How to identify cryptocurrency scams

This is why it pains us so much to see that our favorite platforms are constantly under attack from fraudsters. So we wanted to put together some ideas on how you can reduce crypto fraud at your company, especially by focusing on a transaction and user identification security. From market manipulation techniques such as pump-and-dumps to imposter websites and mining scams , since crypto transactions are irrevisable the chances of recovering any losses due to fraud are next to minimal. Since cryptocurrency and blockchain are both new technologies, there are a variety of routes for fraudsters to initiate a form of cryptocurrency scam or conduct money laundering. There are a bunch of ways fraud can take place within the crypto space from scam ICOs, pump and dumps as well as market manipulation. More specifically, crypto exchange fraud counts every attack designed to extort value from a cryptocurrency exchange through illegal means.

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Content:

• Lookout Unearths Android Crypto Mining Scams
• You probably know someone who has lost money in a social media scam
• Inside the cryptocurrency scam vortex
• How ‘The Youths’ Are Being Scammed By Influencers Into Investing In Cryptocurrency
• Cryptocurrency scams: Fraudsters are using ponzi schemes to fool investors
• New West police urge residents to talk to loved ones about “startling” rise in cryptocurrency scams

WATCH RELATED VIDEO: Top 5 Crypto Scams In 2021

Lookout Unearths Android Crypto Mining Scams

The cryptocurrency sector has grown at exponential rates over the past few years. Unfortunately, the number of scams in the industry has also increased. Interested in cryptocurrency? Before you take the plunge, you should be aware of the different types of cryptocurrency scams and frauds taking place. The abstract nature of cryptocurrencies and the technology under the hood make it easier for scammers to successfully execute their fraudulent schemes in the sector.

Often, cryptocurrency scammers combine marketing jargon with false claims about cryptocurrency technology to convince unsuspecting victims of the legitimacy of their schemes. The huge potential of cryptocurrency for scams has become increasingly apparent. Scammers that are more technically inclined than others use hacking techniques and social engineering to advance their cryptocurrency schemes.

While blockchain networks and the encryption techniques used to secure them are reliable, many victims of scams fail to recognize the need to watch out for effective tricks such as email phishing. Here are cryptocurrency scams you need to know before buying bitcoin or any other cryptocurrency. An initial coin offering ICO is a fundraising exercise that uses smart contracts and cryptocurrency to automate payments between an organization and its stakeholders.

ICOs are used by cryptocurrency companies to raise money from future users. While a lot of great companies have been built using ICOs, many of the fundraising exercises have turned out to be scams. In the earlier days of ICOs, a lot of projects spent months promoting their fundraising exercises.

Different techniques were used, including the offer of bounties for guerilla marketing. Despite not having working products, many projects were able to raise funds before ceasing communication with their investors.

A lot of ICOs seemed to be operated by legitimate entrepreneurs with good track records. In many cases, it would later be found that the supposed "entrepreneurs" were actually faceless criminals using the identities of other people. Some projects go as far as getting the public support of notable names in the industry. It is often difficult to distinguish between a legitimate ICO and a fake one. This is partly because of the fact that the majority of ICOs have been carried out online with almost no face-to-face interaction between the organization and stakeholders.

Even legitimate ICO projects lose the money of their funders as a result of hacking attacks on them. Common methods such as phishing were used to trick legitimate ICO projects into releasing their funds. Bitcoin mining is a process that uses computational power to securely add transactions to the blockchain ledger.

Computers on the blockchain network solve complex mathematical problems that help to confirm transactions before adding them to the immutable ledger. Many other cryptocurrency projects also use similar mining techniques to secure their networks.

Over the years, the process has become much harder to carry out with just any device. Now, making a profit from Bitcoin mining operations requires more advanced hardware which is often more difficult to acquire and use for the average person. This makes a lot of people more willing to outsource cryptocurrency mining to others.

Many scammers have taken advantage of people's willingness to employ cryptocurrency mining services. The operators of cryptocurrency mining scams try to convince their victims to invest in their mining pool so that they can gain significant returns.

