I have been doing a lot of research on such scams these few days and honestly speaking, the range of scams is so huge, it is impossible to list them all down. I mean when we are talking about “magic internet money” and all sorts of scammers will come out to try and trick you out of your hard earned cryptos. Even on Youtube comments and Youtube advertisements, there are plenty of scams. I even had one with the Chinese Digital Yuan and it comes with a well designed video as well. I although believed that you could buy Digital Yuan online and its value will surely rise if it is sold at exchanges. No bros, the Digital Yuan is not a cryptocurrency and even if it does have “smart contracts built-in”, it cannot be easily traded and its value should not raise that much at all. It is impossible for a CDBC to be so volatile. Defeats the purpose of being a CDBC.
Anyway here are some ways you can spot crypto scams and what you can to do avoid them.
- Too good to be true. Yes I have seen yield farms that can generate like 30-40% APY. Pretty common in the cryptosphere, especially for newer platforms or ones offering new token or coins. There are even smaller and riskier farms that can generate up to 50-60% APY but these are still very sketchy. If you are going for these farms, you might want to think twice. Or at least you should only go in for the short term. And for those with like 100% APY, you should never go for them unless you want to have a taste of something called a “rug pull”. Investors should always read reviews (note that some reviews can be fake) and do some research on the background of the platform they are using as well. Generally a good platform should have at least a good number of years behind the company or technology.
- Fake websites. This is actually a pretty common one. I have seen a few that is very well done and actually looks like the genuine website. Always check the URL and avoid clicking on links in advertisements or in emails or through social media. Some could even fool users by having slight typos in the domain name or have sub domains that look like the real thing. Or they could use redirectors. If you are not too tech savvy or just plain lazy, I would advise to only go for the big name platforms instead and type in the domain name directly in your browser and bookmark them afterwards.
- Shitcoins / Shit-tokens. I have never been a fan of these small cap tokens. Most of such tokens are useless and basically just for speculation only. If you are thinking of investing your money into such coins, I would advise you to think twice. MOST of these coins are destined to fail and history have shown this to be true. And quite a lot of them have been rug pulled as well. Just read about this token ironically named “My Big Coin“. And also the infamous Onecoin. The Onecoin project did not even have a cryptocurrency. They basically use some database to store their transactions! So if you are thinking that you can make a fortune by buying tokens on the cheap and then selling them for millions when they go to the moon, think again. It is highly unlikely that this would actually happen. Even if the intent of the creator of the token is not to scam you, what are the chances of a shit token going to the moon? So if you want to keep your hard earned money in your hands, avoid these ICOs or pre-sale coins or some Shiba Inu/Floki projects like the plague. And for god’s sake, do some research instead of relying on some fancy website or video.
- Stealing of accounts. Stealing accounts (userids, passwords and /or keys) dates back to when computers were created. And it is still happening now. There are tons of scams out there with the intent to steal your account and drain everything from your account. From websites that claim to automate trading for you, to helping your trade better, to phishing sites, to fake technical support staff, to fake government tax men..And remember most technical support staff will never ask you for your account password. And never give anyone your private keys to your crypto wallet. If you give them your private key, it is like handing them full control of your wallet and you can say goodbye to your cryptocurrencies in that wallet. For website accounts like trading exchange account, make sure you have 2FA enabled and periodically change your password. I know it can be very troublesome to do and update but that is what you have to do to ensure that your funds remain in your hands.
- Guaranteed. There is no such thing in the cryptomarket. If a project tells you that they can guarantee a big return within a small period of time I will tell you that it is most likely a scam. Just look at how volatile the cryptomarket is. Unless someone has a crystal ball, how is it possible to have a guaranteed return? And if someone can see in the future, why do they need to share the generated wealth? I was checking with my financial advisor the other day regarding my “savings plan” and the first thing she told me is that there is no such thing as a guaranteed amount in returns. All the figures she showed me was the estimated based on past history. So please be aware of such scams.
- Social Media Influencer scams. This is starting to get ridiculous as well. Even the social media sites are starting to ban influencers from promoting cryptocurrencies. Just read about the Save the Kids scam. Apparently this clan (some of whom might be innocent though) have been promoting this Save the Kids coin and then when the time is right, did a pump and dump resulting in quite a significant loss for those who bought the coin. I think this probably did a lot of damage to the image of cryptocurrencies in general. People will tend to link crypto to scammers. And I don’t think this is a one off incident as well. So bros, don’t believe everything you hear from that one cool kid with a Youtube channel or that Instagram page where he seem to spend all his time driving expensive cars and date beautiful women.
- Fake social media sites & accounts. This is getting very commonplace as crypto projects start leveraging on social media to promote their projects out to the public. Especially for successful projects, bad actors are imitating the official social media groups and sites to trick users into believing they are the genuine thing, in order to steal passwords or even funds within wallets. Some of these scams have even fake “official” accounts that look just like the real thing. Again if you find yourself being messaged by someone out of the blue, double check whether they are the official representatives of the project. In most cases, real official accounts for the project will not initiate any conversation with you, especially via private message.
This is just the tip of the iceberg. There are way more scams out there than just these few. The Internet is indeed a scary place. So I would like to end this post by telling my readers to be careful and take everything with a pinch of salt. So take care and may fortune go your way!