Crypto Klondike

Crypto Klondike 2021: Avoiding Becoming A Victim To Cryptocurrency Scams

Recently, this May 2021, there was a message on the website of a crypto finance project, DeFi100, posted a message that subsequently went viral. The announcement was maliciously jubilant, exuberant over how the author ad his partners had perpetrated a massive scam and that they were beyond retribution. 

Message screenshots swiftly went viral on crypto Twitter (always labile, easily excited). A well known anonymous crypto-tracking Twitter account called Mr Whale posited that DeFi100 had made off with $32 million. Cryptocurrency news vendors, besides Yahoo Finance, ran the story. The project owners disavowed any wrongdoing, and it soon became apparent the message was a website hack and not a serious warning. But by then, it was too late. Following the panic, the price of the underlying coin was in free fall.

Project representatives remonstrated publicly to the effect they had never stolen any funds.  DeFi100, according to them, is too small to have had the audacity to steal investors’ funds. In fact, they never had held any such funds. Scamming and making away with other folk’s money was not a doable thing with the avowedly modest project. 

The project is only an exemplar of the instability and commotion attendant upon the current crypto boom. Regardless of investments to the tune of billions of dollars, there’s hardly any redressal mechanism when things do take the wrong urn. Radical decentralisation is a double-edged sword. It cuts the naïve and the inane rather brutally. Unproven vendors will only have their words taken for what they are worth. There’s no consistent deterrence system in place. Consequently, there’s a gold rush of crypto scams. Bitcoin is Klondike 2021. 

The aftermath 

DeFi100’s website is back, up and running, but the wind of runners do blow sometimes, and they bid only ill. There’s the persistent image of the DeFi100 debacle as a ‘rug pull’. The term connotates scamming, whereby project founders raised investment money and run. This is merely the tip of the iceberg. The mountain of malfeasance extends way down, replete with examples of the extent to which criminal thinkers will go for a fistful of Crypto. Meretricious altcoins, Discord pumps- and-dumps, celebrity impersonators, ad nauseum. 

As you become immersed in the new digital monetary apparatuses known as cryptocurrency, it dawns upon you that there’s risk involved in these transactions. This is not about the volatility of the market. Scams are ubiquitous online, and cryptocurrency exchanges are no different. As you mull investing in varied startups and exchange platforms, be alive to the very real possibilities of losing your cryptocurrency investments.

When you’re scrutinising digital cryptocurrency companies and startups, experts counsel that you confirm that they’re blockchain-powered, implying they track transaction data. Also, check that they have concrete business plans that solve real problems. Companies ought to specify their digital currency liquidity and ICO rules. There should be flesh and blood people behind the company. If the startup you’re investigating lacks some of these attributes, think through your decision with even more caution.

Caveats 

Here’s a look at what to watch out for:

Misleader Websites

You may be following a ‘reliable’ tip from someone with a lot of expertise but still fall victim by accidentally visiting a fake website. There’s a large number of websites that have been set up to come off as original, valid startup companies. If there isn’t a small lock icon indicating security near the URL bar and no “https” in the site address – think again.

Even if the site looks identical to the one you think you’re visiting, you may be directed to another platform for payment. For instance, you click on a link that looks like a legitimate site. However, attackers have created a fake URL with a zero in it instead of a letter ‘o’. That platform isn’t taking you to the cryptocurrency investment that you’ve already researched. To dodge this, carefully type the exact URL into your browser. Double-check it, too.

Ersatz Mobile Apps

Another common way scammers deceive cryptocurrency investors is via fake apps available for download through Google Play and the Apple App Store. Although stakeholders can often quickly find these fake apps and get them dislodged, that doesn’t mean the apps aren’t influencing many bottom lines. Thousands of people have already downloaded fake cryptocurrency app downloads that are so commonplace as to have become passe.

While this is a greater risk for Android users, every investor should be aware of the possibility. For example, are there bald-faced misspellings in the copy or even the name of the app? Does the branding look spurious with strange colouring or an incorrect logo? Take note – think again before downloading.

