
Tips to protect yourself from being scammed
The best defense against any fraud is being suspicious. But unfortunately, not everything we read online is true in this day and age. And a good deal of it is purposefully designed to deceive and hurt us. Keeping that in mind, attempt the following strategies to prevent fraud:
Protect your digital wallet
You’ll need a digital wallet and private key to access it while investing in cryptocurrencies like Bitcoin or conducting other crypto transactions. If a website or business requests that you disclose your private keys under some circumstances, it is a fraud, and you should stay as far away from it as possible. Never give anyone access to your digital wallet’s secret keys.
Watch your wallet app closely
Sending a small quantity of money for the first time will allow you to verify the reliability of a cryptocurrency wallet program. If you observe strange behavior while updating your wallet app, stop updating and delete the app.
Just invest in items that you are comfortable with
It is essential to take a break and conduct an additional study if you are unsure how a specific cryptocurrency operates before deciding whether to invest in it or not.
Observe patience
Scammers frequently employ high-pressure techniques to get you to invest your money right away, such as rendering bonuses or discounts if you do so right away. So before making any purchases, take your time and do some independent research.
People should avoid Ads on social media
Bitcoin scammers frequently advertise their fraudulent schemes on social media. For example, they may use unlicensed pictures of famous people or prominent entrepreneurs to give the impression of credibility or make promises of freebies or free money. So when you see cryptocurrency prospects touted on social media, keep a healthy dose of skepticism in mind and conduct your research.
Avoid cold emails
If someone exposes you out of the blue to a “great” investment opportunity in cryptocurrencies that looks too good, it probably is. Never provide your personal information or log into your digital wallet through strange links found in emails as they are most certainly scams.
Do Your Own Research (DYOR)
The most well-known cryptocurrencies are likely to be legitimate. However, research properly if you’ve never heard of a specific cryptocurrency. Check to see if there’s a whitepaper you can read, learn who controls it and how it functions, and check for honest reviews and endorsements. Find an accurate and reliable list of bogus cryptocurrencies to check for scams.
The Last Resort
There are chances that despite taking all the safety measures you might end up your crypto getting stolen. In such a scenario, Bitcoin and crypto recovery firms can help you recover your lost cryptos.
As we enter into metaverse era, owing Bitcoin and other cryptos is becoming normal, but defending yourself from crypto scams is just as vital as to maintaining and growing your crypto portfolio. Bitcoin and crypto scams are a brand-new category of online fraud that you must be aware of.
Unfortunately, due to decentralized nature of cryptocurrencies, recovering Bitcoin or other cryptos from a con artist can be exceedingly challenging. Thankfully, some professionals companies like Financial Fund Recovery specialize in doing so and have a proven track record of reclaiming stolen Bitcoin and other cryptocurrencies from scammers.
To know more about Financial Fund Recovery visit https://financialfundrecovery.com/
Disclaimer. AlexaBlockchain does not endorse any content or product on this page. While we aim at providing you with all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor can this article be considered as an investment advice.
