10 Common Crypto Scams and How to Avoid Them

AdobeStock_423401622-300x199Cryptocurrencies are a very rich field for scams nowadays. There are dozens of crypto scams because cryptocurrencies are confusing, yet many people are very curious about virtual currencies.

As the price of cryptocurrencies continues to surge, so does the number of crypto scams. Cryptocurrency scams can take various forms and are constantly evolving, which is why many unsuspecting people and companies fall for them.

The Most Common Crypto Scams to Avoid

In addition to the 10 crypto scams listed below, there are many other scams that did not make a list.

1. Theft by Hacking

Hackers can hack just about anything these days, including digital wallets, companies that create coins, and even exchanges. While no one is immune from hacking, it is generally a good idea to avoid putting all of your funds and savings into one account, digital wallet, etc.

2. Giveaway Crypto Scams

Giveaway scams are a new trend in the crypto industry. Fraudsters come up with all kinds of giveaways, including posing as celebrities and pretending to be famous investors, to get unsuspecting people to them their coins. These scams often tend to appear in various forms of social media, such as WhatsApp, Twitter, WeChat, Telegram, and other messaging apps.

3. Phishing

Phishing is a classic type of scam that involves sending emails aimed at misleading users and stealing their personal information. An email may seem like it came from a legitimate cryptocurrency company when, in reality, it was sent by a fake company with the intent to steal your money.

4. Fake Cryptocurrency Wallets

Hackers came up with a scam to sell fake crypto wallets online. These fake wallets then steal users’ coins instead of storing them. Fake cryptocurrency walls can be sold through mobile apps or on websites.

5. Exit Scams

Also known as an initial coin offering (ICO) scam, an exit scam involves fraudsters who pretend to have created a promising new type of cryptocurrency that will generate big returns. However, once enough money has been collected, the fraudsters vanish with investors’ funds.

6. Social Media Scams

Social media accounts are vulnerable to hackers, not to mention that hackers can create fake accounts posing as legitimate sources. Many people fall for crypto scams when they trust offers that come from social media accounts, including on Facebook and Twitter.

7. Ponzi Schemes

The Ponzi scheme is a popular scam that involves the promise of profits from funds contributed by new investors. The more investors you recruit, the more you can make. The promise of quick and risk-free investment returns makes many people fall for this scam.

8. SIM Hacking

Hackers can get into your cryptocurrency wallet by hacking your cellphone or SIM. An effective way to prevent SIM swap scammers from stealing your bitcoins is to avoid responding to text messages, calls, or emails that request your personal information.

9. Cryptojacking

Cryptojacking refers to hackers secretly using your computer to mine cryptocurrencies. Cryptojackers can create large, powerful mining pools by using the computers of unsuspecting users. Usually, installing an ad-blocker will help fend off most cryptojacking scripts.

10. Crypto-Stealing Malware

Last but not least, hackers can put “worms” into your crypto accounts by making you install malware on your computer or phone. Malware can steal your personal information and result in the loss of your crypto coins. Avoid clicking on any malicious links on websites, social media, or emails.

Call Us Today to Speak to a California Securities Attorney

Before considering any type of cryptocurrency transaction, be sure that your business has dependable legal advice from an experienced California securities lawyer. The California securities attorneys at Structure Law Group know how new technologies are treated under existing securities law. Call (408) 441-7500 or contact us online to schedule a consultation.