What Are the Cryptocurrency Malpractices That You Need to Be Aware of?

Cryptocurrency scams have impacted the financial industry since bitcoin’s inception. It is estimated that more than a billion dollars have been lost due to these scams. Yet, these scams are responsible for millions of dollars lost each year. We hope you don’t fall for such scams. Therefore, we offer this article which will help you find out more about many of the crypto scams.

These are the types of Cryptocurrency scams

How Cryptocurrency Scams Work

Giveaway scams

It’s unlikely that anyone is offering a legitimate giveaway. To participate, you will need to send your own money. It would be best if you were careful with these types of text messages on social media. They may be derived from accounts that look the same as the ones that the person knows, but this is just one aspect of the trick. You will not get many responses thanking these accounts for their generosity. These are just bots or fake company accounts used as part of the giveaway fraud.

Fake mobile applications

After the customer installs a malignant app, it may appear that everything is working as expected. These apps are made to steal your cryptocurrencies. Many customers were able to download malicious apps that had been created by people pretending to be major crypto companies.

This scenario is where the user is presented with the option to fund their wallet or receive payments. In reality, they are sending cash to the address of the fraudster. There are no cancel buttons once the cash has been transferred.

Pyramid and Ponzi Schemes

Ponzi schemes can present an investment opportunity that has sure profits, which could be the first red flag. You’ll often see this scheme disguised to be a portfolio management company. The “returns”, which are not derived from other investors, can’t be used as a magic formula.

A new pyramid scheme requires more effort from all involved. The coordinator is at the top of most pyramids. They will recruit a set number of women and men to work at each level, creating a large structure that can grow exponentially and new levels of the pyramid.