Recently, popularity in cryptocurrency investments has sky-rocketed. Cryptocurrency is a form of digital currency that uses cryptography to secure its transactions. Types of cryptocurrency include Bitcoin, Ethereum, and Litecoin.
But as more and more consumers around the world buy into the cryptomania, scammers have been making a different kind of investment-developing new methods in order to tap into this opportunity to scam consumers. If you're a crypto-enthusiast, or have friends who are invested in Bitcoin, pay attention to some of these common Bitcoin scams:
Pump and Dumps are typically seen with penny cryptos (or alternative coins). In this situation, investors will aggressively promote a particular cryptocoin on social media and, when the price is inflated, and demand is high, they dump their holdings onto the latecomers.
Investment "Clubs" portray themselves as "experts" in the cryptomarkets. With great customer reviews and testimonials (usually given by fake accounts, paid actors or even bots) of the benefits of joining, these clubs ultimately result in the "experts" stealing your investments.
Fake Exchanges take advantage of the constantly evolving cryptocurrency landscape. While there are bitcoin exchanges, scammers will coax buyers into using their imposter exchange sites to steal your funds.
Fake Wallets tap into the required digital wallet for depositing funds and sending/receiving Bitcoins. Scammers will create a fake digital wallet app and steal the funds as they are deposited.
As you can see, not all cryptocurrency scams are new. They take existing methods and tailor them for this new environment. But what stays the same is how you can protect yourself from falling for these scams-always do your research!