Cryptocurrency security is more important than ever. With the rise in crypto popularity, the number of bad actors trying to separate you from your money has followed suit.
Online scamming has existed way before crypto. It’s a practice as old as the internet itself. Scammers never let the opportunity slip when there’s a chance to take money away from people.
Crypto scams are running rampant. In 2021 alone, scammers took a whopping $14 billion worldwide. They used the popularity of DeFi to take advantage of investors unfamiliar with this new technology.
Here you’ll learn the most popular crypto scams and ways to avoid them.
The Most Common Crypto Scams Used Today
First, let’s talk about the most common crypto scams going around the crypto world. It’s important to know what you’re dealing with to avoid it.
New Projects With Impossible ROIs
A blockchain project can create a token fairly easily. For scammers, it means they can make a faux initial coin offering (ICO) with unsustainable promises.
Then, they promote the project on social media and sell the majority they hold when the price rises (pump and dumps). Or they simply run off with the investors’ money (rug pulls).
Be careful if you find someone promoting a website or program on social media with unsustainable promises. Avoid contacting or engaging with those comments.
A favorite amongst many scammers is romance scams. This one targets users on dating platforms or social media, taking their time to connect with the user and slowly gain their trust.
After the user gets comfortable, the scammer brings out this newest investment opportunity that’s sure to go to the moon. They might try and have you convert fiat currency to a new coin, or simply send cryptocurrency to a fake website or their wallet address.
Either way, the second you send it to their address, it’s already too late. It is best to separate your dating life from investment advice to maintain a safe cryptocurrency security practice.
Free Money Scams
Who doesn’t like free money? Unfortunately, it might not be the case. This scam gained popularity with the airdrop practice.
Usually, airdrops are a way for new projects to build a community around a platform by sending tokens to registered wallets. But scammers use this opportunity to trick you into giving them access to your DeFi wallets.
Legitimate projects will have you complete tasks and register your DeFi wallet. Fake projects will airdrop fake tokens or NFTs to your address. Pay close attention if it is a legitimate project that airdrops. If you see a token on your wallet that you don’t know, it’s best to avoid it.
By impersonating well-known companies or government agencies, scammers use this opportunity to try and convince users that they’re a trustful entity. They might say your newest order or bank account is compromised and demand payments in cryptocurrency to solve the problem.
No legitimate agency demands crypto-only payments. If you ever receive one of these claims and you’re unsure, it’s better to double-check that the person reaching out is an official representative of the agency they claim to be part of.
The best way to do this is by visiting the agency and finding their contact information (e.g., contact form, email address, or phone number).
Phishing scams are probably the most common scam on the internet. With it, scammers try to bombard you with unsolicited emails or messages on social media with links.
Once on the link destination, they do their best to impersonate legitimate websites and make you reveal sensitive information. Never click on a random link you receive; be very careful about giving information (e.g., a wallet recovery phrase) on a suspicious website.
Best Practices to Maintain Cryptocurrency Security
Let’s talk about other ways you can avoid falling for crypto scams:
- Look for red flags: If it sounds too good to be true, it probably is. Are these projects promising you degenerate returns, a lifetime opportunity, or the next Bitcoin? Use your discernment and avoid impossible claims.
- Research the topic/project: Google the company or project that contacted you. If it doesn’t appear on the first page, it’s best to avoid it. Look for other people’s opinions on social media. Try and find any info you can. If you find anything off-putting, avoid it.
- Finding incongruences: If you ever receive an email from a “legitimate company” with a link to their website, open the actual company’s website and look for any difference between both. Like the URL, for example, Abra.com is legitimate, but Abra.co or Arba.com isn’t.
- If you’re in doubt, reach out: If you did all these steps and are still doubtful, reach out to trusted sources. For example, if a well-known company reaches out to you, talk to their client support and explain the situation. If a hacker tries to attack you, reach out to a trusted third party like a government agency.
How to Report a Possible Scam?
If you discover a possible scam, report it to the authorities and help new users avoid these bad actors. You can report it to the FTC, SEC, or IC3.
A good cryptocurrency security practice is a must for any trader or investor. Here at Abra, you’ll find a trustworthy platform with millions of users! Download the Abra app and invest without concerns today!Download App
Established in 2014, Abra is on a mission to create a simple and honest platform that enables millions of cryptocurrency holders to maximize the potential of their assets. Abra enables both individuals and businesses to safely and securely buy, trade, and borrow against cryptocurrencies – all in one place. Abra’s vision is an open, global financial system that is easily accessible to everyone.
Based in the United States, Abra is available in over 150 countries and makes it easy to convert between crypto and a wide variety of local fiat currencies. With over 2MM customers, $7B in transactions processed, and $1.5B in assets under management, Abra continues to grow rapidly. Abra is widely loved and trusted – in April 2022, pymnts.com reviewed and rated Abra amongst the top 5 most popular crypto wallets in the market. Abra is backed by top-tier investors such as American Express Ventures and First Round Capital.
How Abra Protects Your Funds
Abra places clients’ financial objectives and security first. Abra practices a culture of risk management across all levels and functions within the organization.
Abra employs a state-of-the-art enterprise risk management framework that comprises a comprehensive set of policies, procedures, and practices detailing all applicable risk-related objectives and constraints for the entirety of the business. Abra has instituted a complete set of requisite systems and controls that continuously enforce these policies, procedures, and practices to manage all operations, including credit and lending. Abra’s independent Risk Committee comprises experienced compliance, risk, securities, and fraud operations professionals with backgrounds in industries ranging from traditional and digital assets banking, payments, remittance, to fintech.
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