With the prices of cryptocurrencies increasing dramatically over the last few years, scammers are now actively targeting potential investors. The results often mean investors lose their original investment.
The most common cryptocurrency scams are:
You may see the investment opportunities of Bitcoin and other cryptocurrencies being marketed on social media and via email – these will send you to fake exchanges which can often disappear overnight.
Make sure websites are HTTPS secured – although this is no guarantee the site is genuine – but the most important thing is to do your research and seek out reviews of sites.
Wallets are primarily about storing your cryptocurrency and not buying or selling it. Fake wallets are scams for malware to infect your computer to steal your passwords and other personal information.
They are not easy to spot but sites like Bitcoin.com, for example, do recommend wallets for mobile and desktop users and provide a simple, secure way to send and receive bitcoin.
Phishing is when someone tries to trick you into thinking that a website or company is genuine. Scammers can contact you in a variety of ways including an email you have received containing a fake link, a brochure you have received in the post or through a fake advertisement. They will often encourage you to make a transaction, but this will be fake, meaning you’ll lose your cryptocurrency or investment as a result.
Alternatively, it could be an opportunity for scammers to place malware on your device to steal your personal details.
Ponzi scams usually involve making strong or unrealistic claims about the returns you are able to make by investing in cryptocurrencies. They often have referral programmes to encourage investors to sign up their friends and families.
In reality, most people will lose some of all of their investment in these types of schemes.