SteemCryptoAcademy Season 3 Week 5 - Homework Post for Professor @yohan2on | Crypto Scams & How To Avoid Them.

Hello crypto students, welcome to yet another post of the crypto academy task. In regards to the lecture of professor @yohan2on where we learned about crypto scams, I will be sharing with you my research based on this topic. Let's together.

What are Crypto scams? And My Research on Recent Cryptocurrency Scam with Reference

Many of us have been into cryptocurrency, and we also know that this kind of currency is not regulated by centralized Bodies. It is not like our traditional banking sector where permissions are not given to the participants which is why it involves many scamming activities. In the crypto ecosystem, users are given full access their assets.

Scamming activities in the crypto space refers to when a fraudster make use different method in order to rub/steal cryptocurrency from users. These activities are carried out in such a way that the victim will not be able to understand until the intended reaction will be carried out which is to rub users of their assets. These fraudulent activities in cryptocurrency comes in different forms that normally confuse users to fall victim of this act. Let's see some of these forms below.

Fraud By Hacking:

---

This one of the ways of rubbing users of their assets, although the cryptocurrency network is meant to be a strong and secure ecosystem as all transactions are been connected to a blockchain, and we have learned from the prior lectures that blockchain makes use of nodes that are very difficult to hack.

But reverse is the case, every day hackers look for method of hacking wallets and because cryptocurrencies are not regulated by government bodies, immediately they got hacked, they are gone for ever. Let's take a look at some notable hack event in the crypto space.

• In 2016 Bitfinix was hacked which led to a lost of over $60 million of Bitcoin by Hong Kong Based Exchanged.

• Another Hack attacked occurred in the same 2016 where a venture capital firm that was operating through the Ethereum blockchain lost 3.6 million ETH worth of $70 million.

• In 2017, a NiceHash attack was recorded where hackers penetrated through a payment system of a Slovenian BTC mining company, and was able to hijack $64 million.

There are other notable hacking event that led to loss of fund. Let's see another method of scamming activities.

Fake Crypto Wallets and Exchange Place.

---

This is another means of scamming users in the crypto space. Here, hackers that are very good in programming language can just go and develop a wallet/exchange platform and then lure users to fund the wallet.

I happened to have experience this kind of scheme where, I opened my phone and got a message that I have won $10,000 worth of BTC and was given a code that I will use to prove this winning. Knowing full well that, I didn't participate for any event that will make me win such amount of $.

I gave it a try and at the last stage to confirm winning, I was prompt to deposit 0.1 BTC in order to claim the winning. Then I got a clear view that it was a scamming activity.

The 2017 Bitcoin Gold wallet scam is a good example. A clever hacker convinced the creators of Bitcoin Gold — a newly launched, legitimate spinoff of Bitcoin — to promote the site mybtgwallet.com for storing it. The creator of this site then stole over $3 million in Bitcoin and over $200,000 in other currencies. - ^source

There too many scamming schemes, but will not be mentioning because of the limited words per rule by the professor. I have gone on a research about some scams around the crypto space, while I was researching, I got a very pathetic news of a scam that happened in Tokyo Japan. Based on the research, it is said that a cryptocurrency company called "coincheck" was hacked and nearly $500 million was hijacked. See the below link for reference purposes.

The 2018 Coincheck hack.

Furthermore, the coincheck could not disclosed how this intruders got to access their systems, but has clearly stated that the hack was not from the inside. You can refer to link above for more information.

It is very important to note that companies are prime targets of hackers, so as a crypto-enthusiast you're advised to securely store your coins in decentralized wallets like trustwallet and likes of it instead of keeping them in the exchange wallet.

To what extent have Crypto scams affected the Crypto space?

Since the inception of cryptocurrency scammers has always find means to penetrate and rub user s of their coin, and this has affected the forthcoming of crypto.

Government bodies find it very difficult to regulate it because of this high scamming issues, when you tell a potential investor about cryptocurrency, they will not always adhere because of the mentality of getting scammed.

The current situation of cryptocurrency in my country is that no financial institution should deal with crypto, this is because of the high rate of scammers, every body in the financial sector are just afraid of investing in cryptocurrency.

Will regulations in Crypto add value to the Crypto space?

Regulating crypto as most people think maynot help the issue of scamming. I view a scenario where centralized authorities are included in the blockchain, even as centralized authorities are there scammers are still penetrating.

Regulating crypto can only decrease the high rate of scamming activities but cannot eliminate it entirely. It is important to not that in every organization there must be leakage. Scammers don't get tired they are looking for every method to penetrate and carry out their scamming activities.

My view on this section is that, regulating crypto can only reduce the high rate of these activities but cannot eliminate it entirely.

Note - this post is written in average because of the rules given by the professor. We are expected to create an article with the minimum of 600 and maximum of 1000 words.

Thanks to the prof for taking us on this interesting topic. It was a wonderful time researching about this topic.