Fraudsters may use variants of crypto scams to reach their targets and steal their coins. Cyber expert Timothy Benon lays out ways to protect crypto coins.
Cryptocurrency crimes have shown a record-breaking increase in the past few years. A blockchain analysis firm released a statement informing “digital currency scammers took $14 billion worth of coins in 2021. This figure is near twice the amount that scammers looted in 2020.”
Chief analyst Timothy Benson at the same firm stated in a panel discussion, “With the boom in cryptocurrency, it’s no wonder that cybercriminals have taken notice of opportunities for conducting illicit activities. Crypto will continue to attract online scammers despite the high-tech nature and complexities.
Based on complaints received by Cyber-Forensics.net, a cyber forensics service for online scam victims notes that there are approximately 7,000 people in the United States who lost over $80 million worth of crypto from October 2020 through March 2021. In addition, scammers use multiple and highly sophisticated new tactics to trick people.
Benson stated further, “scammers may give a new face to their gimmicks every time they find a new target, but in one way or another, they follow some pattern that investors and traders can look out for.”
Types of Crypto Scams
- Demanding Crypto-Only Payments: This type of online scam seemingly involves scammers posing as official firms claiming that they cannot accept payment in any other form than cryptocurrency. In general, when anyone pressurizes traders/investors to pay in popular coin forms like Bitcoin, it is likely a scam. Moreover, blockchain technology doesn't require a physical presence to open an eWallet protocol. Thus, it's easy for scammers to open wallets without verification or contact information.
- Digital Collectibles Crypto Scams: Crypto scammers can create new games using sophisticated codes and create an entirely imaginary blockchain world. As they do it, this provides an easy way for crypto hackers to generate excitement around their fake games and lure young entrepreneurs into transferring their crypto coins to buy a newly minted game.
- Crypto Investment Scams: Of course, the most obvious way to steal crypto coins from investors is by luring them into spending their funds on prolific investment schemes. But Cyber-Forenics.net warns that these investment schemes can be a fraud. Crypto scammers set up fake social media accounts, fake IDs, websites to sound legit and claim to offer a once-in-a-lifetime opportunity.
Cyber thugs now that the investment sector is rife with traders who are willing to take risks on investments that can bring positive returns in the future.
- Using Fake Identities to Steal Crypto: As already mentioned, setting up a digital wallet doesn’t require the individual to be physically present, which allows scammers to build fake profiles by providing wrong information. “The lack of KYC protocols on the blockchain is a major question mark for its widespread use,” commented Jonathan Padilla, former PayPal head.
Adding to the statement, Crypto recovery expert Peter Thompson says, “since there are no safeguards in decentralized platforms, crypto scammers can fake it till they find their target.”
On a good day, they might even steal a good amount of crypto coins from investors, which is why it becomes highly crucial to protect them.
How to Protect Cryptocoins?
Even the most technologically advanced cyber security firms acknowledge that cryptocurrency is full of risks. And these risks are ever-evolving. Even though the world leaping towards online structures that claim to be completely safe are prone to attacks.
Never invest entire crypto funds in the blockchain: Crypt scams are not immune to scams- an experience that blockchain investor and entrepreneur Ian Ballina who lost $2.5 million, would never forget. Ballina ended up losing millions of worth of crypto coins after his information was compromised by someone who hacked into his account.
Ballina's story highlights the possibility of losing crypto coins isn’t that difficult. Mining scam experts further explain that when dealing with such volatile assets, it is advised to keep crypto holdings to under 5% of their total investment capacity.
Know the Crypto Red Flags: Watch out for the standard warnings signs similar to other scams like credit card fraud:
- Typographical errors and obvious spelling mistakes in text messages, emails, and social media.
- Anything that promises to multiply money in a shorter duration.
- Contractual obligations on payment mode.
- Risk of potentially locking crypto coins.
- Fake social media influencers claiming to be celebrities.
- Beware of psychological manipulation tricks like extortion or blackmail.
- Schemes promising free money.
- Vague details about an investment scheme.
Know when to contact higher authorities: The best way to protect crypto coins is by contacting the best crypto recovery service providers.
In addition, when someone believes that they are about to be trapped into a crypto scam, they should immediately contact the local authorities of their area and, if possible, also hire fund recovery services.
A professional team of cryptocurrency experts will adopt best-in-class strategies to know how scammers targeted their victims and stole their coins.
How to Report a Stolen Cryptocurrency?
When someone believes crypto scammers have targeted them, they should immediately report the suspicious activity involving crypt to the following authorities:
- The Federal Trade Commission (If the victim is a resident of the United States at the website: ReportFraud.ftc.gov
- The Commodity Futures Trading Commission (CFTC) at CFTC.gov/complaint
- The U.S. Securities and Exchange Commission (SEC) at sec.gov/tcrIf the fraud involves extortion or blackmail.
- The victims can take help from fund recovery experts to recover stolen crypto.
Cyber-Forensics.net is the world’s leading fund recovery company that offers fund tracing and recovery services to the victims of online scams including romance scams. It works around the clock to assist consumers and corporate clients across the world who are facing or at the risk of facing online financial scams. For more information, please visit http://cyber-forensics.net.