Dealing with Cryptocurrency scammers: How to protect your money?

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Being an innovative technology for transferring funds without banks and other intermediaries, cryptocurrencies are also common assets for investment. Some people even prefer them to traditional stocks, as entering the crypto market doesn’t require much effort, knowledge, and skills.

Besides, you can start with as little as 20-100 dollars. The high volatility of the price of digital assets is one more reason why investors choose crypto. With thorough research and risk-preventing techniques, you can make profits much faster than when you trade on traditional markets. 

These all factors together with a boom of innovative fintech services attracted millions of people into the world of virtual finance. And where there is money, there are scammers who are trying to steal it.

How to spot and avoid scams

Having a strong password, multi-factor authentication for your account and recovery phrases kept in a safe under ten locks is always a good idea. However, they are not always working well. Scammers are tricky and kind of creative guys, so the first recommendation in protecting your crypto funds — follow the industry news. 

Before June 2021, hardware wallets were considered the safest method of storage for your crypto. It’s a small device you can keep in a safe place or take with you everywhere and it’s not connected to the internet, so hackers can not reach it. The security of cold wallets relies on its holders — the only way a scammer can get access to it is to steal the device. 

Still, in 2021 scammers performed an offline phishing attack on Ledger customers. It was caused by a data breach that happened with a third-party company. But they couldn’t access funds without actions performed on the wallet users’ side. That’s why you should always stay on the lookout. 

How are scammers acting in 2021?

Pretending to be a trusted company or famous people 

And this is not only about phishing emails and DMs. One excellent example of scammers’ creativity and people’s naivety is the Twitter scam with the Elon Mask account. When followers saw that Elon promised to double their inputs sent to his wallet address, they didn’t even mention that it wasn’t Elon’s account. Fraud just created a page that looks the same and replied to Mask’s tweet. 

Creating a fake DeFi project 

Fraudsters looking for potential investors, create fake websites, whitepapers of the project, and enter into smart contracts with their victims. The smart contract conditions are seated the way that allows scammers to steal funds without a possibility for the true owner to return them. 

Stealing your NFTs or selling fake ones

NFTs mostly represent a picture or video, the item that is easily replicable, in fact. However, the specific hashtag that defines the NFT’s location can not be duplicated. This hashtag also defines the true holder of the token. If hackers access your account and send the NFT to another place, you’ll hardly get it back or receive compensation for it. Additionally, scammers often create fake NFTs in order to sell them to prospective buyers. 

Launching fake crypto apps

The digital economy offers a wide range of fintech services and mobile apps providing them. Cybercriminals are skilled at duplicating them. Once users download the compromised apps, transactions they initiate are redirected to scammers.

Loader scam and money laundering

The loader may reach victims on social media and ask them to take over their account because they need higher trading limits. In return, the scammer promises to share income. Believe it or not, some people are willing to share credentials of the account where they keep their crypto for the mythical profits they promised. Fraudsters drain the victim’s accounts, taking all the cryptocurrency for themselves. Or they avoid KYC processes and execute transactions on behalf of another person. In this way, they can launder illegally obtained money.

Level up the security of your crypto accounts

You may have already heard about some security tips, like keeping your crypto on different wallets and keep away from suspicious emails and messages. Here are some non-trivial recommendations to better protect your funds: 

  • Create accounts and wallets on trusted platforms. 

Whether you’re going to buy crypto and hodl it in a cold wallet or trade digital assets on a regular basis, choose reliable platforms. Check their certifications and reputation. Nowadays, most crypto exchanges have to get regulated to provide their services. For this, a platform should pass the independent audit. So, if the company obtains a license from regulation bodies, you can be 95% sure you can trust it. When registered, enable 2-factor authentication for your account. Additionally, check out the official communication channels of the company to ask for assistance if needed. 

For instance, you can open an account with CEX.IO, a global regulated crypto exchange platform. It’s licensed to operate in the USA, Canada, Gibraltar, United Kingdom, and obtained a PCI DSS level 1 certificate for processing payment card transactions. 

  • Always choose the secured internet connection 

Better use your home networks and never connect to public WiFies. They’re working by their own rules and scammers simply interrupt your connection with a host. As a result, hackers can get access to your personal information, like login credentials for crypto and online banking accounts. As well as they can reach your hardware crypto wallet installed on the device you use. So, disable WiFi when you don’t need it and make sure the auto-connect option is switched off. 

  • Don’t trust too attractive offers

Crypto platforms as well as emerging projects often launch giveaways to attract more customers. Participation in legal giveaways doesn’t threaten your funds. However, if someone asks you to pay an “initial refundable” deposit, this is a scam, without a doubt. Once you send funds to scammers, you lose them. 

The same rule works for brokers and investment managers promising you quick profits. The process of their schemes doesn’t look suspicious — the account manager offers you assistance, and your balance is changing due to the market shifts. However, you’ll not be able to close your deals and withdraw funds as soon as you need them. 

  • Don’t talk about your crypto holdings and investments 

Seriously, keep your mouth shut. No one needs to know that you are in crypto or investing in something. Especially, when you discuss something on online forums or social networks. Telling about your success or strategy attracts scammers, not followers. 

About the author

David Huner

Hi, my name is David Huner, a Tech Lover. In my spare time I enjoy writing reviews and informative articles that I hope you find useful. Please enjoy as I have dedicated much time and effort into my work.

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