Scams are a part of the crypto world, but they’re not all bad. In fact, learning how a scam works is a valuable way to protect yourself from being taken for a ride.
Attract crypto users with an initial coin offering (ICO).
An Initial Coin Offering (ICO) is a way to raise money for a new cryptocurrency project. You create a new digital currency and sell it to people who want to use the product or service you are building.
An ICO is an unregulated way of raising money for business ventures, and investors are often attracted by the promise of significant capital gains when they are successful (or claims about how much demand there will be for the currency).
Let crypto users do the work for you
One of the oldest scams in the book is also one of the most effective. The scammer will pretend to be a representative from some sort of organization and then ask you for more information about yourself. Then, the scammer will tell you they need this information to verify your identity or claim that they cannot verify your identity unless they have more information. What happens next is up to them, but scammers may be able to use this information against you later on down the road.
One example of this type of scam is when scammers ask users for their credit card numbers to charge an extra fee on top of their initial payment after it has been processed.
Another typical scam example would be when someone asks you to log into their website using Facebook credentials so that they can send over an email with links or attachments.
In both cases, people mustn’t trust strangers online with personal information like passwords and bank account numbers. If someone does happen upon those details, then nothing stops them from doing whatever else they want with them.
Buy into a scam coin that is pumping
You’ve probably heard of the term “pump and dump,” which refers to a group of people buying into a coin that is pumping. The idea is that when enough people believe in the coin, its price will rise. When this happens, you can sell your coins at a profit.
But there are some risks with this strategy. If you buy into something that isn’t good or has no future potential, it won’t go up in price, and you’ll lose money! So before doing anything else with your hard-earned cryptos, research what you’re buying into and make sure it’s legit!
Create a hard fork of a top currency and scam unsuspecting users
If you want to scam the crypto world, there’s a simple way to do it.
Create a hard fork of a top currency and make lots of money.
Here’s how it works. First, create your coin with the same name as an existing currency. People will buy this new coin because they think they’re getting the original one at a discount.
Then trade your old coins for them. Finally, sell all the new coins for cash on another exchange so no one can trade them back into real money later.
Scamming is bad, but it’s good to know how it works.
- Knowing how a scam works can help you protect yourself from being scammed by other users.
- You should never respond to spam or phishing emails. If you do, the scammer will have access to your computer (or phone) and may use it for malicious purposes like stealing personal information or installing malware on your device that records everything you type and takes photos with the camera without your knowledge.
We hope this article has helped you understand how crypto scams work, how you can avoid them, and a few examples of scams in action.
Scams are not just bad for those who fall victim to them but also hurt those who would like to invest in cryptocurrency but feel unsafe doing so.
By being aware of what scamming looks like and understanding how scammers try and trick people out of their money, we can all do our part in preventing these schemes from taking root.
None of the information on this website is investment or financial advice and does not necessarily reflect the views of CryptoMode or the author. CryptoMode is not responsible for any financial losses sustained by acting on information provided on this website by its authors or clients. Always conduct your research before making financial commitments, especially with third-party reviews, presales, and other opportunities.