How to Avoid Cryptocurrency Scams: Essential Tips from LATOKEN | Posted by LATOKEN

Cryptocurrencies are valuable assets and fraud is an integral part of the existing reality in all industries, especially those with high revenue.

There will always be people ready to take advantage of others’ incompetence and desire to make a quick profit. There is always a risk of being deceived by a scammer. But you can avoid it, or at least reduce it. Then we will help you.

The LATOKEN team has prepared a list of the most common and well-known scams widely used in cryptocurrency. We hope this information helps you avoid problems.

Fake exchanges, wallets, projects

This is one of the simplest types of fraud. Scammers offer products or services specifically designed to extort money from people.

In recent years, there have been a lot of scam exchanges, fake wallets and coins that literally cost you nothing. Sometimes they seem like well-known and recognizable companies. Others are trying to appear professional to gain trust. Anyway, once they get your money you won’t hear anything more about them.

The best way to protect yourself from these scams is to take the time to check everything thoroughly. Only follow links you know are trustworthy, track community comments, and hear what others are saying about these services.

Another popular form of scam is “giveaways” on Twitter and other social networks. Fraudsters often copy the accounts of well-known people – developers, entire companies and even celebrities – and promise to transfer money to those who sign up for the “program”.

You will likely be sending a certain amount of coins to a specified address or providing personal information. Anyway, it’s always a scam. No one is giving away coins for free. Cryptocurrency scams have become popular due to their ability to maintain anonymity. You should never believe anything you promise.

Fraudsters showed off their considerable power by compromising some of the most popular Twitter accounts. This happened in July 2020.

Some celebrities in the United States also posted similar tweets, including Joseph R. Biden Jr., Barack Obama, Kanye West, Bill Gates, and Elon Musk. “Send us Bitcoin and we will double your money back.”

If LATOKEN or any other organization decides to host a sweepstakes or organize a contest, remember that a legitimate organization will never ask you to send money first.

financial pyramid

A pyramid is a type of scam that requires a constant influx of new “investors.” Typically, they require an initial investment and promise big returns. But in reality, only the first investors benefit because it brings new participants into the scheme. But sooner or later the pyramid will collapse.

As money flows through the funnel, the person who created the pyramid receives the principal. Most people are left without any benefit or money.

One of the most famous examples of this type of scam is BitConnect. The project, which turned out to be a financial pyramid, raised billions of dollars from investors and left behind worthless coins.

Although the referral program proposed by the BitСonnect provider no longer exists, the cryptocurrency space is still full of such schemes. Your best defense here is to study the project carefully. Take the time to learn all about where you will be investing your money. Unrealistically high and fast profits should set off alarm bells.

traditional scam

Modern scams are generally not that different from scams that have been used to defraud investors for years. This may include phone calls, emails or text messages promising rewards for entering various competitions or, worse, threatening lawsuits and even blackmail. Anyway, this is all a hoax and an attempt to lure or scare unsuspecting people into paying money.

Despite everything, scare tactics are sometimes much more effective. Scammers may be sending text messages on behalf of tax or other regulatory authorities. They may threaten to post private videos made from the victim’s webcam if they do not pay the blackmailer Bitcoin.

There are a million scenarios, but they all feel like one big lie. LATOKEN or any other authorities will not contact you this way, and obtaining sensitive personal information is much more difficult than lying.

The text or email variant of this scam is called phishing. The message appears official and important and encourages victims to follow the link for more information. Usually, simply clicking on a link starts the installation of some malicious software.

Even if the email you receive looks completely similar to one you’ve already received from a legitimate cryptocurrency company, check everything a few times. Are the logo and brand image the same? Is my email address legitimate? Is it official?

Let’s look at the next important category of fraud: viruses.

malicious software

A virus is a program designed to steal money or data from your device. Functional principles may vary. Some people install utilities that record everything you type and transmit this information to scammers. This is how we find your login information and password.

Some programs search the clipboard. If a wallet address appears there, the virus automatically changes it to the scammer’s address. If you copy and paste the address, check it 2-3 times before sending the money.

Another type of malware is ransomware. These viruses encrypt all of a user’s devices and promise to unblock them only after the victim sends them some (or a lot) of cryptocurrency. This type of malware often attacks large corporations and public institutions who find it easier to pay the cost than to lose their entire computer network.

Want to defend yourself against these kinds of attacks? If so, don’t click on anything you’re not 100% sure about.

“Pump and dump”

Another common scam comes from small, organized groups spreading rumors about little-known coins. They first buy directly and then launch social media campaigns to generate interest in the project and attract investors.

As more and more people want to take advantage of investment opportunities, prices rise rapidly and FOMO (fear of missing out on a good opportunity) occurs.

As soon as the craze reached its peak, the organizers of the scheme dumped their coins, triggering a mass exodus of investors who began to realize that the scheme was collapsing and they were losing money. Only cheaters win. A sure way to avoid this is to study the markets very carefully without falling into mass hysteria.

Here are some of the most common types of cryptocurrency scams. But keep in mind that criminals these days are smart and are always looking for new ways to fool unsuspecting investors.

LATOKEN’s best advice in this situation is to not rush and never invest quickly or emotionally. By following our advice, you can avoid all risks and dangers.