Crypto scams can take various forms and are constantly evolving, that’s why so many people and companies fall for them. There are dozens of scams in the crypto space that you need to avoid.
1. ICO Scams
A recent study showed that 80% of ICOs launched in 2017 were identified as scams. One of the most popular ICO scams is Confido. In November 2017, after raising $375,000, the Confido development team disappeared from the internet. Soon after this news spread, its token price dropped from $0.60 to $0.10 in less than 2 hours and then continued to plummet a few hours later.
An even more notorious ICO scam is Centra, which raised $32 million and was backed by celebrities Floyd Mayweather and DJ Khaled. In April 2018, the two founders were arrested and like Confido, this coin lost almost all of its value following the news.
2. Fake Giveaways
Be aware of groups and users on social networks (Facebook, Telegram and Twitter) who can impersonate famous figures in the crypto world or billionaires like Vitalik Buterin or Elon Musk, to offer valuable tokens/coins. Whenever you read a message like “Send 1 ETH to this address wallet and get X amount back”, it is definitely a scam. Remember cryptocurrencies are still money and no one gives free money.
3. Fake Exchanges/Websites
Fake exchanges/websites are fraudulent copies of legitimate cryptocurrency exchanges or websites that are used to steal money and user’s personal information. Always double check the URL and only visit official websites. Some fake websites are very similar to the original ones, so be careful!
4. Fraudulent Ads
Pay attention to advertisements that link to fraudulent websites. There are a lot of Google Ads for fake exchanges. Be sure to bookmark legitimate URLs and don’t login other URLs even if they look similar.
5. DNS Hacks
Even a decentralized exchange (DEX) like Etherdelta and MyEtherWallet have both been victims of DNS hacks. A DNS hack occurs when traffic is redirected from a legitimate website to a phishing site. This means that even if the user login correct URLs, they will still be redirected to a fake site.The best way to avoid DNS hacks is to check the SSL certificate of the website you are visiting. If the SSL certificate doesn’t match or is corrupted, exit the site immediately. Another way to prevent DNS hacks for MyEtherWallet and MyCrypto is to run their local (offline) copy on your computer.
(To be continued)
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