Crypto Scams that could cost you thousands

THE surge in virtual currencies has made the job of a scammer easier while increasing the vulnerability of potential victims. Hence it has become paramount to be vigilant of scams you could fall prey to.

With the veil of secrecy offered by cryptocurrencies, the internet and social media, coupled with the more daring and elaborate schemes hatched by scammers, it has become increasingly difficult to identify a cryptocurrency scam.

Most recently, as part of IOL’S Crypto Scam Series, we delved into our top tips on how to avoid falling victim.

However, despite understanding how you could be scammed through a crypto-related attack, it is equally important to know what cons are out there, lurking on the internet and waiting to phish you out of thousands through a simple Whatsapp message.

Before we get into our list of crypto-related scams and common methods being used by hackers, it is important to remember that there is yet to be a proven, legitimate, verified and trusted way to make money through

any investments transacting through cryptocurrencies.

Like other indices and commodities, investing in crypto for a profit is gambling, so, as a rule of thumb, be prepared to lose everything you put in.

If you’re not into punting on the price of your favourite crypto, here are some crypto scams you could fall victim to even if you’ve never bought or made a cryptocurrency transaction before:

The return of the pyramid scheme

With the progression of technology, pyramid schemes themselves have evolved.

For starters, no one calls them pyramid or Ponzi schemes anymore. So be sure that no one will approach you saying: “Hey, I’ve got a great pyramid scheme for you to invest in.”

Despite the fancy jargon adopted, such as “the business, “our company”, “your company”, “passive income”, and “revenue streams”, today’s pyramid scheme functions exactly as in the past.

If an investment encourages you to “recruit a friend”, which will allow you to get a commission, and if your friend on-boards another recruit, which earns you more money as the “downline” increases, it’s probably a pyramid scheme.

Cryptocurrencies are being used locally by scores of these kinds of investments to transact, which they claim reduces fees. Still, it is more likely used because of its lack of traceability.

Gone Phishing

It’s easy to become a fish out of water after a cryptocurrency scam. Phishing, pronounced “fishing”, is how potential hackers attempt to gain access to your finances or personal information, through various forms of communication, like Whatsapp or over the phone.

Some of the most professional and experienced hackers could con anyone into thinking they’ve won a competition or even convince them of the maturity reached by an investment they never made.

Take careful note of the company and person contacting you. Simply enter names in Google to verify authenticity while being sure of the investments you’ve made.

Persistent calls and assistance from these hackers are a common part of their modus operandi.

However, no legitimate firm will ever ask you to connect via Teamviewer, Google Hangout or another method to peek into your desktop.

Red flags should be at full mast if anyone you don’t know ever offers to assist you by peeking into your bank account or cryptocurrency wallet, nor will they request for you to fund such in order to receive a payment.

Keep calm and ignore the Forex expert

Suppose you’ve managed to evade the too-good-to-be-true investment offers from a “professional forex trader”. In that case, chances are you will be approached by one of them at some point.

The forex traders flash fancy cars and other high-value items on themselves and their social media accounts to create the perception of wealth. This is to entice their audience into investing with them.

While many are legitimate and can teach you the legal route to trading in foreign exchange, which is above board, there are the others, the majority actually and especially the ones who trade in cryptocurrencies, who will probably make off your investment as a profit.

Take all forex opportunities with a pinch of salt.