Scammers follow the money, and this holds true for digital money as well. There are dozens of scams that use cryptocurrency to con people out of their money and their information. As a non-regulated currency, stolen crypto is virtually impossible to reclaim. Here are five crypto scams to know:
1. Bitcoin investment scams
In this ruse, a scammer will reach out to crypto investors and pretend to be an investment manager. They’ll say they’ve earned millions by investing in Bitcoins, and can invest the target’s money with similar results. The catch? They’ll want an upfront fee. Then they’ll disappear, along with the money, and they’ll never be heard from again. In a similar ruse, the scammer asks for personally identifiable information (PII) so they can deposit or transfer funds as an alleged investment manager. Of course, the scammer will simply use this info to gain access to the victim’s accounts.
Protect yourself: Never pay an upfront fee for a service you’ve never used without doing extensive research into its authenticity. Also, never share your PII with an unverified contact.
2. Romance scams
In these scams, criminals use online dating sites to persuade victims into believing they’ve met legitimate love interests. The “relationship” grows, and then the remote date starts talking to the victim about an outstanding cryptocurrency opportunity they can offer while promising lucrative returns. The victim, now fully trusting the scammer, acts upon this advice, makes a sizeable investment and loses it all to their “romantic partner”.
Protect yourself: Never share money online with an unverified contact you’ve never personally met, even if it’s with an alleged date.
3. Man-in-the-middle attack
This scam involves a criminal intercepting information a victim sends over public Wi-Fi, including login credentials, to a cryptocurrency account, including passwords, cryptocurrency wallet keys and account information. The scammer then uses this info to access the accounts.
Protect yourself: Only use a virtual private network (VPN) when accessing sensitive and financial accounts. VPNs automatically encrypt all transmitted data, thus protecting your information.
4. Social media cryptocurrency giveaway scams
In this crypto ruse, scam rings use social media platforms to advertise crypto giveaways. The ads often include fake celebrity messages promoting the giveaway. Unfortunately, if a target clicks on the giveaway, they’ll be taken to another site, which asks them to make a payment to verify their account for the giveaway. If they comply, the victim will lose this money. Worse, the link to pay the fee may contain malware that infects their computer and steals their info.
Protect yourself: Never click on an ad to buy crypto of any kind. Instead, if you’d like to invest in cryptocurrency, look up secure investment sites, like Robinhood and Coinbase, directly and on your own.
5. Employment offers and fraudulent employees
In this scheme, scammers impersonate recruiters or job seekers as a ploy to gain access to crypto accounts. They may offer a job opportunity that only takes payment in crypto for job training. Of course, the job is bogus and all the target will gain from the “job training” is a loss of cryptocurrency funds.
In the fraudulent employer scam, an IT company, often claiming to be U.S.-based, will serve as a front for crypto scammers. The IT freelancers will specifically seek projects involving virtual currency. They’ll use the info they gain from these jobs to hack into systems, raise money or steal information from those who’ve hired them. They may also use their IT knowledge to plant malicious attacks on the devices of those who’ve hired them.
Protect yourself: Never accept a job offer that insists on payment for training via cryptocurrency. Similarly, never give an unverified contact access to your accounts or devices; use reputable companies only for all IT issues.
Cryptocurrency may be the money of the future, but it’s also a primary tool for contemporary scammers. Stay alert, and stay safe!
Your Turn: Have you been targeted by a cryptocurrency scam? Tell us about it in the comments.