Are you aware of the scams in the crypto-currency world?
Despite the rapid evolution of digital currencies, a large number of crypto scams have been reported over the period. Although the scams are not a recent phenomenon, the significance and the number of scams occurred have been increased mainly due to the modern technologies. Reportedly scams relating to crypto-currencies have been surged up to 7,118 in the first 09 months of 2021 which is 30% up compared to 2020. Especially during the period of Covid-19 pandemic, when the prices of cryptocurrencies shot up, they became more mainstream. As such scammers capitalized on their popularity.
There are two types of main cryptocurrency scams which tend to target different populations.
01) Fake investments
In this instance cryptocurrency investors who tend to be active
traders with risky portfolios are targeted. Most of such investors are young
professionals with high income levels and aged under 35 years. Scammers tend to
create fake coins or exchanges in this scenario. SQUID could be depicted as the
most recent example for this. This particular new cryptocurrency coin was named
after the TV drama ‘Squid Game’ and had reported a skyrocketed price. However
the creators had simply disappeared with the money. The scammers strives to
cheat on investors by enticing them to be among the first to purchase a new
cryptocurrecny-a process called ‘initial coin offering’ with the promise of
large and quick returns. Owing to the complexity and the evolving nature of
such new coins even the experienced investors could be fooled.
Hence it is vital to follow age-old advice thoroughly before making
any crypto investment.
02) Shakedown payments
This is the second basic type of cryptocurrency scam which targets all ages and demographics. This consists of ransomware cases, romance scams, and computer repair scams, sextortion scams etc. Scammers simply utilize the anonymous nature of the cryptocurrencies to hide their identities and evade the negative consequences. Bitcoin has become the most common digital coin requested in ransomware cases while being 98% of the cases. Further, according to the UK National Cyber Security Centre, sextortion scams have often requested people to pay in Bitcoin and other cryptocurrencies.
Hence it is advised not to accept any request to transfer or exchange of money via cryptocurrencies without a proper investigation.
In conclusion, cryptocurrency scams could be painful due to the disability of retrieving lost funds. Indeed cypto scams are not oversights, but the ‘Wild West’ of the financial world.
References
Hanoch, Y. and Wood, S., 2022. [online] theconversation.com. Available
at: <https://theconversation.com/scams-and-cryptocurrency-can-go-hand-in-hand-heres-how-they-work-and-what-to-watch-out-for-182033>
[Accessed 2 July 2022].
Rodgers, T., 2022. Six cryptocurrency tips (and five mistakes to avoid). [online] www.thetimes.co.uk. Available at: <https://www.thetimes.co.uk/money-mentor/article/crypto-tips-mistakes/> [Accessed 27 June 2022].
Very useful article which inclusive all points about scams and crypto currency altogether 👏 Thanks for sharing the information 🙏
ReplyDeleteTo be honest, I generally don’t read. But, this caught my attention.
ReplyDeletevaluable information for potential investors.
ReplyDeletewell written. thanks
ReplyDelete