Have you ever considered investing in cryptocurrency but been too afraid to take the plunge? We understand! With all the news of frauds, scams, and hacks, it can be hard to know what’s safe.
But don’t worry – we’re here to help! At ITP Corporation, we understand how important it is for investors to stay informed about the latest threats that can put their investments at risk. That’s why we’ve compiled this guide on cryptocurrency frauds and scams to be aware of.
Types of Cryptocurrency Scams
According to recent reports, more than $1 billion was lost to crypto scams in just the last 15 months! Stay alert and protect your hard-earned money from these three prevalent scams targeting unsuspecting individuals nowadays!”
- Identity Theft Scams
Identity theft has become a significant risk in most crypto scam types. Fraudsters can use stolen personal information — such as your name, address, and social security number — to access your accounts or even impersonate you for nefarious purposes. To protect yourself from these scams, never share personal information with anyone online, and double-check any online accounts (such as email, banking, and social media) for suspicious activity.
- Fake Initial Coin Offerings (ICOs):
In the first half of 2021, the number of fake cryptocurrency wallets grew by 400%, according to research by Bitcoin.com. Initial coin offerings (ICOs) are a well-liked method used by bitcoin businesses to obtain capital. Scammers have also joined on board, providing phony ICOs that guarantee significant returns on investment. The scammers vanish once victims send their bitcoin to the fake ICO, leaving them with nothing.
Always take advantage of professional wallet development services. Investing in wallet development services is one of the most intelligent decisions you can make as a cryptocurrency enthusiast. Look for the company that is sponsoring the ICO and read investor evaluations. Invest only in trustworthy firms’ legal ICOs.
- Ponzi Plans:
The Ponzi plans are yet another typical cryptocurrency fraud. In this kind of fraud, the con artist promises significant returns on investment, but instead of making a profit, they pay off previous investors with the money from new investors. Due to a continuous flow of new investors, the scam continues until it finally implodes, leaving many investors with nothing.
Always be aware of claims of huge returns on investment to avoid falling for a Ponzi scheme. Never invest in a cryptocurrency offer without homework beforehand to prevent cryptocurrency fraud.
How to Protect Yourself from Crypto Frauds and Scams
The number one rule of thumb for avoiding crypto frauds and scams is to remember that legitimate businesses will never demand cryptocurrency in advance. That means if you’re asked to pay for something via bitcoin, gift cards, or wire transfer, it’s a big red flag and could be a scam.
In addition, be on the lookout for poorly written white papers, excessive marketing, and promises of quick money. It would help if you avoided these symptoms of fraudulent coins or projects at all costs.
Cryptocurrency scams and frauds are everywhere, and no crypto investor is immune to them. To stay ahead of the fraudsters, it’s essential to stay informed on the latest trends and educate yourself on the risks associated with investing in cryptocurrency. Always research before investing, and never be afraid to ask questions.
Thanks to ITP Corporation, staying informed is easier than ever. Our team of experts is on the pulse of what’s happening in the crypto world and can provide you with the guidance and knowledge you need to make smarter investing decisions.