Not just ban, also worry about crypto scams: Tips to avoid getting scammed when dealing with crypto coins

Not just ban, also worry about crypto scams: Tips to avoid getting scammed when dealing with crypto coins

The world of cryptocurrency is being increasingly targeted by scammers and gullible netizens often fall for their trap. Here are some golden rules to follow while investing in cryptocurrencies to stay safe from these scams.

(Representative Image: Reuters) (Representative Image: Reuters)
Story highlights
  • Shiba Inu community recently advised netizens to stay safe from the increasing scams around the token.
  • Several such scams have been seen for different cryptocurrencies in the past.
  • As a golden rule, never share your crypto wallet address or key online and do not transfer your holdings to anyone unless verified.

Shiba Inu, the most sought crypto token in the world right now, has come up with an official warning to its investors to be wary of an online scam being promoted through Telegram. The scam has been meticulously framed around the token, leading people to believe that it is a promotion by the official Shiba Inu developer community.
That is how the scammers are fooling unsuspecting crypto investors. How they lure them in is a different ballgame altogether, comprising of tempting jargons like "giveaways" or "airdrop" or simply a "bonus." The Shiba Inu team has warned investors to stay away from any such scams and not to throw away their money to such actors in hopes of monumental returns.

In the latest move, the government of India has outed a list of 26 bills to be presented at the Winter session of the parliament. The list includes the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, which will more or less pave the way for the use of cryptocurrencies in India. The bill has sparked a huge fear among crypto-holders in the country since being public, as it talks about banning the use of all private cryptocurrencies in the country. We have tried to explain exactly what this means, including the very definition of private cryptocurrencies. As people get back to their crypto business after the fear-mongering is over, one problem remains intact within the ecosystem - that of scamming crypto investors. Now, getting back to cryptocurrency scams.

It is not just Shiba Inu, anything that goes to the online space today is a potential target for scammers and other threat actors, more so if it is related to money. Since cryptocurrencies are the hot topic right now, people are ready to dole out their money to get on the bandwagon. Scammers are aware of this and are actively targeting oblivious cryptocurrency investors through several channels.

We have seen this before, of course. Back in May, the Twitter account of Dogecoin issued a similar warning to people against such scams. There were fake claims being spread by threat actors at the time, promising two or three-fold returns on people's investments. Similar promises have been made by the creators of some scam tokens, the recent Squid token being the shining example of that.

Even though we have had many instances as blaring reminders of crypto scams in the past, scammers are always able to find a new set of unsuspecting users with a new fraud. It is easy money for scammers, after all. The hype around cryptocurrency, especially when mixed with the trending topic of the digital space, makes crypto investors anxious to get in. The get-rich-quick instinct then kicks in for many, having seen the meteoric rise of several cryptocurrencies in the recent few years.

You promise big and people throw away their money.

No matter which cryptocurrency or token you look at, the one common denominator in any scam around crypto is this promise. That is also why this is the biggest indicator of a claim being a scam. This brings us to rule number one against crypto scams -

Never fall for a promise of big returns

Understand one thing and understand it well. Scammers are not typically hackers, meaning they don't always go for your safe, in this case, your crypto wallet. They attempt the easier way out, that is to lure you into giving them your money, or crypto holdings.

They do this by promising you big returns in the future. What you, as a user, can do to avoid being a victim is stay away from anything that promises such big returns directly to you. Of course, legitimate cryptocurrencies and tokens also make claims at times. But there claims will sound more like "our token will grow to this [value]...", a very normal endeavour for any community/ company to have, and not like "we will give you 3x returns on your money." There is a difference.

Plus, you should be researching well about any crypto player or agency pushing you for an investment. All the big crypto exchanges also advertise big returns on your investment, pushing you to open an account and start investing, but a simple search about them on the internet will tell you that they are legit businesses and not scams. In most scams, it is the other way round.

Let us say you stay vigilant against such promises in the future. The next attack plan for scammers is to fool you into believing that they are something/ someone else. In short, they impersonate a known crypto service to get your money.

This brings us to fake websites and apps

Over time, several websites have come up that impersonate some of the known crypto websites and services. These are often promoted through malicious emails and message forwards that redirect the users to fake websites. Any information shared on such bogus websites can then reach the scammers easily, including your money.

It was recently reported that scammers are running Google Ads to redirect people to phishing websites that imitate popular crypto wallets. The bogus website then attempts to trick visitors into sharing their wallet passphrase and private key. Once the scammers get the credentials, they siphon off the holdings in that particular crypto wallet.

Similarly, apps named around cryptocurrencies, like Bitcoin, Bitcoin Miner, Bitcoin (BTC) and others, were recently reported on Google Play Store and tried to lure people into spending money on them through promises of big profits in return. The apps disguised themselves as cryptocurrency mining apps that conducted cloud-mining operations, and some of them even found a listing on Play Store's finance category.

It is thus, very, very important for people to cross-check the website address and apps to be alert against such scams.

If you are careful against all such scammers, it only leaves you vulnerable to one particular scam.

A total fraud scheme

This might be of a fraud token or a fraud crypto exchange. Examples of this are the Squid Game token and the South African crypto investment firm AfriCrypt, which vanished with $3.6 billion in Bitcoin investment of users.

To be honest, there is a little proactive measure you can take against such scams, simply because there is little to no chance that you can predict that such a project is a scam or not in its early stages. Though to keep yourself safe completely against any such possible outcomes, you can make it a rule to not invest your money in lesser-known crypto projects, or those which are just starting out and do not have enough credibility as yet.

It is also good practice to do a thorough background check on the platform you are planning to invest your money on. Googling the cryptocurrency name with search terms like "review," "scam," or "complaint" can also help a lot, as others wary of some projects may warn you of stepping into a scam pit at the right time.

So make sure you follow these suggestions and stay safe while enjoying the crypto world.