The Five Most Popular Cryptocurrency Scams You Need to Know About
Yesterday I was listening to Charles Hoskinson talk about cryptocurrency scams and people impersonating him. Hoskinson is the founder of Cardano (ADA).
In the video, Hoskinson immediately said he would never invite you to send him cryptocurrencies. He added many accounts were trying to impersonate him on social media.
If you have been on social media long enough, you may have seen some of these scams. Some people don’t care about you and they want to take your money.
Personally, I have been a victim of two cryptocurrency scams.
The first one was a Bitcoin mining scam about three years ago. I invested in a company that did the mining.
I won’t say too much since an investigation is currently ongoing with this.
The second one, I sent someone Bitcoin who I thought was a popular YouTuber. I was naive and very new to cryptocurrencies and fake accounts. This incident was in late 2017 or early 2018.
Today, the average loss in a cryptocurrency scam is reported around $1,900 per person.
The Federal Trade Commission (FTC) points out these warning signs.
Scammers guarantee 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. (Those are easily faked.)
Scammers promise big payouts with guaranteed returns. Nobody can guarantee a set return, say, double your money. Much less in a short time.
Scammers promise free money. They’ll 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.
No one is ever going to give you money in exchange for your investment. The FTC highlighted the red flags you need to always think about.
These are the top five scams you should be aware of.
1. Fake users
On social media, it is easy for someone to create a duplicate site of a person. I was about to say create a duplicate of a famous person but I recently had a duplicate page of myself created. For someone to create a copy of a page is not that hard these days.
If someone could create a duplicate page of me, then it would be easy for someone to create a page of anyone.
You may have seen some cryptocurrency YouTube creators give a warning not to send them any money and that they would never ask you to send them money. Just about anyone can be duplicated. So be very careful when responding to these fake accounts. Otherwise, you might lose some of your money or cryptocurrencies.
2. Sending and receiving cryptocurrencies in return
Some scams will ask you to send them cryptocurrencies, and the person would double or triple your investment. Be careful falling for these scams. No one can guarantee this.
You are much better off keeping your money.
3. Invited to go offline to talk about a revenue project on Whats App
Too many scams like you to go offline to Whats App or another platform. Once there, they will give you a pitch on why they need money or how they can invest your money for you. Be very careful of these scams.
4. Selling fake cryptocurrency mining equipment
With a global chip shortage, some scammers will sell fake mining equipment. To capitalize on this, some scammers are selling fake mining cards and equipment.
Going to an online site such as eBay, Amazon, or even Facebook marketplace may sound like a good option. Be sure to check out what the person is selling. Read the feedback from the seller’s buyers. Ask as many questions as you can. If the person can send you a live video of what they are selling, this may help.
After you find out what cryptocurrency mining equipment they are selling, do your research. You don’t want to buy outdated mining equipment. Mining equipment becomes outdated as fast as your latest iPhone.
5. Fake cryptocurrency projects
Be very skeptical of new cryptocurrency projects. The projects themself might be good. But over the years, too many cryptocurrency projects have become scams.
If you get scammed or suspect a scam, you should contact these organizations
Cryptocurrency scams can be reported to the FTC, the Commodity Futures Trading Commission (CFTC), the U.S. Securities and Exchange Commission (SEC), and the cryptocurrency exchange company that you use.
Scammers want your money. You have to do your best to hold on to your money and not let it fall into someone else’s hands.
