Monday Jan 30, 2023

Scams and frauds with cryptocurrencies

Scams and frauds with cryptocurrencies

Cryptocurrency criminality is, unfortunately, on the rise. There are many scams and frauds with cryptocurrencies. Scams involving cryptocurrency include:

Phony websites: Scam sites with fake testimonials and crypto jargon that promise huge, guaranteed profits if you keep investing.

Virtual Ponzi schemes: Cryptocurrency thieves offer fictitious opportunities to invest in digital currencies and create the illusion of high returns by repaying old investors with money from new investors. Before its offenders were charged in December 2019, one fraudulent organization, BitClub Network, had raised more than $700 million.

“Celebrity” endorsements: Scammers act as millionaires or well-known figures on the internet, promising to quadruple your virtual currency investment but instead stealing what you contribute. They might even use messaging applications or chat forums to spread rumors. Rumors that a well-known businessperson is supporting a particular cryptocurrency. But, crooks sell their investment after encouraging investors to purchase and driving up the price, and the currency loses value.

Scams using virtual currencies: The FBI has issued a warning about a new trend in online dating scams. In which con artists persuade people they meet on dating apps or social media to invest or trade in virtual currencies. In the first seven months of 2021, the FBI’s Internet Crime Complaint Centre received over 1,800 reports of crypto-focused romantic scams, with losses totaling $133 million.

Otherwise, fraudsters may impersonate legal virtual currency dealers or set up phony exchanges to defraud customers. Another type of crypto scam involves deceptive sales pitches for cryptocurrency-based individual retirement plans. Then there’s plain cryptocurrency hacking, in which hackers get access to people’s digital wallets and take their virtual cash.

I hope we helped you today with how to avoid scams and frauds with cryptocurrencies.


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