According to TIME magazine, scammers stole cryptocurrency worth $14 billion in 2021. This figure was nearly double the amount stolen in 2020, a massive $7.8 billion. Each year the number of financial scams being reported is rising. This high rate is closely connected to the fact that our everyday lives depend heavily on technology, and we live in an increasingly digital world. Consequently, scammers have found new ways to steal money from people while keeping their identities hidden, making it challenging to trace them. There are advancements in technology, but there are also loopholes in the system that scammers use to their advantage, making monetary transactions susceptible to fraud.
Top 3 Reasons Investors Fall for Crypto Scams
- Lack of expertise in trading
- Lack of knowledge regarding cryptocurrency
- Eagerness to earn big money fast
Scammers take advantage of the three reasons given above and make promises of risk-free and high returns on investment to people. However, beginner traders may not be aware of certain features of cryptocurrency. Firstly, cryptocurrency is part of a highly volatile market, i.e., it keeps changing. This feature suggests that risks are involved, and high returns on investment are not ensured. Secondly, it is a decentralized money market, implying an authority like the government does not control it. Hence, you may suffer financial losses while trading.
So how can you avoid cryptocurrency scams? We first need to be able to identify the scams to prevent falling victim to them.
How to Spot Crypto Scams
- Cryptocurrency demanded as a payment method instead of the usual paper currency
- Asked to share “private keys” needed to access cryptocurrency stored in a digital wallet
- Promises of risk-free investment
- Guarantees of high profits in a short period
- Promises of free money
- Unsolicited contact via email, message, or social media about investment opportunities
- Pressurized into making immediate investments or within a given time frame
- Excessive use of celebrity endorsement and testimonials to prove credibility
Apart from these signs for identifying cryptocurrency scams, you should do your own research. For example, search up the basics of cryptocurrency trading, trusted trading platforms, and the most common crypto scam. The information from the research will make you self-reliant and reduce the chances of falling for false information given by scammers, which leads to financial losses. Similarly, it is good to trust your gut about such matters. If the investment opportunity sounds too good to be true, as the high returns on investment mentioned above, it is probably a scam.
Here is a list of the most common crypto scams you need to know
- New Coin Scam
- Mining Scheme Scam
- Celebrity Endorsements
- Phishing Scam
- Crypto Technical Support Scam
What Is The Next Step?
You might have identified possible scams and avoided them successfully; however, that does not affect the scammer, and they don’t face any consequences. Hence, your next step should be to report the scammer to the relevant authorities. Here is a list of verified authorities concerned with online trading scams:
- The FTC at ReportFraud.ftc.gov
- The Commodity Futures Trading Commission (CFTC) at CFTC.gov/complaint
- The U.S. Securities and Exchange Commission (SEC) at sec.gov/tcr
- Action Fraud at actionfraud.police.uk.
Are You an Innocent Victim of a Cryptocurrency Scam?!
What if you were not aware of tactics used by scammers to steal money from people? Don’t worry because this article has the perfect solution for you – Global Payback! It is a company that provides free consultation regarding scams, ranging from Crypto scams to CFD trading scams and much more. They have a team of highly trained professionals who reach out to you once you fill in the contact form on their website. There is a specific team for dealing with every aspect of the case, for example, data miners to collect evidence and legal specialists to file a lawsuit against the scammers. After the first contact, the company helps you build a legal case after gathering evidence of the scam. Moreover, the company is transparent and reasonably fast with the entire process of getting your money back. Hence, your funds can be recovered efficiently with Global Payback!