Top Crypto Scams To Watch Out For

Top Crypto Scams

Welcome back to the Tribe! In this post we are going to go over the current top crypto scams, and discuss what you need to watch out for regarding them!

Nothing should be considered investment or financial advice. Enjoy the ride!

Top Crypto Scams

Crypto scams have been on the increase with a ridiculous number of cases reported in the US in 2021. In this post, we’ll be looking at the top scams in 2021, why they are happening, and how you can protect yourself.

Success Attracts the Good and Bad

Despite being a little over a decade old, the crypto market recently went past the $3 trillion mark. That’s over 4 times its value in 2020 and a true testament to its rapid growth in 2021. But like most profitable industries, cryptocurrency has attracted scammers like flies to manure.

In 2020, there were over 80 thousand reported cases of crypto fraud. With that number expected to be surpassed in subsequent years, there doesn’t seem to be any sign of light in this tunnel just yet.

But why are these scams on the increase when people should know better? It’s easy. There are currently over 100 million crypto users in the world and a good number of them joined the industry recently. With the market showing plenty of promise this year, it’s easy to understand why many people are jumping on the train. However, this also means there are lots of inexperienced investors and traders who are easy targets for scammers.

4 Popular Crypto Scams in 2021

Here are the 4 common crypto scams this year:

Social Media Giveaway Crypto Scam

In March 2021, scammers pulled off a major social media crypto heist after posing as Tesla CEO, Elon Musk. All they did was hack a verified social media account, change the name and profile picture to Elon Musk.

With the fake profile, they replied to a legit tweet from the Billionaire with another tweet asking people to send BTC to a digital wallet with the promise of doubling their “donations.” It was convincing and many people fell for it.

The scammers made over $2 million from the heist alone. Social media giveaway scams bank on people’s naivety to lure them to send their cryptos under the guise of doubling it. The best way to avoid them is to stay off giveaways altogether. Especially giveaways that ask for donations first.

NFT Scams

Investors are quite stoked on nonfungible tokens amidst high prices currently being fetched by different pieces. NFTs can be transferred between marketplaces and users on the Blockchains. However, scammers have been known to create fake NFT stores to lure buyers. They usually do this by attracting people with incredibly low prices.

For example, you can buy ApeGang #4510 at 10 ETH currently. But a fake store can offer them at 2 ETH to lure people. To protect yourself, stay away from stores that offer ridiculously low prices. If it’s too good to be true, it probably isn’t true.

But this is not the only NFT scam. Scammers can also steal your tokens by posing as customer support on an NFT page like Discord. Under the guise of helping to fix your problems, they can get sensitive information to steal your NFT. To avoid this type of scam, try to access NFT page servers through their official social media accounts. This ensures you’re connected via legit servers.

Malware and Viruses

Your digital wallet has all your cryptos safely stored away until it’s not. This year, an awful lot of people had their crypto wallets cleared out by scammers. This type of scam is usually pulled by experienced hackers who use malware and viruses to compromise your wallet and gain access. Once the attack is successful, they can transfer your digital assets to their wallets.

Unfortunately, crypto transactions are irreversible. And with no centralized governance, the chances of getting back your lost assets are bleak. However, you can avoid this scam by protecting your digital wallet with 2-factor authentication. You can also prevent malware and viruses by using malware detection software.

DeFi Rug Pulls

People put their money in savings accounts with the hope of earning a good interest from banks. But while traditional financial institutions notoriously offer low-interest rates, DeFi platforms allow users to stake their cryptos similarly but with much better interest rates.

With your cryptos locked in these networks, you can expect to earn a decent amount of money periodically from the DeFi platform. However, some of these platforms are owned by scammers who lure crypto owners into smart contracts to lock their cryptos. They usually attract investors by promising outrageous interest rates.

With your crypto locked in their network, they can steal your assets and disappear without a trace. Again, you can avoid scams like this by staying off platforms that offer you rates that are too good to be true.

Recover Lost Digital Assets

It’s highly unlikely. Bitcoin transactions cannot be deleted from the Blockchain once they’re completed. It’s irreversible and irrefutable. And with no central governance, you don’t exactly have the protection of SIPC or FDIC. This is why it’s important to be vigilant and keep an eye out for these common scams so that you can avoid them!