Summary
There are many digital currency scams in the blockchain field. The most common scams include: extortion, fake trading platforms, gift scams, social media phishing, "clipboard hijacker" malware, phishing emails, Ponzi and pyramid scams, and ransomware.
In this article, we will briefly introduce each scam so that you can learn and master effective measures to deal with common Bitcoin scams and properly keep the digital currency assets you hold.
Introduction
Whenever a new technology is released, criminals will come to hear the news and wait for an opportunity to cheat. Unfortunately, as a borderless digital currency, Bitcoin creates an excellent opportunity for criminals who design digital currency scams.
The decentralized nature of Bitcoin allows users to fully control their investments. However, the disadvantage of this trait is that it is difficult to develop a suitable regulatory and enforcement framework for it. Criminals designed traps to lure users into making mistakes when using Bitcoin, and eventually successfully stealing Bitcoin, while the victims had almost no way to recover their losses.
Therefore, it is crucial to understand the way criminals cheat and identify potential red flags. There are many types of Bitcoin scams that need to be vigilant, and some of them appear frequently. Therefore, we will discuss 8 common Bitcoin scams and related prevention strategies.
Common Bitcoin fraud and prevention strategies
extortion
extortion is a common means of criminals, using the sensitive information in their hands as bargaining chips to threaten others and illegally demand money. They usually require compensation in digital currency, and the most commonly chosen currency is Bitcoin.
Criminals collect or fabricate sensitive personal information, put pressure on victims, and force them to pay Bitcoin or other currencies.
The best strategy to prevent Bitcoin extortion is to carefully choose login credentials, pay close attention to the websites you have visited, and which websites you have retained your personal information. Using two-factor authentication is also a smart precaution. Even if criminals use false information to extort, you can know and take measures immediately.
False trading platform
As the name suggests, the false trading platform is a counterfeit product of the legal digital currency trading platform, luring users to trade here. Such scams usually appear in the form of mobile apps, or can be desktop apps or fake websites. Compared with the "true body", some false trading platforms can almost distort the real with falsehood, and we must carefully distinguish the authenticity. These fake trading platforms look compliant and legal, but their purpose is to steal digital currencies.
They often lure digital currency traders and investors with free digital currency, attractive prices, low transaction fees, and even gifts.
In order to prevent this fraudulent method, we should bookmark the real URL of the legal trading platform and carefully check it before each login. We can also use Binance Verification to check the legality of our URLs, Telegram groups, and Twitter accounts.
As for mobile apps, we need to review developer information, download volume and user reviews.
Gift scam
Gift scam The usual routine of stealing digital currency is to exchange free gifts for small amounts. Criminals generally require victims to transfer the money to a specific Bitcoin address first, and promise to use more Bitcoins as a return (for example, transferring 0.1 Bitcoin to get 0.5 Bitcoins). However, the victim will not receive any gifts after transferring the money and will not be able to recover the funds.
Giveaway scams are numerous. In addition to Bitcoin, criminals can also defraud other digital currencies (such as Ethereum, Binance Coin, XRP, etc.). In some cases, they may request private keys or other sensitive information.
Twitter and other social platforms are the hardest hit areas of gift scams. Criminals often look for opportunities to take advantage of popular tweets, important news and announcements on social platforms (such as agreement upgrade announcements or ICO trailers).
The best way to prevent gift scams is to not seek small profits and refuse all gift activities that require advance transfer. Legal gifting activities never require funding from participants.
Social Media Phishing
Social Media Phishing is a common Bitcoin scam.Like gift scams, such scams are common on social media. Criminals often create accounts on social media, impersonating authoritative experts in the field of digital currency (also known as "impostors"). After that, they send fake gifts through tweets or chat messages.
The best strategy to prevent social media phishing is to check carefully to verify whether the other party is indeed the person. Some social media platforms add exclusive logos to certified users, such as Twitter and Facebook use blue checkmarks.