The scammers usually stop responding to the messages of their victims after they receive the funds. The criminals behind Bitcoin mining schemes may also try to convince their victims to bring in new investors.

These types of schemes usually involve money being taken away from new investors to pay earlier investors until the cycle of payments can no longer be sustained. Cryptocurrency giveaway scams involve the use of social engineering to convince investors to send their cryptocurrencies in order to receive a larger volume of tokens.

Such scams can be quite convincing, especially when scammers impersonate celebrities to convince their victims. Different types of social media sites have been used to carry out cryptocurrency giveaway scams in the past.

Scammers added text to videos of technology leaders they uploaded on YouTube. The text convinces viewers to participate in fake cryptocurrency giveaways.

Many people assume that the giveaways are legitimate because the videos have high-profile names of the technology industry in them. Twitter accounts have also been used to steal money from people expecting giveaways of cryptocurrency.

Criminals impersonate celebrities and high-profile figures of the technology industry to gain the trust of users on the platform. Giveaway posts are made from the scammer's fake profile to their timeline and the posts of other Twitter users. Fake domains can be used to present web forms as though they belong to legitimate organizations in the cryptocurrency industry. Fake websites have been used to make fake wallets and cryptocurrency exchanges look legitimate.

Hackers are able to gain access to the data of cryptocurrency wallet users once they obtain their exchange and wallet information. The information obtained can be used to log into the personal accounts of victims. Fake websites may also prompt the user to download software. A user, believing they are using a legitimate website, may download the software which has malicious code that steals information from their device. Yield farming is a decentralized finance innovation that makes it possible to earn returns from staking cryptocurrencies.

Yield farming software built on top of the Ethereum blockchain automates lending processes, allowing for people to earn interest from providing liquidity. Some yield farming projects also use Bitcoin. There are many legitimate yield farming projects made by top developers in the decentralized finance ecosystem but there are also many crypto scammers who may simply copy the code of existing projects and add their malicious code in order to steal funds.

Other scammers have gone as far as to pretend to be legitimate for long periods of time before pulling the rug from investors and fleeing with all the funds. Related: What is Email Spoofing? How Scammers Forge Fake Emails. The faceless nature of the yield farming ecosystem makes it very difficult to ascertain whether a project is legitimate or not.

Even where projects are legitimate, there is always a risk that the code of the project could have bugs that are exploited for profit. In more recent times, concerns have grown that more scammers will create fake hacks so that they can shift the blame for the loss of money from themselves to an "unknown" criminal.

It is no secret that online privacy is slowly becoming a thing of the past for most of us. Data leaks and privacy-averse user agreement policies have become so prevalent in recent years. This makes it much easier for scammers to obtain your contact details from the dark web or from legitimate services that you use. With your contact details, a scammer can pretend to be a service you use and email you to request that you click a link in the email body.

The email could contain a description of an issue requiring immediate attention. This is done to make the victim more willing to click on a malicious link or access a fake website where they may give away their details without realizing it.

Email scams can be very easy to fall for due to the fact that most people have a lot of trust for the services they use and would not usually expect an email from a familiar service to be malicious. While cryptocurrencies are changing the world in incredible ways, there are many people whose lives have been destroyed by scams in the sector. It is very important to always look out for red flags both new and old when using cryptocurrency platforms.

Cryptocurrency technology has automated many financial processes and put banking in the hands of the people. This can mean that you could be the weakest link in the cybersecurity chain and the target of a crypto scam. The technology and people behind the platforms you use should also be given a lot of consideration when deciding if you should use a cryptocurrency platform. Bitcoin continues to hit new highs.

Cryptocurrency newcomer Ethereum threatens to explode into its own bubble. Interest in blockchain, mining, and cryptocurrency is at an all-time high. So why are cryptocurrency enthusiasts under threat? Calvin is a writer at MakeUseOf. When he's not watching Rick and Morty or his favorite sports teams, Calvin is writing about startups, blockchain, cybersecurity, and other realms of technology.

