Can You Get Scammed on Cryptocurrency?

crypto currency

According to a recent analysis, cryptocurrency crime set a new high in 2021, with scammers stealing $14 billion worth of cryptocurrency.

What Are Some Popular Cryptocurrency Scams?

Swyftx.com is a trusted and low-fee crypto platform for both beginner and experienced New Zealand-based investors and established in 2017.According to the Federal Trade Commission (FTC), around 7,000 consumers in the United States lost upwards of $80 million in crypto scams between October 2020 and March 2021, based on scam reports filed in the United States. That’s an increase from the 570 bitcoin investment scams and $7.5 million in losses experienced in the same months the previous year. Here are several scams to keep an eye out for:

Requiring Crypto-Only Transactions

It’s most likely a scam if a seemingly trustworthy person or retail establishment declares they don’t accept any currency other than Bitcoin or Ethereum. As Bitcoin and other coins are a new asset, analysts fear that respected institutions will refuse to accept crypto unless the acceptance of US dollars accompany it.

Anyone demanding Bitcoin as payment may be trying to stockpile it and profit from its rising value. Unlike banks, blockchain does not have typical Know-your-customer (KYC) procedures. Customers can access their wallets without having to produce IDs or Social Security Number. Blockchain is available to the public and provides permanent, open-access records.

Fake or Anonymous Identities

According to Jonathan Padilla, former PayPal head of blockchain strategy and CEO and co-founder of Snickerdoodle Labs, a California-based blockchain data security company that’s looking to use blockchain to give consumers ownership of their cookies and browsing data, the lack of KYC protocols on the blockchain is a significant question mark for its widespread use. “There are no controls in place with a decentralized platform to indicate who is a good actor and who is a terrible actor,” Padilla argues. “It’s just a case of buyer beware.”

A driver’s license, a Social Security number, or an address and phone number are acceptable forms of identity. Even though blockchain is accessible to the public, anybody can deal with it anonymously, making it easier to defraud you, take your money, and flee.

Games and Digital Collectibles

As we saw with the “Squid Game” hoax, sophisticated coders can create new games and imagined worlds on a blockchain. Obtaining a form of newly minted coin or token for a game is an easy way to deceive newcomers. The initial con artists can sell all of their assets and vanish.

crypto currency

Unlike bank accounts for federally controlled currency, there is no fraud protection or FDIC insurance on the blockchain. When your money is stolen on the blockchain, the only way to get it back is for the recipient to pay you directly. On a decentralized exchange, this is highly unlikely. Although larger crypto exchanges have more robust fraud protections than smaller ones, investors are still in danger of losing their money. 

The creation of new forms of cryptocurrency is ongoing, and when new currencies are published onto the blockchain, it’s known as an initial coin offering (ICO) (ICO). ICOs, on the other hand, can be utilized to commit fraud. A company or an individual may advertise a once-in-a-lifetime opportunity to invest in a new type of cryptocurrency with guaranteed returns of 1,000 percent. They may try to persuade you to deposit a massive number of new coins into a compromised digital wallet or to “pump and dump,” which involves buying and selling a coin when the price skyrockets.

The Romance Industry

 On dating apps, there are a plethora of cryptocurrency scams. According to the FTC, romance scams account for about 20% of all money lost. Long-distance connections are used in scams like this, in which one side urges and persuades the other to buy or provide money for a new cryptocurrency that is simply a technique to defraud people.

Scams Including Phishing

It is a scam that is as old as the internet but has some other consequences with cryptocurrency. Scammers send emails to lure recipients into clicking links and putting personal information, like crypto wallet keys. Unlike passwords and usernames, you get one private key to your blockchain wallets. Blockchain’s decentralized nature ensures no single entity has authority over your data, but it can be inconvenient if you need to alter your key.

Way Forward

The Global Payback is a firm that can help you recover your lost funds; make sure to contact them as soon as possible if you’ve been scammed! From cyber investigation to digital tracking, they devise a mechanism that refunds 99.99 percent of a victim’s lost money.

By Admin

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