"Clipboard Hijacker" malware
"Clipboard Hijacker" malware's way of stealing funds is very secret. They hijack clipboard data, and as long as you are not careful, the funds will be transferred directly to the criminal's account.
For example, you want to transfer Bitcoin to your friend Bob. The normal way to do this is that Bob provides his Bitcoin address, which you copy and paste into your own Bitcoin wallet. However, if your device is hacked by the "clipboard hijacker" malware, the software will automatically replace the address with the criminal's Bitcoin address the moment you paste the address. Just send and confirm the transaction and your Bitcoin will all fall into the hands of the criminals, and Bob cannot receive any payment.
In order to prevent such scams, you must always pay attention to the security of your computer and be wary of all kinds of suspicious messages or emails, which may carry infected attachments or dangerous links. Pay attention to the website you are browsing and the software installed in the device. You can also consider installing antivirus software, scanning the device regularly, and screening for potential risks. In addition, it is also very important to update the operating system (OS) of the device in a timely manner.
Phone Email
Phone There are many forms of phishing, the most common way is to use phishing emails. Criminals lure recipients into emails to download virus-infected files or click links to visit seemingly legitimate malicious websites. Such emails imitate the product or service commonly used by users to send messages to them, which is extremely dangerous.
Criminals usually urge recipients to take immediate action in emails to ensure the security of accounts and funds. They may ask the other party to update their account information, reset their passwords, or upload documents, and the goal is usually to collect login credentials and steal account information.
The first step in preventing phishing emails is to check whether the email was sent from the original source. If you have any questions, you can contact the relevant company directly to confirm whether you have sent an email. Secondly, you can also hover your mouse over the link (no need to click) to check whether there are spelling errors, exceptional characters, or other exceptions in the URL.
Do not click on the link even if there are no signs of danger. To log in to your account, it is recommended that you enter the URL manually or open the web page from your favorites.
Ponzi Scam and Pyramid Scam
Ponzi Scam and Pyramid Scam are the oldest financial scams. The deception strategy of the Ponzi scheme is to continuously absorb funds from new investors to pay back investments to early members. Once criminals cannot absorb new investors, the capital chain will be broken. OneCoin is a classic case of the digital currency Ponzi scheme.
Pyramid scam is a business model that pays new members by the number of people recruiting them. Once no new members join, the capital chain will also be broken.
In the pyramid scam, participants need to do more work: the top is the organizer. They will recruit a certain number of people working for them, and these people will also recruit their own people down, and so on to end up with a huge architecture that grows exponentially and expands, constantly producing new levels (hence the “pyramid”)
The best way to guard against these two scams is to carefully study the purchased digital currencies, whether they are altcoins or bitcoins. If the value of the digital currency or Bitcoin fund is derived entirely from a new investor or member, it is very likely that it is a Ponzi scheme or a pyramid scheme.
ransomware
ransomware is a type of malware that locks a user's mobile device or computer so that it cannot access important data. Unlocking unless the ransom is paid (usually Bitcoin).Such software is extremely destructive and will cause serious consequences if hospitals, airports or government agencies are unfortunately infected.
ransomware usually prevents users from accessing important files or databases, threatening them to pay the ransom before the specified period, otherwise the information will be completely deleted. Unfortunately, even if the ransom is paid, we cannot guarantee that the criminals will keep their promises.
We can take the following measures to prevent ransomware attacks:
- install antivirus software and update the operating system and applications in a timely manner.
- avoid clicking on ads and suspicious links.
- handles email attachments with caution, paying attention to files with suffixes ".exe", ".vbs" and ".scr".
- regularly backs up files, and can be restored even if the device is infected.
- Visit NoMoreRansom.org for advice on preventing ransomware and free system recovery tools.
Summary
There are many types of Bitcoin scams that need to be vigilant. However, the first step to preventing being deceived is to understand how these scams are implemented. Only by learning how to prevent these most common bitcoin scams can you protect your digital currency assets.
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