While cryptocurrencies have made many people rich, these investment opportunities are often regarded with skepticism due to their volatile nature. However, there are even greater risks in this market such as hacking. Cryptocurrency invest are not governed by a central authority, which means that if you fall victim to a scam or your account is being hacked. Also you are most probably not going to be able to get your money back. Here are some of the main red flags to watch out for while investing in crypto coins.
Celebrities or Influencers Promoting an Altcoin
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Many impersonation scams have leveraged the influence celebrities have on investors, especially novices. By impersonating famous people and posing as them on various social media platforms, scammers have managed to convince people to invest in emerging coins in order to make the price of these coins increase. Once the value was high enough, scammers sold the coins they owned and made a lot of money. However, the rest of the investors were left with a significant loss as the price of those coins suddenly dropped.
Another example of an impersonation scam is the free giveaway. This means that scammers pose as a billionaire or famous person who claims they want to help new investors make money too. They promise to give altcoins for free if people initially transfer them a small number of crypto coins. As you might imagine, scammers simply receive money and never transfer anything back. If you see any social media ads or posts where celebrities allegedly promote crypto coins, take them with a pinch of salt.
Romance Scams on Dating Apps
It’s hard to make a connection between dating apps and the world of Cryptocurrency invest, but scammers are versatile enough to take advantage of these platforms too in order to prey on people. Online romance offers a good background for fraudsters to carry out crypto scams. To do this, they usually lure their victims through dating apps where they pose as potential partners. After they gain their trust, they start telling them about a great investment opportunity in crypto, one that helped them gain good returns.
Since many people are not aware of how the crypto market works and how to buy or invest crypto coins, they agree to transfer money to their online partner, who promises to make the investment on their behalf. Once transferred, both the money and the scammer are gone. Therefore, never trust anyone with your money, not even a potential partner. If you want to invest in crypto coins but you don’t want to learn the ins and outs of trading, there are legit brokers who can do this for you.
There are many types of malicious software that have the capacity to sneak into an account and steal information. Usually, they are sent through emails that contain download links or attachments. This type of malware has also been used to hack people’s bank account and transfer small amounts of money without them noticing it. The same can happen with cryptocurrency accounts. When you buy or sell crypto coins, you need to create an account on an exchange platform. Here, you will deposit money, then buy and trade or hold coins. If someone managed to get into your account and access your credentials, they can transfer your coins into their account. The best way to avoid this is to ignore emails from unknown recipients that contain suspicious links or attachments, use 2-factor authentication, and always make sure no one accesses your credentials.
If you plan on opening your first account on a crypto trading platform, make sure it is an established and trustworthy one. The safest way is to opt for those that have been on the market long enough and have a large number of users worldwide, such as Binance. Transferring money to a shady platform that just emerged and promises to offer coins for free as an incentive is risky because you might actually send money to a group of scammers.
These are just some of the major scams you should be aware of if you plan on investing in cryptocurrency. Also, remember not to put all your eggs in the same basket. If you decide to give Cryptocurrency invest a try, don’t use all your life savings. This way, even if you fall victim to a scam or you invest in a coin that fails, you don’t lose everything. Read more information at Stratford Management Japan.