Cryptocurrency Scams

Cryptocurrencies have become a craze in the last few years, and as such, many scams have emerged to take advantage of this situation. Many people don’t understand how Cryptocurrencies work and as such, they are being duped left and right. Swyftx will help to avoid falling victim to these cryptocurrency scams, you need to be aware of the various ways they can appear on different crypto exchanges. Luckily, this has not yet resulted in anyone losing any money. However, if you aren’t careful, it could happen at any moment.

Cryptocurrency scams usually involve either fake Initial Coin Offerings (ICOs) or fake exchange sites that try to trick people into sending them money for unverified services or products that never actually existed. Read on for more information on various ways of avoiding getting scammed when buying Cryptocurrencies on various exchanges:

Fake Exchanges

There are many ways to fake an exchange site, and one of the most common involves setting up an almost identical site that looks the same as the original (e.g. https://abcd.io/ is almost identical to https://abcd.com/).

To dupe unsuspecting users into sending their cryptocurrency to their fake exchange site, the scammer will use the same logo, and name, and even have the same user interface as their fake site. This is done to trick users into transferring their cryptocurrency to their fake exchange site and then waiting for “the exchange” to happen. The exchange never happens, and the scammers then either disappear with the user’s money or simply keep the funds for themselves.

Moreover, fake exchanges are usually found on less-trusted forum sites and from anonymous email addresses, which is why you should be extra cautious when searching for a specific cryptocurrency exchange. Another way fake exchanges can be created is by using stolen or fake user credentials.

Fake ICOs

An initial coin offering (ICO) is a cryptocurrency fundraising method that allows companies or entrepreneurs to raise funds by selling their cryptocurrency, known as tokens, to investors through various cryptocurrency exchanges. There are many ways to fake an ICO and one of the most common involves creating an almost identical website to the original company’s site and then using the same logo, terms, and conditions, and even having the same user interface as their fake site. This is done to trick users into sending their cryptocurrency to their fake ICO and then waiting for the token to be “launched”. The token will never be “launched”, and the scammers then either disappear with the user’s money or simply keep the funds for themselves. Another way fake ICOs can be created is by using stolen or fake user credentials.

Trusted Wallet Trick

A trusted wallet trick involves the scammer creating a fake webpage or exchange site that looks nearly identical to the original. The scammer will use the same logo, and name, and even have the same user interface as their fake site. This is done to trick users into transferring their cryptocurrency to their fake exchange site and then sending the funds to the scammer’s wallet address.

Immediately after the funds are in the wallet address, the scammer leaves the wallet address publicly available for anyone to see. At this point, the funds are out of the original user’s control and the scammer can do whatever they want with the funds. 

Inverse Exchange

An inverse exchange is when a scammer pretends to be selling a token, but instead of giving the token to the buyer, they simply give the buyer fake tokens. The scammer then uses the fake tokens to start a new exchange and then transfers the real tokens out of the exchange and into the scammer’s wallet. At this point, the scammer has the real tokens and has taken the fake tokens out of the wallet, which means that the fake exchange is now worth much less than it was before. The scammers can then try to either sell the fake tokens or attempt to use them to start another fake exchange. However, the inverse exchange could be traced back to the original scam and the scammer could be arrested, so it’s best to stay away from inverse exchanges. 

Conclusion

Cryptocurrency scams are a real threat that can cause you to lose money if you aren’t careful. These scams can happen on fake exchanges, fake ICOs, Ponzi schemes, and new unregulated exchanges. To avoid getting scammed, you need to be extremely careful when buying Cryptocurrencies and only use exchanges that have been around for a long time and have a lot of positive reviews.