Bad Tweets and sundry Social Media Updates

In case you’re following celebrities and executives on social media, you can’t ascertain that you’re not following impostor accounts. The same holds true for cryptocurrencies, where malicious, impersonating bots go berserk. Don’t trust offers that come from Twitter or Facebook, particularly if there appears to be an improbable result. Fake accounts are ubiquitous.

If someone on these platforms requests even a small amount of your cryptocurrency, it’s very much possible you can never get it back. Just because others are replying to the offer, don’t presume they aren’t bots, either. 

Scamming Emails        

Even if it looks entirely legit, take care before investing your digital currency. Is the email the exact same, and are the logo and branding selfsame? Can you verify that the email address is legitimately linked to the company? The ability to check on this is why it’s important to choose a company with real people working for it. If you have doubts about an email, query someone who works there. And abstain from clicking on a link in a message to get to a site.

Scammers often broadcast fake ICOs, or initial coin offerings, as a way to steal substantial funds. Don’t be deceived by these phoney email and website offers. 

Crypto Duck test – keeping quacks at bay

Unfortunately, there are many ways that some Internet users exploit unsecured computing systems to mine or steal cryptocurrency. Learn more about staying safe and shielding yourself from harm. 

  • Some scammers masquerading as Elon Musk, the billionaire entrepreneur whose tweets can move the crypto market. The FTC received $2 + million reports in such losses due to Musk impersonators, October 2020 – end of March 2021. A common scam is concerned with a promise that a celebrity associated with cryptocurrency will multiply any cryptocurrency you send to their wallet and send it back
  • Government agencies have had their identities appropriated, too. Many victims reported loading cash into a Bitcoin ATM(a kiosk lets you buy and sometimes also sell Bitcoin) to pay crooks purporting to be from the Social Security Administration. Its Office of Inspector General issued a related warning in early 2021.
  • Crypto scams begin in a variety of ways. For example, they may start with offers of investment “tips” or “secrets” in online message boards that lead people to ersatz websites touting what appears to be chances to invest in or mine popular cryptocurrencies.
  • bogus websites sow confusion. They use fake testimonials and cryptocurrency jargon to appear credible, “but promises of enormous, guaranteed returns are simply lies. These sites even may make it appear that your investment is growing. But consumers who have been ripped off had complained that when they tried to withdraw the purported profits, they are told to send even more crypto — and end up getting nothing back.
  •  Romance fraudsters hide behind many crypto scams. Many victims said they considered themselves to be in a long-distance relationship when their new “love” started chatting about a hot crypto opportunity they had taken advantage of. Close to 20 per cent of the money people reported losing in romance scams in general during the six months ending March 31 went to cryptocurrency. Nearly  $35 million was reported lost from 1,147 such reports, implying a romance scammer was bankrolled by a victim who sent cryptocurrency. Victims “thought they were investing.
  • .Guarantees of massive returns and claims that your cryptocurrency will be multiplied invariably signal a scam.
  •  Cryptocurrencies can be legit investments. Investors make money by selling their cryptocurrency for more than they paid, but there’s no assurance its value will go up. Don’t trust people who say they know a better way
  • Younger adults are more susceptible to these scams. Consumers ages 20 to 49 were more than five times more likely than older people to report losing money to a crypto investment scam during the six months investigated.
  •  Consumers in their 20s and 30s lost more money to investment scams than any other type of fraud. More than half of this age cohort’s losses were in cryptocurrency.
  • The bottom line: “If a caller, love interest, organisation or anyone else insists on handling cryptocurrency, you can wager it’s a scam.

Conclusion

Keep your eyes peeled for signs of fraud. Scammers are always trying to be ahead even of best practices. Do not let conmen in – they will set up a trojan horse, and hollow your endeavours from within. And like the prospectors of the 1890s in the Yukon, these enterprising finaglers will keep at it. The legality of various aspects of crypto trading remains vague. You can keep the pirates at bay, provided you work habits of informed vigilance into your workday crypto trading. 

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