Scammer

Common Methods used by Cryptocurrency Scammers

While scams can come in a myriad of forms, the following are amongst the most common tactics employed:

• Phishing: Phishing is a tactic where the scammer impersonates a reputable cryptocurrency business or service provider in an attempt to gain access to the victim's personal information or cryptocurrency wallet.
• Ponzi Schemes: Scammers lure investors with the promise of high returns. Early investors are paid using the funds of newer investors. This creates an illusion of legitimacy, but eventually, the scheme collapses when there are no more new investors.
• Fraudulent ICOs (Initial Coin Offerings): Scammers set up fake ICOs to rob investors. These ICOs raise funds for non-existent projects and disappear once they've collected the money.
• Exchange Scams: Scammers create fake cryptocurrency exchanges with attractive rates to lure people into depositing cryptocurrencies. Once deposited, the victims find they can't withdraw their funds.

Identifying a Scam

Here are some red flags that could indicate a scam:

• Promises of high returns with little to no risk.
• Pressure to invest immediately or miss out on a grand opportunity.
• Lack of transparency about the company’s identity.
• Avoiding answering questions about investment specifics.
• Difficulty retrieving money or closing an account.

How to Protect Yourself

Ensuring you don't fall prey to a scammer can often be as simple as knowing the basic rules of internet safety. However, when it comes to cryptocurrencies, there are additional measures you can take:

• Research: Do thorough research before investing in a cryptocurrency. Read about the company, the team behind it, and any reviews or news about it.
• Don't Share Personal Information: Never share your personal information or wallet details with anyone. Your cryptocurrency wallet should be as private as your real wallet.
• Double Check URLs: Always ensure the URL of the website you're using is correct. Scammers frequently use websites with URLs that look like, but are slightly different from, the real ones.
• Trust Your Gut: If something doesn't feel right, it probably isn't. It’s better to miss out on a “great” opportunity than to lose money to a scammer.