Investing in crypto can seem like a once-in-a-lifetime opportunity, but many of the opportunities found online aren’t everything they promise to be. Cryptocurrency trading involves risks even when working with legitimate investment opportunities. Lucrative markets have attracted scammers from around the world – and online crypto traders are at more risk than ever before.
Cryptocurrency scams around the world defraud their victims of over $14 billion each year. The decentralized and pseudo-anonymous nature of cryptocurrency makes it the perfect target for scammers. They can strike from anywhere in the world, are difficult to track, and often face little to no consequences for their crimes.
When you find a cryptocurrency investment opportunity online, there’s always a risk that you’re dealing with a scam. The scammers could be misrepresenting the potential risks and benefits of an actual opportunity or simply lying about there being an opportunity at all. With cryptocurrency trading, it’s incredibly easy for scammers to simply pocket your money and disappear.
How can you protect yourself from the risks involved in cryptocurrency trading? If you are planning on investing in cryptocurrencies, the standard advice from financial experts is to invest no more than 5% of your portfolio in this area. Only buy cryptocurrencies through established platforms or exchanges. If you’re not particularly tech-savvy, you can purchase crypto-related stocks or ETFs through a regular broker.
The true danger lies in pursuing obscure, unvetted opportunities you find through social media and other websites. They promise unrealistic returns and downplay potential risks. Investors think they’ve found an exclusive opportunity to get rich quick but soon find themselves losing everything.
Below, you’ll find a list of some of the most common methods that crypto scammers use to defraud their victims. It’s important to be aware of these common scams in order to avoid them in the future, but traders also need to understand that no list of scams can be complete. Crypto scammers are always evolving and developing new ways to steal from their victims.
Cryptocurrencies are still relatively new to the world. Regulations and the agencies that enforce them haven’t been able to catch up to the rapidly changing landscape. This provides scammers with many loopholes and grey areas in which they can operate successfully. As these loopholes are closed, the scammers are quick to implement entirely new scams.
When investing in crypto, traders must show caution at all times. You can learn key signs to watch out for, but no simple list of things to watch out for can protect you completely. Take a look at these common crypto scams, always take your time when researching crypto investment opportunities, and reach out to the team at Secure Crypto Recovery if you have become the victim of a crypto scam.
Most traders will rely on a specific crypto exchange, broker, or platform when investing in cryptocurrencies. These organizations facilitate the purchase of cryptocurrencies like Bitcoin, Ethereum, and many more with payment options like credit cards or bank transfers. They also allow traders to trade between various cryptocurrencies.
You should only ever trade with an already established exchange that you know you can trust. While there have been cases of major exchanges collapsing since the early days of crypto, the top exchanges today are generally considered safe.
When looking for places to trade, you may find exchanges or brokers that you’ve never heard of and have a minimal online presence. They’ll try to get you to invest with them by offering better spreads or bonus offers compared to established exchanges. These are generally scam operations that never let you withdraw any funds you deposit and are nowhere near worth the risk of trying out.
Savvy crypto investors will do the research to ensure that the exchange or broker they trade with is legitimate and registered. However, many crypto scams manage to victimize even these traders by impersonating a legitimate organization.
Scammers can copy the websites of a legitimate exchange or broker very easily. The fake website will look almost the same. Only the URL will be any different. When you sign up for such a website, you’ll be depositing funds to the scammers instead of the organization you think you are.
Whenever you find an exchange or broker to invest with, verify that
the URL matches their official website. Don’t follow links received
through email or social media; instead, go to the website directly.
In most jurisdictions, you can check the registration status of any
such exchange or broker and find their
official website through that channel.
Pump and dumps are a common market manipulation scam that dates back to the early years of the stock market. The scammers artificially generate interest around a certain asset, causing the price to rise rapidly. The scammers hold a massive amount of the asset that they purchased when prices were low and sell suddenly once the price increases, crashing the price and leaving everyone else holding the bag.
This type of scam is very common when dealing with any type of cryptocurrency outside of major ones like Bitcoin and Ethereum. Many new crypto projects are actually pump and dump schemes where the creators of the cryptocurrency promise guaranteed returns and growth. Once enough people buy in, the creators sell their significant holdings, which crashes the price for good.
It might seem like getting in on the ground floor of a new cryptocurrency could be an easy way to make a lot of money, but you risk falling victim to a pump and dump or other similar scams.
Many crypto scammers trick victims into investing by claiming that their opportunities are very exclusive. They’ll often prop up this type of scam with fake celebrity endorsements as well, making it look like you’ve just happened to find the perfect opportunity at the perfect time.
When you do sign up with one of these exclusive investment clubs, you’ll soon find yourself pressured to invest more and more. However, you’ll never receive any returns, and the scammers won’t let you withdraw any of your funds.
Avoiding cryptocurrency scams is the best way to avoid losing your money for good, but what if you’ve already become a victim? In that case, you can reach out to the experts at Secure Crypto Recovery for a free consultation. We can discuss your situation and determine if any of our investigative services can help you recover your money and get justice against crypto scammers.
We can help whether you’ve attempted to purchase crypto with credit cards, bank wire transfers, or if you’ve carried out transactions using cryptocurrency directly. Our team has the skills, experience, and tech to thoroughly investigate your case and deliver real results.