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Cryptocurrency News Articles
The 5 Most Popular Crypto Scams to Watch Out for in 2024
Oct 11, 2024 at 05:06 am
Every bull market takes crypto to new heights. The total cryptocurrency market capitalization right now is sitting above $2 trillion as prices rally to new peaks
Every bull market takes crypto to new heights. The total cryptocurrency market capitalization now sits above $2 trillion as prices rally to new peaks, creating a lot of euphoria and FOMO (fear of missing out) that brings tons of capital into the space.
All this activity and life-changing gains lead to fraudulent practices, which tend to reach new highs in bull markets in tandem with prices. So, if you don't want to risk losing your money, then it's extremely important that you know all about scams permeating the cryptocurrency sector before it's too late.
The Rising Crypto Scams
While crypto adoption is rising rapidly, which, according to $10 trillion asset manager BlackRock (BLK -0.03%), is surpassing that of the internet and mobile phones, it remains nascent still. The world of blockchain is complex, making people more susceptible to manipulation. Add the highly speculative nature of crypto, and it will become increasingly attractive to scammers.
Not to mention, whenever there's money involved, scams follow. So, with that, scams in the crypto sector have been thriving.
According to the Better Business Bureau's annual report about the biggest scams of 2023, about 80% of Americans targeted in cryptocurrency and investment scams lost money, with the medium dollar amount lost being $3,800.
Hackers are using text messages, social media, and video game platforms to brag about crypto investments, and after the targeted victim replies, they pressure them to buy, trade, or store crypto on fraudulent platforms.
Blockchain analyst Chainalysis meanwhile states in its Crypto Crime Report that 2022 was the biggest year for crypto theft, with $3.7bln stolen, which dropped to $1.7 bln in 2023.
Now, in 2024, crypto scams are on the rise, with Chainalysis noting that scammers are “adapting on- and off-chain to conduct more devastating scams of shorter duration.” Also, much of the total scam inflows so far this year have gone to wallets that only became active in 2024, “suggesting a surge in new scams.”
So, what are crypto scams? Well, it refers to any fraudulent practice aimed at tricking individuals into giving away their funds, assets, or sensitive information. Using deceptive schemes, perpetrators exploit common human emotions such as fear or greed.
Crypto scams can take many forms. Ponzi schemes are a popular type of multi-level marketing that encourages investors to make risky investments. While they promise high returns and low risk, Ponzi schemes rely on funds from new investors to pay returns to earlier investors.
A formidable threat in crypto is hacking, and through this method, cybercriminals have stolen over $3.1 bln in DeFi hacks in 2022 and $1.1 bln in 2023. Cases of blackmail or extortion have also been seeing a lot of uptick in crypto.
Then there are all kinds of fake things, too — fake initial coin offerings (ICOs), fake crypto exchanges, fake wallets, and fake apps that look like legitimate projects only to vanish with people's funds.
As AI gains widespread adoption, perpetrators are now even using this tech to exploit the crypto market in new ways.
There are many types of crypto scams, but there are some prominent ones that are currently being used extensively by fraudsters to trick you out of your money. Let's take a look at five crypto scams that you must be mindful of:
1. Phishing
In this type of crypto scam, scammers use messages, bogus websites, and spam emails to trick users into giving them their private information, which is then used to steal from victims or to sell this information.
Crypto phishing scams often target crypto exchange accounts. For this, scammers use malware-infected software or hacking to steal from people. They also use phishing links, which are legitimate-looking, malicious links that entice the recipient to click on them in order to steal unsuspecting victim's information, such as login credentials.
Online wallets are also popularly targeted by scammers, who go for private keys that allow them access to funds within the wallets. Much like with other phishing attempts, here as well, the scammer sends an email to recipients. After clicking on it, they are redirected to a special website. The site asks the victim to enter their private key information, and once the attacker obtains it, they steal the user's funds.
In order to induce people to share their sensitive information, scammers mimic trusted platforms. They also create a sense of urgency — like claiming your account is compromised, exploiting human vulnerabilities, and coercing unsuspecting victims into surrendering their crypto.
For instance, the popular Ethereum wallet MetaMask has been the subject of multiple phishing scams, including KYC verification requests, airdrops, and more. Back in 2020, the popular hardware wallet brand Ledger suffered a data breach, which led
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- Bitcoin (BTC) Bulls See Altcoin Season Coming; ETFSwap (ETFS), Pepe (PEPE), EigenLayer (EIGEN), and Neiro (NEIRO) Top Their List of Most Promising Altcoins
- Oct 11, 2024 at 10:15 am
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