Non-fungible tokens (NFTs) are assets that can represent real or digital goods and whose ownership is recorded in a blockchain. In the last several years, there has been a huge explosion in the amount of NFTs created and sold. Either the rental will never earn you any money, or the criminal will use it to mine cryptocurrency for themselves.
If you need to access your account, you should do it through other means, like typing the URL manually or using bookmarks. The comments, opinions, and analyses expressed on Investopedia are for informational purposes online. As of the date this article was written, the author does not own cryptocurrency. If the whitepaper reads like a pitchbook and outlines how the funds will be used in a project, it is likely a scam or an ICO that should be registered with the Securities and Exchange Commission. For further perspective, in early 2023, the International Monetary Fund found that trillions of dollars of value in cryptocurrencies have been lost following platform collapses.
Sometimes, fraud may not be obvious until you conduct your due diligence or think critically about an opportunity. Many investors fell victim to FTX, a popular cryptocurrency exchange founded by Sam Bankman-Fried, also known as SBF. SBF was found guilty of wire fraud, conspiracy to commit wire fraud, conspiracy to commit securities fraud, conspiracy to commit money laundering, and conspiracy to commit commodities fraud.
Louis Mezza was recently charged for the kidnap and robbery of his friend in an alleged case of cryptocurrency theft. Reports state that after luring his victim into a minivan, Mezza used stolen keys to enter an apartment, obtain a digital wallet, and transfer $1.8 million worth of ether. Ukrainian hacker group, Coinhoarder, used Google ads to direct people to domains impersonating legitimate wallet site, Blockchain.info.
Mining scams
You have to be careful because some fake exchanges are very similar to the original ones. They may look legitimate at first glance, but their goal is to steal your money. The website might even have celebrity endorsements or testimonials that are fake. “If you browse your social media handles, you will come across sites that advertise cheap Bitcoin (BTC),” says Martin Leinweber, digital asset product strategist at MarketVector Indexes.
Crypto scam success rates and takeaways
However, if your device is infected with a copy-and-paste malware, the scammer’s address will automatically replace Bob’s address at the moment you paste it. This means that as soon as your bitcoin transaction is sent and confirmed, your BTC payment will be in the scammer’s hand and Bob will receive nothing. Copy-and-paste malware is a very sneaky way for scammers to steal your funds. This type of malware hijacks your clipboard data and, if you aren’t careful, you will send money directly to scammers.
Coin mixing services
These loan protocols work quickly, so scammers have to be able to take out these loans, siphon off the profits, and then dump the coin back into the market, lowering the value. Romance cryptocurrency scams follow the same approach, but the funds are requested in cryptocurrency how to begin bitcoin mining for newbies and are much more difficult to reverse. Cryptocurrency and Bitcoin scams can jeopardize your finances and put your identity at risk if you aren’t aware of the ways that people can try to take advantage. Keep reading to learn more about these scams and tips to avoid cryptocurrency fraud. Fraudsters are aiming to access your account details, including your crypto keys.
How To Report Cryptocurrency Scams
The tried-and-tested “Nigerian prince” scam has also migrated into the world of cryptocurrency. In a similar vein to phishing scams, keep an eye out for fake Bitcoin exchanges. They might walk and talk like a reputable exchange, but they’re merely a front to separate consumers from their hard-earned cash. Once you enter your account details on this unofficial page, the scammers have everything they need to log in to your real account and steal your funds. Known as “phishing,” this type of scam occurs when you receive an unsolicited email that looks as if it’s from your bank — or, in this case, from your crypto exchange or wallet provider.
Others try and obscure this deficiency by making things confusing and “technical” to try and bamboozle potential investors. Don’t ever respond to or answer calls or messages from scammers even if you want to tell them to stop. Interacting just tells them that you’re real and that they just need to try again in a different way. Typically, the ransomware will block access to important files or databases and threaten to delete them if the payment is not received before the deadline. But unfortunately, there is no guarantee that the attackers will honor their promise. Usually, scammers will include a message asking you to take urgent action to secure your account or funds.
These platforms don’t own the hash rate they claim to and don’t deliver the rewards after receiving your down payment. While cloud mining isn’t always a scam, to keep your money, you must conduct rigorous due diligence on the platform before investing. Scammers often use dating websites to make unsuspecting individuals believe they are in a real relationship, whether a new or long-term one. If you know how to spot a cryptocurrency scam, you can stop a cryptocurrency scam. Dealing with scammers and their slew of cyberattacks shouldn’t be a part of the equation.
- During the period between its launch in August 2017 and its suspension in December 2017, the Plexcoin ICO accrued $15 million in investments.
- Some promise astronomical (and implausible) returns and fail to disclose a range of hidden fees, while others are fronts for Ponzi scams and are simply designed to part you from your money.
- Similar to Romance Scams described above, this version instead uses the trust that’s built up to encourage the victim to “invest” in crypto.
- Legitimate businesses will not correspond with you via social networks or text messages.
For example, you wouldn’t open up a bank account with an institution you’ve never heard of. Similarly, you shouldn’t hand over money to an exchange that just happened to pop up in your Facebook feed. In navigating the treacherous waters of cryptocurrency, understanding how to spot a Bitcoin scammer is not just a skill, but a necessity.
If you’re considering investing in cryptocurrencies, you need to be in-the-know. Some investors falling for the pump and dump and exit scams we mentioned earlier often go off social media tips or read price spikes as signs to get in. Learning a little more about the market before jumping in will likely save you a lot of money and stress.