An Overview of Cryptocurrency Scams. Share Share Tweet Email. Calvin Ebun-Amu 48 Articles Published. Subscribe to our newsletter Join our newsletter for tech tips, reviews, free ebooks, and exclusive deals! Click here to subscribe. The 5 Best Card Game Apps.

You probably know someone who has lost money in a social media scam

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Inside the cryptocurrency scam vortex

The growth of blockchain and the cryptocurrency space is fascinating. Technical innovations and the rapidly evolving new trading paradigm continue to attract large crowds, but this also includes several scammers. Various cryptocurrencies have created millionaires over the years. They have established themselves as a profitable enterprise for all those who want to invest in the future. However, this growth in value and the adoption of core business has had some consequences. While people with good intentions seek to invest and possibly make a profit and be a part of shaping future money, some criminal elements tend to deceive their investments. Potential investors often refrain from investing in this growing industry because of the steady increase in the number of cases where people lose their cryptocurrencies due to fraudsters and thieves. Older investors are also avoiding these investments. We have brought together six common cryptocurrency scams and how to avoid them. At the end of this review, you should be able to quickly identify common fraud tactics and methods used by most scammers.

How ‘The Youths’ Are Being Scammed By Influencers Into Investing In Cryptocurrency

This drew the attention of their millions of followers, many of whom were young and not knowledgeable about investing. Fans put their money into these new and exciting tokens, believing and trusting the people endorsing it and hoping to make money from it. Influencers who had promoted it pulled their ads and FaZe Clan was forced to suspend four members who had marketed the coin. These people often have millions — if not hundreds of millions — of followers, many of whom look up to them and trust the products they vouch for.

Cryptocurrency scams: Fraudsters are using ponzi schemes to fool investors

Wsbdapp twitter. This initiative will help traditional market investors to warm up with crypto investments. Post your entry in this thread! During the first week of September, Bitcoin. These products will aim to enhance decentralization for retail investors seeking alternative investment opportunities. Shaurya Malwa.

New West police urge residents to talk to loved ones about “startling” rise in cryptocurrency scams

CareerBuilder CEO Irina Novoselsky suggests people are finding a 'side hustle' in cryptocurrency trading, which is keeping them from returning to work. Security researchers have identified over Android apps scamming cryptocurrency miners. The apps have been designed solely to steal money from people who mine cryptocurrencies, said security researchers at Lookout Threat Lab, a cloud security company. In fact, they hardly do anything at all. Cryptocurrency mining taps computer processing power to solve complex mathematical problems that verify cryptocurrency transactions. Miners are then typically rewarded with a small amount of cryptocurrency.

According to the NWPD, scammers will use dating apps, online ads or phone calls to manipulate people into sending them cryptocurrency. Sanjay Kumar. The NWPD says the best course of action to take to prevent others from falling victim to cryptocurrency digital currency scams is to talk to friends and family about how the scams work.

But cryptocurrency fraud is one of the looming dangers of this new digital opportunity. The concept was sound and the idea of getting rid of traditional money appealed to the general public. And in , a group called Satoshi Nakamoto launched Bitcoin, which was unanimously considered the first and true decentralized digital currency. With the advent of a new era of non-bank-dependent digital currency, numerous Bitcoin alternatives were seeded on the market. Living the dream, right? Cryptocurrency fraud, the subject du jour , has gained quite a foothold, with hundreds of thousands of people being swindled every day.

Cryptocurrencies, or "cryptos", are being billed as the future of money. While some people see them as having limitless potential and uses, others are less than convinced. Cryptos are not yet mainstream, but a growing number of companies and financial institutions are buying into them and their burgeoning influence around the world. Let us help you make sense of what cryptocurrencies are and learn why they will matter in the near future. Cryptos are just like any other currency. You can buy goods and services with them or trade with them.

Social media helps you stay connected with family and friends — and hordes of scam artists connect with you. That's an fold increase in the number losses related to social media fraud since , according to the agency. Over 95, victims — more than twice the number in — said they lost money after falling prey to a deceptive ad, post or message they received on a messaging, photo-sharing or similar app.