You can lose everything if not careful - Beware of These Cryptocurrency Scams
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Everybody–from the sought-after CEOs to down to the building cleaners, even your hairdresser– is talking about Bitcoin. Reason- skyrocketing price and it is making everybody richer by the day. Thus, it attracts all types of investors—legal or illegal.
The unprecedented hype caused by these digital currencies encouraged people to pull-out real investments and transferred it to cryptocurrencies. Thus, volatility became a very critical issue. In fact, on December 12, 2017, Coinbase halted trading of Litecoin and Ethereum cryptocurrencies. It was also reported that Bitcoin trading was halted, twice within a week. Once, during the December 10, 2017 trading, and another instance, on December 13, 2017 trading.
Seasoned financial analysts have been giving warning about it, but cryptocurrency hype was very tempting. They kept on reiterating that it is not a safe investment and nothing can beat real–goods and services–investments. Yet, investors and entrepreneurs are adamant to join the bandwagon, despite all the odds.
Since it is unlikely for people to concede that cryptocurrencies are risky, the best thing to do is to have threat assessment and solution. Since its conception in 2009, Bitcoin is in a wonky state, evolving in into murky world associated with fraud. Platforms succumbed to cyberattacks, and investors lost millions of dollars. Adding insult to injury, cryptocurrency is not supported by the government thus all monetary transactions are not protected by FDIC.
The primary target of cryptocurrency vultures: platform and investors.
Platforms within the existing cadre of cryptocurrency market are prone to attack from hackers. Two years after its conception, Reuters reported an estimated nine-hundred eighty thousand bitcoins were stolen. In 2014, the very severe Mt. Gox hack almost dried up several investor’s bank accounts. A total of $460 million was lost. Recent events are closely akin but differs in price amounts. The last quarter of 2017 Tether and NiceHash were hacked. Combined total lost reached nearly $100 million.
Socialization is one primary weapon in targeting investors. Online scams are very widespread. Methodologies such as malware, fake wallets, Initial Coin Offering (ICO) fraud, and phone-porting are very common. People must be aware and must not be lured. Precautionary measures must be executed at all times to prevent from all these vultures that are lurking around.
Here are concise descriptions of the four dubious methods and to reduce its associated threat:
Malware:-
Computers–whose owners who are lenient about their software installations–are prone to be infected with malware. With the recent hype about cryptocurrencies, new types of malware have come up with a sole purpose— stealing digital coins, most of which is Bitcoin. One way to combat this dubious method is to install an efficient anti-virus, firewall protection and two-factor authentication and password manager for the log-in process.
Fake Wallets:-
Digital wallets are used to store digital currencies. Thus, these virtual wallets are used as ways for unscrupulous individuals to take advantage. Hundreds of fake digital wallets are developed to scam the investors and steal their earnings. Vigilance is the best method to combat this unethical activity. Research the background of your preferred digital wallet provider and choose the one with excellent track record.
Initial Coin Offering (ICO) fraud:-
Due to its unprecedented hype and its unregulated environment, cryptocurrency market is plagued by scammers. There are two scenarios for ICO fraud to happen: (1) creating fake ICOs and (2) ICO mimicking. The first method targets gullible investors through their fake ICO and steal the investor’s money. The second method is hackers mimic a known and legitimate ICO and lure investors to invest their money instead of going to the legit ones. Thorough research is the best method to combat these illegal activities. Check legit sites and do not be overwhelmed with tempting offers, especially those sent through e-mail and social media.
Phone-porting:-
Phone-porting is somewhat similar to mobile phone identity theft but particularly engaged with crypto currency transactions. Activities include phone number acquisition, password reset and digital currency theft. Mobile phone security must be extremely utilized at all times. Secured authentication such as unique PIN, verification question and SMS two-factor authentication.
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