- Cryptocurrency fraudsters are using some of the most successful techniques to defraud people of hard-earned money.
- The price of bitcoins has dramatically shot up since 2017, and early investors are quite wealthy now.
Some believe that the cryptocurrency is a bubble that might burst anytime, while others do not. But an investment scheme that promises massive returns attracts the interest of a lot of people. Cybercrooks leverage this to convince people to invest in fraudulent schemes and swindle money.
How does the cryptocoin scam work?
Fraudsters promise a new cryptocurrency that people can invest in from the start. This pitch is in the form of an Initial Coin Offering (ICO).
- In many countries, ICOs are loosely regulated, making it quite easy for crooks to make empty promises.
- Tricksters may even go to the extent of using fake testimonials and graphs to seem convincing.
- Fraudsters may run websites that show the new currency increasing in value.
- Some early investors may claim to have got more than they invested. But in many cases, this is just money collected from other investors.
- This essentially means that the currency that was allegedly growing in value, did not exist at all.
What can you do?
Probably the most important rule for staying safe from scams like these is ‘If it’s too good to be true, it probably is’.
- Remember that any website that speaks the language of cryptocurrency may not necessarily be legitimate.
- Discuss withdrawal options including fees, time frames, and any possible restrictions.
- Consult with people who are not a part of the scheme.
- Some schemes claim to be from a legitimate firm, when in reality they’re not. Verify who you’re dealing with before you invest the money.
- Beware of schemes that promise way beyond what investment regulations usually permit.
In the current cryptocurrency market, it’s essential that you must research every aspect of the scheme before investing money into it. Take your time to research before going forward with any crypto scheme.