Cryptocurrencies are quite popular, but we should forget about various problems, including cryptocurrency scams.

Broadly speaking, cryptocurrency scams fall into two different categories:

  1. Initiatives aiming to gain access to a victim’s digital wallet. Notably, this means scammers try to get information that gives them access to a digital wallet or other types of private information. Moreover, in certain cases, this even includes access to physical hardware.
  2. Transferring cryptocurrency directly to a scammer or a group of scammers due to impersonation, fraudulent investment or business opportunities, or other malicious means.

Cryptocurrency scams and users

In the case of social engineering scams, scammers use psychological manipulation and deceit to gain control of vital information relating to user accounts. What’s interesting, these types of scams condition people to think that they are communicating with a trusted entity such as a government agency, tech support, community member, etc.

It is worth noting that scammers will often work from any angle or take however much time they need in order to gain the trust of a potential victim so that users disclose key information or send money to the scammer’s digital wallet. For example, when one of these trusted connections demands cryptocurrency for any reason, it can often be a sign of a scam.

Scammers like to use dating websites to make unsuspecting targets believe that they are in a real long-term relationship. However, when trust has been granted, conversations often turn to lucrative cryptocurrency opportunities as well as the transfer of either coins or account authentication credentials. One important fact: Approximately 20% of the money reported lost in romance scams was in cryptocurrency.

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Interesting details about scams

Investment or Business Opportunity Scams and new crypto-based opportunities: ICOs and NFTs

When it comes to cryptocurrency scams, we can’t forget about investment or business opportunity scams.

Many profit-seeking speculators turn to misleading websites offering guaranteed returns or other setups for which investors must invest a lot of money for even larger guaranteed returns. While funds flow freely inward, these fake guarantees often lead to financial disaster when people try to get their money out and find that they can’t.

Importantly, with the rise of new crypto-based investments such as initial coin offerings (ICOs) as well as non-fungible tokens (NFTs), there are now even more avenues for scammers to try to gain access to your money. It is desirable to keep in mind that even though crypto-based investments or business opportunities may sound lucrative, this doesn’t always reflect reality.

For instance, some scammers create fake websites for ICOs and instruct users to deposit cryptocurrency into a compromised wallet. In other cases, the ICO itself may be at fault. Unfortunately, founders could distribute tokens that are unregulated by U.S. securities laws or mislead investors about their products through false advertising.