Consumer beware: With Bitcoin trading If the cash is well above $90,000 this month and approaches the $100,000 mark, cybercriminals shall be making their rounds.
“This will lead to a lot of FOMO and a lot of urgency around investing in Bitcoin and paying with Bitcoin,” said Eva Velasquez, president and CEO of the Identity Theft Resource Center. Scammers “love, love, love to exploit external events, cause confusion, create a sense of urgency and steal your hard-earned money.”
To make matters worse, legitimate strategies for getting cash with Bitcoin are being publicly discussed by reputable sources. This, coupled with technological advances in AI, is making scams seem more real, even to more sophisticated investors, industry experts say.
The stakes are especially high considering the Federal Bureau of Investigation's Internet Crime Complaint Center has received greater than 69,000 complaints last yr related to cryptocurrency fraud, with losses estimated at over $5.6 billion. The losses related to these complaints accounted for nearly half of the overall reported fraud losses.
With that in mind, here's tips on how to spot and avoid the newest crypto scams:
“Elon Musk won’t double your money”
Common scams today include fake bonuses in exchange for an initial investment, fake coin promotions, phishing emails or texts that appear to return from legitimate crypto corporations or exchanges, Ponzi and pyramid schemes or “pig slaughter” scams, where scammers construct trust over time. They often pose as friends or romantic partners before convincing their victims to take a position in fake crypto platforms.
Well-known names corresponding to crypto enthusiast and Tesla CEO Elon Musk are sometimes mentioned within the plans. Scammers have broadcast fake videos of Elon Musk including fake live streams that make it seem to be he’s talking about certain cryptocurrency opportunities. In one such scam, thieves attempted to trick investors into scanning a QR code before the “livestream” ended. Accordingly, investors were promised twice the quantity of cryptocurrency that they’d deposited a report from Engadget.
“Elon Musk won’t double your money if you send him cryptocurrencies,” said Merrick Theobald, vp of selling at BitPay, a cryptocurrency payment service.
Scams like this are prone to increase as Musk, at all times within the news, plays a good more distinguished role in President-elect Trump's entourage and has been chosen to co-head the proposed Department of Government Efficiency. The Trump administration can be expected to be a tailwind for crypto, with pro-crypto laws expected to be one in every of the primary legislative efforts to be taken up in a brand new Congress.
Coinbase warns that scammers will prey in your fears
Fraudsters also use fear to trap their victims.
Coinbase has observed several scams wherein cyber thieves send an SMS claiming that a crypto owner's account has been compromised. When the user responds to the text, scammers attempt to spy additional information corresponding to the crypto owner's seed phrase, which allows the thieves to empty the account, said Jeff Lunglhofer, Coinbase's chief information security officer. People fall for it because all the pieces seems plausible and the scammers persuade them that their assets are in danger, he added.
If you receive a text message or email claiming there may be an issue along with your crypto account, don’t respond or click on any links. Instead, go on to your provider's website or call the phone number is related to the provider to inquire about your account, Theobald said.
Be skeptical of one-off promotional offers
Scammers sometimes send emails or post ads on social media offering one-off promotions for investing in cryptocurrencies. These ads often appear to be legitimate offers from reputable corporations that individuals could also be aware of or have done business with previously, said Howard Greenberg, president of the American Blockchain and Cryptocurrency Association, a nonprofit trade association.
But there could also be a letter missing from the URL, and whenever you click on it, you see something that appears very much like the legitimate site's home page, confusing people much more, Greenberg said. In reality, crypto owners enter their credentials on a fraudulent website. “Before you know you’ve signed up for a fake website, your money is gone,” Greenberg said. “There’s no way to have a dispute like you can with a credit card.”
To avoid this problem, he recommends bookmarking the web sites of the legitimate providers they use. This way, investors can go there directly to purchase crypto and never by chance fall right into a scam by clicking on another person's link. Additionally, he recommends only buying cryptocurrencies on reputable exchanges, which include Coinbase and Gemini. “They don’t want to use night-time exchanges from Liechtenstein,” Greenberg said.
How families are cheated
There's the saying, “If it sounds too good to be true, it probably is,” but in the case of crypto scams, people still attack. Sometimes it's because they don't recognize the warning signs. This includes offers that appear too good to be true, pressure tactics or unrealistic guarantees of returns. Somewhat homework can save lots of money and headaches, say industry experts.
Yaya Fanusie, director of anti-money laundering and cyber risk policies on the Crypto Council for Innovation, reported that a member of the family was recently scammed by a crypto scammer. The company, supposedly founded by a well known mathematician, advertised a guaranteed return on investment of 150%. Fanusie did research on the relative's behalf and discovered that the supposedly famous mathematician only had a number of dozen followers on LinkedIn. Fanusie was also suspicious due to the high investment guarantee and since his relative was asked to speak with the corporate via WhatsApp, which is end-to-end encrypted and offers additional protection to fraudsters.
Another red flag is when a company demanding money claims crypto is the one payment option, Velasquez said. “I would be very, very suspicious of any transaction where you can only pay with cryptocurrency.”
Conduct detailed research on latest tokens and cryptocurrency corporations
Fanusie recommends potential investors search the Internet for background information on any company they want to do business with, including where and once they registered. He also urges potential investors to envision out Fincen's website to find out whether the provider you’re considering is regulated as a money services business. If an organization claims to be an investment company, it's value checking with them SEC to see if it's registered, he said.
“You can’t believe what they say,” he said.
Potential investors also needs to take the time to make sure that any digital coin they want to buy is legitimate. If the token is just not listed on a mainstream website, it might not be legitimate or unclear and subsequently riskier. One method to check the legitimacy of a token is to list it on price tracking sites corresponding to: CoinGecko or CoinMarketCap.
“If you do a little checking, you often find that things are not always what they seem,” Fanusie said.
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