The general perception of people is that all cryptocurrencies are Bitcoin. However, this is not true. Due to a lack of awareness, when these people invest in cryptocurrencies, they become victims of the cryptocurrency scams.
As the traditional stock markets recover from the pandemic, many are investing in cryptocurrency as an alternative source of income. In addition, some countries like Brazil are already hedging inflation using cryptocurrencies.
Since the global economic conditions are not conducive, many seek refuge in cryptocurrency as it was the only market that proved to survive during the pandemic. But unfortunately, many do not know how cryptocurrency or its market work, and compounding their misery further, they wish to invest without doing any research.
Before you even think of investing in cryptocurrency, you should understand how cryptocurrency-related scams are carried out. So you should be able to understand, identify and avoid falling victim to these types of scams.
Investment scams generally include a fake promise of making significant money with no risk involved. These are pretty common on social media platforms or dating apps or sites. They connect with you via an unexpected text, call, or even email. These involve cryptocurrency in two ways: it can be both a payment and an investment.
Here are some investment scams that run rampant online and a sure sign of spotting them.
- Impersonating an investment manager: They call you out of nowhere and advise you to make quick money if you are to buy some cryptocurrencies and deposit them in their accounts online. These investment managers steer you to a professional-looking site where you are to deposit your cryptocurrencies after opening an account with them. After depositing, when you wish to withdraw your cryptos, either you won’t be able to withdraw them, or a high fee is charged.
- Impersonating a celebrity: They offer you an opportunity to multiply your cryptocurrencies. In reality, scammers open a fake account and try to entice you to transfer your cryptos into their account through a provided QR code.
- The so-called “Love Interest” is begging you to send in some cryptos as that person is in trouble or wants you to invest in some cryptocurrencies by advising you. Know for sure that this is a scam and the person who pretends to be your lover is, in fact, after your money. If you were to send your cryptos to that person, you would be seeing those cryptos for the last time.
- Scammers make a fake account on social media, impersonating celebrities, offering to double, triple, or even more if you were to click on the link and deposit your cryptocurrencies. It would help if you remembered that everything in this world has a price tag and nobody would offer you a free lunch for no reason. If you ever encounter such promises on your social media, then be sure someone is trying to make a victim out of you.
- These scammers entice you into buying or transferring your existing cryptos to an account by impersonating government officials, law enforcement officials, or utility companies. Remember, no law enforcement official or government official will ever threaten you or encourage you to send your cryptos to an “official account.” The government does not deal in cryptocurrencies. If a utility company contacts you and asks for payment in cryptocurrencies, don’t go to the link provided in the email, chat, or a call. Ignore it since no firm accepts payment in cryptocurrencies otherwise mentioned in official public media.
- Scammers are known to impersonate well-known companies like Amazon, FedEx, Microsoft, or even your bank. These imposters will try to convince you that there are problems with your account and will send a link to a portal where you need to either download an app or you need to make payment through cryptocurrencies. Either way, it is still a scam. Never entertain such messages or calls.
- Anyone offering a job in exchange for cryptocurrencies should not be entertained either. These calls are made by scammers faking to be an established business or an unsolicited call where they will be sending a cheque to your bank account, and they want you to buy cryptocurrencies on their behalf. These are all fake promises and should be avoided at all costs to avoid being a victim of that scam.
- Some scammers will send an email convincing you that they have some photos of you in a compromising position, and you need to pay them or they will viral those photos on the internet. You are forced to pay them cryptocurrencies for ransom to avoid embarrassing situations. These are all hoaxes, and you should never fall for such scams. Avoid paying them at all costs.
Reporting scams related to cryptocurrencies.
If you still happen to be a victim or you suspect that you are a victim of some scam, then there are some actions that you must take.
- Contact the Federal Trade Commission (FTC) and report fraud at ReportFraud.ftc.gov and give a detailed account of your encounter with the scammers. They will guide you further regarding the steps you need to take.
- You must also involve the Commodity Futures Trading Commission (CFTC) and complain at CFTC.gov/complaint.
- SEC or the U.S. Securities and Exchange Commission and keep them in the loop about the fraudulent activity which has taken place, contact them at sec.gov/tcr
- Filing a complaint at ic3.gov/Home/FileComplaint at the Internet Crime Complaint Center (IC3)
- Mention the cryptocurrency exchange that was used by you while sending the money.
You can avoid becoming a victim of a cryptocurrency scam if you follow the steps mentioned above. If you ever feel threatened by the caller, drop the call and call local law enforcement. Do not entertain the caller, and do not indulge in revealing sensitive information that can be held against you.
If any business prospectus ever crosses you, then type words like “fraud,” “scam,” “reviews,” and “complaint” individually against the name of the said enterprise or firm.
If you fear you are a scam victim, complain to the officials mentioned in the article.