Fraud is part of the crypto world, but it’s not all bad. In fact, learning how scams work is an important way to protect yourself from being ripped off.
Attract crypto users with an initial coin offering (ICO).
An Initial Coin Offering (ICO) is a way to raise money for new cryptocurrency projects. You create a new digital currency and sell it to people who want to use the product or service you built.
ICO is independent not regulated method of raising money for business ventures, and investors are often attracted by the promise of significant capital gains when they are successful (or claims about how much demand there will be for the currency).
Let crypto users do the work for you
One of the oldest scams in the book is also one of the most effective. The scammer will pretend to be a representative of some organization and then ask for more information about you. Then, the scammer will tell you that they need this information to verify your identity or claim that they cannot verify your identity unless they have more information. What happens next, however, is that scammers can use this information against you later down the road.
One example of this type of fraud is when scammers ask the user for a credit card number to charge an additional fee on top of the initial payment after processing.
Another typical example of a scam is when someone asks you to log into a website using your Facebook credentials so they can send you an email with a link or attachment.
In both cases, people cannot trust others online with personal information such as passwords and bank account numbers. If someone is working on these details, then there is nothing stopping them from doing whatever they want.
Buy into a coin pumping scam
You may have heard the term “pump and dump,” which refers to a group of people buying coins that are being pumped. The idea is that when enough people believe in the coin, the price will go up. If that happens, you can sell your coins at a profit.
But there are some risks with this strategy. If you buy something that isn’t good or has no future potential, the price won’t go up, and you’ll lose money! So before you do anything else with your hard-earned cryptos, research what you’re buying and make sure it’s legit!
Create a hard fork of the top currency and scam unsuspecting users
If you want to cheat the crypto world, there is an easy way.
Make a hard fork of the above currency and make a lot of money.
Here’s how it works. First, create your coin with the same name as an existing currency. People will buy these new coins because they think they are getting the original at a discount.
Then trade old coins for them. Finally, sell all new coins for cash on another exchange so that no one can sell them back to real money later.
Scamming is bad, but it’s better to know how it works.
- Knowing how to scam can help you protect yourself from being scammed by other users.
- You should not respond to spam or phishing emails. If you do, the scammer will have access to your computer (or phone) and can use it for malicious purposes such as stealing personal information or installing malware on your device that records everything you type and takes photos with the camera without your knowledge.
We hope this article helps you understand how crypto scams can be done, how you can prevent them, and some examples of scams that are done.
Fraud is not only bad for those who fall victim to it, but it also hurts those who want to invest in cryptocurrency but feel insecure.
By knowing what scamming looks like and knowing how scammers try and cheat people out of money, we can all do our part to prevent this scheme from taking root.
None of the information on this website constitutes investment or financial advice and does not necessarily reflect the views of CryptoMode or its authors. CryptoMode is not responsible for any financial losses incurred by the actions of the information provided on this website by the author or the client. Always do your research before making a financial commitment, especially with third-party reviews, presales, and other opportunities.