Easy Crypto: Crypto Scams & How to Avoid Them

As cryptocurrencies have entered the mainstream, more and more malicious parties are entering the space to scam unwary crypto investors. Perpetrators of cryptocurrency scams are constantly finding new ways to compromise your data and steal your assets.

One sure sign of a scam is anyone who pressures you into paying with cryptocurrency. That’s because if you pay in cryptocurrency, there’s almost no way to get that money back. And that is what the scammers are counting on!

In this article, Easy Crypto discusses the different types of cryptocurrency scams, how their schemes are set up, and how you can avoid them.

Investment and business opportunity crypto scams

There are companies and organisations out there that claim they’ll net you lots of money, and quickly, if you follow their advice. While the idea of financial freedom is enticing, when something sounds too good to be true, it usually is.

These schemes are often backed by a group or individuals claiming to be financial gurus, coaches or mentors. To avoid this type of scam, look out for the following claims:

• Guarantees that you’ll make money. If they promise you’ll make a profit, that’s a scam. Even if there’s a celebrity endorsement or testimonials, as these are easily faked
• Scammers promise big payouts with guaranteed returns, say, double your money. Nobody can guarantee such returns, much less in a short time
• Promises of free money. Scammers will promise it in cash or cryptocurrency, but free money promises are always fake
• Scammers make big claims without details or explanations. Smart business people want to understand how their investment works, and where their money is going. And good investment advisors want to share that information

Before you pay any money, thoroughly check out the investment. Research online for the name of the company and the cryptocurrency name, plus words like “review,” “scam,” or “complaint”. See what others are saying. And read more about other common investment scams.

Social media crypto scams

Nowadays, we spend most of our waking hours connecting with our peers on social media. Well, guess what, scammers know this and will try to take advantage in places where you least expect it.

There is no shortage of social media scams out there. Cyber attacks in social media are getting more and more sophisticated, and you need to stay vigilant.

Here is a list of red flags that can help you identify potential malicious cyber attacks on social media:

• A request to deposit a sum of money into a specific wallet address
• An influencer or public figure claims to promise you a guaranteed investment return
• A social media post offers a reward incentive for depositing money
• Private message that contains very specific instructions to perform a series of actions
• Any private message that invites you to join a group outside of the platform that persuades you to disclose your personal information

In short, if anything reads or sounds remotely suspicious – it could be. Whenever possible keep your social media profiles private and never disclose or share information that may compromise your personal identification.

Multi-Level-Marketing (MLM) crypto scams

For these scams, you may find scammers reaching out to you via social media channels, or it could be someone you actually know! In MLM scams, the criminals typically:

• Ask you to pay in cryptocurrency for the right to recruit others into a program. If you do, they promise you’ll get recruitment rewards paid in cryptocurrency. The more cryptocurrency you pay, the more money they promise you’ll make. But these are all fake promises and false guarantees
• Tell you that they can help you grow your money if you give them the cryptocurrency you’ve bought. Sometimes they asked that you deposit directly into their “holding account”.  But once you log in to their “investment account”, you’ll find that you can’t withdraw your money unless you pay fees, or that it is “locked away”

Job crypto scams

These involve fictitious job descriptions posted online and the promise of a job for a fee. Of course, the fee is typically paid in cryptocurrency, and the scammers are certain to walk away with your crypto and your personal information.

For this particular scam, be sure to take note of the warning signs:

• You are offered a job without an interview, or the interview consists of a few emails.  A legitimate job offer will require an interview and a reference check
• The pay offered is higher than usual for the type of work being offered
• The “company” uses a web-based email address to conduct business. Addresses such as IBMJobs@gmail.com or AppleRecruiting@icloud.com are fake
• You are asked to send them a crypto fee…
• …Or the advertised job involves receiving and/or sending money, especially moving cryptocurrencies on behalf of clients

Phone crypto scams

These scammers contact you via your phone and exhibit the following traits:

• Pretend to be from a government department (e.g. Inland Revenue), your bank, or a well-known company
• Ask you for personal information, such as your date of birth or your address

The purpose of doing this is similar to a phishing scam, when fraudsters attempt to harvest your financial information.

Computer virus scams

These types of scams usually involve your computer. The scammer will:

• Give you a phone call saying your computer has been infected with a virus
• The caller will claim that they can fix your computer as long as you provide them with remote access to your computer
• The person may ‘crypto jack’ your computer. This is when they make you download some kind of computer script and are then able to use your computer and internet to mine cryptocurrencies

Money mule

Money mule scams are usually involved in conjunction with other scams, such as investment or romance scams. The scammer will likely persuade you to do one or more of the following acts:

• Send you a sum of money or cryptocurrencies and tell you to send the rest onto them
• If you question the source of the funds, the scammers may come up with an elaborate story about how they’ve amassed such wealth while trying to cover up the fact that these funds are usually stolen or not legitimate
• They will offer to deposit cryptocurrencies into your wallet and ask that you sell the crypto for them
• For your effort and involvement, they will offer that you keep some portion of the fiat money yourself, while transferring the remaining money into their (domestic or international) bank account

In New Zealand, money mules can be prosecuted for participating in criminal activities and sentenced to jail time. A money mule’s own personal information may be stolen by the very criminals they are working for and used for other criminal activities

Romance scam

Romance scammers use a fake profile or account on dating apps or social media sites. And, yes, that good looking picture you see online, it’s probably not them.

Using their fake profile, the scammers quickly find a target and start to connect with them through direct messaging. Here are some of their typical characteristics:

• They shower you with compliments and tell you how fond they are of you
• Start sharing their plights and troubles with you and how they wish they were with you
• Ask you for money to cover some type of immediate or emergency expense
• Throughout the online relationship, the scammer will make excuses about why a face-to-face meeting can’t happen, for example they are in the military or overseas
• The person provides inconsistent details about his/her life

Romance scammers are very patient and very persistent. It’s not uncommon for victims to send romance scammers money multiple times.

Romance scams are a type of psychological scam that can be devastating for vulnerable victims.

What to do if you think you’re being scammed?

If you are being scammed, or if you’re ever in doubt, follow the procedures below:

• Report the incident to your bank
• File an incident report on NetSafe’s website. NetSafe will get back to you with advice and may also forward your report to a corresponding agency and/or authorities, such as the police or Consumer Protection
• You can also report a cybersecurity issue through CERT NZ

Easy Crypto is New Zealand’s safe and easy Bitcoin & Cryptocurrency retailer. It’s open 24/7, guarantees every order, and most orders are completed within two minutes. Sign up today or follow Easy Crypto on Twitter, Instagram, or its YouTube channel to stay up-to-date with all the latest crypto news.