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Types of crypto scams and identifying deceptive crypto projects

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Scammers are constantly on the lookout for new ways to steal hard-earned money, and the huge expansion of crypto in recent years has offered numerous opportunities for fraud. Blockchain data firm Chainalysis reported that thieves stole $14 billion in cryptocurrency in 2021, setting a new record. You should be aware of the risks if you’re interested in crypto. 

Date and Scam

Scammers frequently utilize dating websites to trick naive victims into believing they are in a genuine long-term relationship and as soon as the confidence is established, discussions frequently shift to lucrative cryptocurrency opportunities and the eventual transfer of the coins or account authentication keys. According to the federal trade commission (FTC), nearly 20% of the money wasted in romance scams was in Bitcoin. 

Imposter scams

Many scammers acting as celebrities, established businesses, and bitcoin influencers organize these giveaway scams where they show themselves as legitimate organizations or established people and promise to multiply the bitcoins donated. The illusionary opportunity forces people to act immediately expecting a greater return on their investment.

NFTs and ICOs Scams

Crypto-based investments, such as initial coin offerings (ICOs) and non-fungible tokens (NFTs), have provided scammers with even more ways to steal their money. What’s vital to understand is that, while crypto-based investments or business prospects may appear to be lucrative, they don’t always reflect reality.

Some scammers, for example, establish bogus ICO websites and advise people to deposit cryptocurrency into a hacked wallet. In other cases, it is possible that the ICO is to blame. Founders may distribute uncontrolled tokens or deceive investors about the quality of their products through deceptive promotion.

Scams in Cloud Mining

Platforms will appeal to retail customers and investors to entice them to put money down to assure a continuing stream of mining power and reward. These sites do not genuinely control the hash rate they claim to and will not fulfill the rewards after your initial investment. While cloud mining is not always a scam, due investigation of the site is required before investing.

Business opportunity scams

The ancient saying “If it sounds too good to be true, it probably is” still holds, and it is worth remembering for anyone considering investing in general. This is particularly true for cryptocurrency. Countless profit-seeking speculators gravitate to deceptive websites that offer so-called guaranteed returns or other schemes that need investors to commit big sums of money to receive even larger guaranteed returns.

Summing up

Many people have compared the frenzied rush into cryptocurrencies to the Wild West. As the crypto ecosystem grows in size and complexity, it will surely become a target for scammers.

Socially engineered campaigns to get account or security information, and having a target to pay cryptocurrency to a compromised digital wallet are the two types of crypto scams.

You should be able to recognize a crypto-related scam early and avoid it from happening to you if you understand the common ways that scammers try to steal your information.

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