Home Cryptocurrency News Cryptocurrency Scams and How to Avoid Them

Cryptocurrency Scams and How to Avoid Them

15 min read

When you are involved in the new digital currency schemes called cryptocurrencies, it doesn’t take long to realize that there are risks involved in their trading. And we’re not talking about market volatility. Fraud is rife on the internet, and cryptocurrency exchanges are no exception. As you consider investing in different startups and exchange platforms, be aware of the possibility of losing your cryptocurrency investment.

Here are some of the most common scams and how you can avoid falling victim to them as you participate in the exciting future of cryptocurrency.

1- Imposter websites

Even if you follow the solid advice of an experienced person, you can still fall victim to accidentally visiting a fake website. There are a surprising number of websites that are set up to look like the original valid start-up – if there is no little padlock icon next to the URL bar to indicate security, and there is no ‘https’ in the website address, think twice.

Even if it looks like the same site, you may be directed to a different payment platform. For example, if you click on a link that looks like a legitimate site, the attacker has created a fake URL with a “0” in place of the “o”. The platform is obviously not connected to the cryptocurrency investments you have already looked into. To avoid this, type the exact URL into your browser carefully, we’ve checked it twice.

2- Fake mobile apps

Another way scammers trick cryptocurrency investors is with fake apps that can be downloaded from Google Play or Apple App Store. These fake apps can often be found and removed quickly by the people involved, but that doesn’t mean that they don’t affect a lot of profits. Thousands of people have already downloaded fake cryptocurrency apps, Bitcoin News reports.

3- Bad tweets and other social media updates

If you follow a celebrity or business owner on social media, you never know if you’re following an imposter account. The same goes for cryptocurrencies, with malicious bots posing as them running rampant – don’t trust any offer sent to you from Twitter or Facebook, especially if it has an impossible outcome. Fake accounts are everywhere.

4- Scam emails

Be careful before investing in digital currencies, even if the email looks exactly like the one you received from a legitimate cryptocurrency company. Is the email exactly the same, does it have the same logo and branding? Can you confirm that the email address is legitimately linked to the company? Being able to confirm this is one of the key reasons why it’s important to choose a company with real people working there. If you have any doubts about an email, ask someone who works there. Also, never click on a link in a message that takes you to a website.

5- Telegram Scam

Telegram has become a hotbed for cryptocurrency scammers who try to promote almost any kind of scam. All of the scams we’ve discussed so far in this article could potentially take place on Telegram. From employment scams to gift scams, Telegram allows scammers to connect directly and discreetly with their victims.

One of the most prominent scams on Telegram, targeting users of cryptocurrency exchanges, is the tech support scam. Scammers impersonate major cryptocurrency exchanges, such as Liquid, and “fix” account issues or “update” account security if users reveal their account login information or “pay” by transferring cryptocurrency to a wallet address Offer to help you.

6- Identity theft scams

There have also been cases where scammers have approached non-tech-savvy people who are interested in cryptocurrency trading, offering to help them with the Liquid account opening process. The scammer first obtains KYC documents from the victim and verifies the account. Once the account is opened, the victim proceeds to deposit funds into their new Liquid account. Fraudsters either maintain full access to the victim’s account or use the KYC documents to regain access. They empty the funds in the victim’s account by exchanging them for liquid cryptocurrencies such as Bitcoin, which they then withdraw into their own wallets.

7- Giveaway Scammer

In a giveaway scam, the scammer promises free cryptocurrency as part of a supposed prize and asks you to verify your wallet address by sending some cryptocurrency to a wallet address they specify.

Giveaway scams spread quickly on social media sites such as Twitter and Facebook. Scammers usually use fake accounts to impersonate the Twitter or other social media handles of celebrities, well-known people or popular cryptocurrency companies. To avoid arousing suspicion, scammers may use fake accounts to comment on the official Twitter or Facebook pages of companies or celebrities in an attempt to gain followers. Fraudsters may also hack legitimate social media accounts to carry out giveaway scams. For example, the Twitter hack earlier this year compromised the Twitter accounts of a number of celebrities and companies, including Joe Biden, Elon Musk and Kim Kardashian. These compromised Twitter handles then tweeted links to the cryptocurrency wallets used in the giveaway scam, and by the time the tweets were deleted, the scammers had collected at least $110,000 worth of Bitcoins.

While social media has recently become more aggressive in cracking down on scam posts and fake accounts, scammers continue to devise new ways to promote giveaway scams.

8- Employment fraud

In employment scams, scammers pose as recruiters or executives and place fake job ads for cryptocurrency companies such as Liquid, usually via Telegram. The scammer solicits cryptocurrency from eager job seekers in exchange for training and job-related materials. In some cases, scammers will ask job seekers to participate in the transfer of crypto assets, a transaction that may facilitate illegal money laundering.

9- Phishing scams

The next thing to avoid is phishing scams. Phishing scams are neither new nor confined to the crypto world. Threat actors use phishing techniques to break into password-protected accounts, such as online bank accounts or email accounts. Phishing attacks can take many forms, but the ultimate aim of a phishing scam is to trick the victim into handing over sensitive data or login credentials. Also, as far as the crypto domain is concerned, the aim is to gain access to your crypto assets.

10- Investment fraud

Investment fraud is very common. In this scam, the scammer promises a service or product that offers a high profit or return with minimal or negligible risk. In return, they ask you to transfer cryptocurrency or grant them access to your wallet or trading account. What is too good to be true is often true. Scammers may initially reassure you with the small amount of return they promise, but eventually they take all your assets and disappear without a trace.

  • Tips on how to avoid cryptocurrency fraud
  1. avoid sending your cryptocurrency to unknown external addresses. Liquid will never ask you to send cryptocurrency to an address outside of Liquid for the purpose of “fixing” or “verifying” your Liquid account.
  2. do not send cryptocurrency under the false pretense of confirming your address for a promised gift
  3. don’t be fooled by fake screenshots promoting fake cryptocurrency offers or gifts on social media. Even if you recognize the account handle, make sure the post is actually from Liquid’s official social media accounts.
  4. be wary of websites that promise high returns or unrealistic profits. Do your own research on the provider of the service or product, using consumer protection websites and investor warning lists produced by regulators.
  5. if a website or project claims to be affiliated with, or endorsed by, a reputable organisation such as Liquid, always verify that relationship from an independent source.
  6. be aware of spelling and grammatical errors in correspondence and website domain addresses that may indicate fraudulent activity.
  7. do not share your Liquid account login or security information with anyone, including Liquid employees.
  8. don’t be fooled by fake freebies or job offers on Telegram. Liquid’s official channels are used to advertise job offers and promotions.
  9. always report any suspicious or unauthorized account activity to Liquid Support.
  10. always do your research before buying new ICO tokens or lesser-known cryptocurrencies.
  11. use two-factor authentication (2FA) to protect your Liquid account.




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