You may have heard of pump and dump schemes in the cryptocurrency space, where owners of certain cryptocurrencies artificially inflate their prices by purchasing large amounts of it and then selling it to their fellow investors at a higher price, driving the price up but not actually adding any value to it. If you’re looking to make money off of cryptocurrency but don’t want to end up the victim of a scam, make sure you avoid these top 5 crypto scams in 2022.
1) ‘Pig Butchering’ Crypto Scam
Bitcoin and blockchain technology are still relatively new, which means that scammers have a field day preying on unsuspecting victims. One of the most popular scams right now is the ‘pig butchering’ crypto scam. This scam works by promising huge returns on investments in bitcoin or other cryptocurrencies. However, instead of investing the money, the scammers simply pocket it and disappear. Don’t fall for this scam – only invest what you can afford to lose!
It’s possible that we may see more pig butchering scams over time, with criminals aiming to take advantage of these emerging technologies. You can protect yourself from pig butchering crypto scams by doing research before you invest and learning about these new technologies. Fortunately, blockchain technology is extremely transparent and fraud-proof thanks to its decentralized nature.
Acquiring Free ETH/BTC: Another scam you should watch out for is acquiring free ETH or BTC. Some scammers try to lure victims into believing they can get them free ETH or BTC without having to invest any money themselves. These include apps that promise ETH or BTC rewards if you complete tasks like downloading a certain app, watching ads, taking surveys etc.
2) “Pump and dump” crypto scam
This is a scam where a group of people buy up a lot of a penny cryptocurrency, then artificially inflate the price by talking it up online. When the price is high enough, they sell all their coins at once, causing the price to crash and leaving everyone who bought in late with worthless coins. This scam is often run by anonymous groups on social media platforms like Telegram. Be very careful about getting involved in any pump and dump schemes!
If you want to avoid getting duped by a pump and dump scam, keep your cryptocurrency off of social media as much as possible. Even if someone is telling you about something that will make you money, don’t trust them just because they seem knowledgeable or likeable. It’s better to be safe than sorry. If someone tries to sell you on an idea using lots of buzzwords and claims it’ll be big in a few years but they can’t show any proof, then run away. No matter how convincing they sound, there are lots of reasons why they could be lying.
3) “Rug pull” crypto scam
A rug pull is when a project’s team members suddenly abandon the project, taking all the money with them. This type of scam is becoming more common, so be sure to do your research before investing in any crypto project. Some red flags to watch out for include a lack of transparency, unrealistic promises, and a team that’s difficult to get in touch with. If you see any of these warning signs, it’s best to steer clear.
While it’s not easy to prevent a rug pull crypto scam, it’s still worth taking some precautions. Research thoroughly before investing, and follow online communities that discuss cryptocurrency. If you’re an expert, consider volunteering your time to perform due diligence on a crypto project that interests you—many of these initiatives are fully transparent, meaning their white papers and development will be easy for you to analyze. It might seem like work, but volunteering your time can save you money and help increase transparency in an industry plagued by scams.
4) Airdrop crypto scam
In the cryptocurrency world, an airdrop is when a blockchain project distributes free tokens or coins to its community. Airdrops are usually used to spread awareness about a new cryptocurrency project and to incentivize people to hold the coin or token. However, some scammers have been using airdrops as a way to defraud people. They create fake airdrops and then ask people to send them money or personal information in order to receive the free tokens. If you’re thinking about participating in an airdrop, do your research first and be sure that it’s legitimate.
While airdrops can be legitimate, there are some scams you should watch out for. For example, an airdrop scam may ask you to provide personal information or money in order to receive free tokens. These types of scams are becoming more common so never give your private information or money away just because someone tells you that you’ll get free cryptocurrency if you do. A legitimate airdrop will never ask for money and will always be completely free. If something sounds too good to be true, it probably is. Be sure not fall victim of an airdrop scam by being cautious and doing your research before participating in any event relating to cryptocurrency.
5) Phishing crypto scam
Phishing is a type of scam where criminals pose as a legitimate entity in order to trick victims into giving them sensitive information. This can be done via email, social media, or even fake websites that look identical to the real thing. In the cryptocurrency world, phishing scams are often used to steal people’s private keys or login credentials. Be on the lookout for any suspicious emails or links purporting to be from your crypto exchange or wallet provider, and never click on them without first verifying that they’re legitimate.
One common trick that many crypto exchanges use is two-factor authentication (2FA), where users must enter a 6 or 8 digit code sent via SMS to their mobile phone before they can login. With 2FA enabled, if an attacker is able to get a user’s username and password by phishing, they’ll need access to their phone as well. The biggest issue with 2FA is that even if you set it up correctly, it won’t protect you from malware installed on your machine. That’s why it’s also important to run a virus scanner regularly.