Steemit Crypto Academy Contest / S6W5 - Common Crypto Scams And How To Avoid Them

in hive-108451 •  2 years ago 
Hello Everyone!
Asalam Alikum! I hope all Steemains and members of the community are fine and enjoying their life with family, friends and loved ones. Today I am here to take part in the Week 4 contest by SteemitCryptoAcademy. The topic of the contest is "Common Crypto Scams And How To Avoid Them" and I will try to share my knowledge on it.

Steemit Crypto Academy Contest  S6W5 - Common Crypto Scams And How To Avoid Them.jpg
Freepik Icon and Created on Adobe Photoshop

Explain Your Understanding Of Crypto Scam
Before we understand what is "Crypto Scam", let's quickly know what is a scam. A scam is a deceptive scheme or a cheating method that result in stealing your money or important assets. It is also a verb meaning of cheating someone in unique way, like a bank will never call you for your credit card number and security code, but a scammer will call and act like he is a bank person who needs your data so your account and money both remain safe.

In digital world, scammers are moving towards crypto scam which means your cryptocurrencies can be stolen in different ways. As cryptocurrency is hard to recover once taken or stolen, scammers are becoming more active on crypto platforms. The cheater or scammer will try to get your passwords and private key to move funds from our wallet to his wallet and as blockchain is decentralized, you can't recover your funds.

The main thing that make us the victim of crypto scam is greed. Mostly hackers and scammers will show you money and share the scheme to double or triple the money just by sending it to address. They will make famous celebrities fake pages and share fake screenshots done either on Adobe Photoshop or through browser's Inspect Element.

Crypto Scammer.jpg
Source Pexels

There are three main reasons why cryptocurrency is attractive to the scammers and hackers i.e. decentralization, irreversible, and pseudonymous.

  • Decentralization: As decentralization is nature of blockchain, we can't do anything but can move to centralized exchanges (CEXs).

  • Irreversible: Second reason is irreversible which means once cryptocurrency is sent, there is no way to retrieve it. You can't do anything to reverse the transaction.

  • Pseudonymous: As there is no name but the wallet addresses in cryptocurrency, so it is not possible or extremely hard to track the specific user and if they have hidden themselves, it becomes impossible to find them.

You might have seen some Steemit accounts are sharing malicious links in the comment section of popular publications. People on these posts usually click on the links and it lead them to scammer website or a page where they ask for private key or seed phrase to access your wallet. It may also be possible that a software automatically installs on your laptop or PC which can steal your passwords. So its recommended to not click on any non-trusted link on Steemit or on any platform.

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Explain The various Types of crypto Scam
There are multiple different crypto scams today and we need to be aware of all of them. I will try to explain one by one because with knowledge we all can be safe from hackers and scammers.

1. Fake Websites/Apps

The first and easy scam is through fake websites, links and wallet apps. It requires less money to create a website but can result in big scams. Scammers usually create fake trading platforms and websites offering doubling and tripling of the money which is very attractive to most of us. They also create fake applications or wallets of famous wallets to trick victims. Such websites or apps are similar in terms of design but domain or app name is little bit different. You need to check the website properly before inputting your credentials.

2. Phishing Scam

Phishing scams are not new and Facebook users and website checkout pages were the real victim of it. Now due to popularity of cryptocurrency, scammers are focusing more on crypto than any other platform due to it's decentralization. The main focus of scammers is crypto wallet private keys which they get with phishing attempts. The above website type is the one phishing scam method. Second is sending emails to attract recipients to enter their credentials on a website that will double their money within 1 minute or more. Once scammer gets the private keys, he will change it immediately and you loss your funds.

3. Pump and Dump Coins

In this crypto scam, the hype is created by the scammers and fraudsters either through emails or social media platforms specially Telegram, Twitter, Instagram, and Facebook. They do fake pump or tell people that you are getting this coin in lowest price and tomorrow at this time it will do 100x to 1000x. The coin or token either do 100x to 1000x but for one second in which investors can't sell it or they just run away with the money. Moreover, scammers also succeed in inflating the price and then their sell their holdings which result in sudden drop of price. This happens within few seconds and the user either stuck in the trade or they just sell it at -10x to -100x price.

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Source Pexels

4. Fake Celebrity Pages/Endorsements

Another type of crypto scam is fake endorsements from celebrities, businesspersons, crypto analysts, and influencers to attract people. They try to sell fake or never existed cryptocurrencies to the novice users. As we can seen Elon Musk is active in crypto buying so scammers do fake endorsements of him and ask people to get send 1BTC and they will return 10BTC. Moreover, they share fake proofs of their fake accounts that they get 10 or multiple BTC from Elon Musk. One must ask himself, why Elon Musk will give free BTC or money?

5. Fake High Price Coins

This type is my personal experienced one in which the scammer will send you coins or tokens in bulk quantity and their price is high. The issue is they will not allow you to convert them to any other coin through any exchange like pancakeswap and uniswap. They ask you to send all amount to their desired website and connect your wallet by putting your credentials there. Once you put your credentials/private key, the scammer immediately transfer your funds to his wallet and you will loss all of your money in few minutes.

6. ICO Scam

The last one I know is the ICO crypto scam. ICO basically stands for "Initial Coin Offering" which means that before a coin listed on any exchange, there will go through ICO process where fundraising is done for the project. The owner of the coin tells the victims that they can get coin at very low price and when it will be listed on the market, you can sell at very high price. In this crypto scam type, they get the money from investors and never launch a coin and run away.

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How Can We Do In Other To Spot This Types Of Crypto Scams.
Due to the popularity of cryptocurrencies, many people in the past and still are becoming victims of crypto scam. There are few points that if you follow without greed and full attention, then they can save you from any kind of crypto scam in the future. Here are few points that help to spot crypto scams:

Guaranteed returns: No financial investment in this world can give you returns for sure. Your investment can become half or go up to double or triple. If any cryptocurrency owner is promising for the guaranteed returns, never take that as opportunity but it is a red flag or a trap.

No or poor roadmap and whitepaper: The most important part of any cryptocurrency is the proper whitepaper and roadmap. In every ICO, there is a whitepaper and if one coin has no or poor whitepaper avoid it.

Excessive marketing: There is no harm in promoting your business. But excessive marketing on social media, offline and online advertisements, paid influencers is something else. The fraudsters are trying to reach as many people as possible in short time to offer their coins and to raise money. If this is the case in the coin you are thinking to invest, stop and do some research.

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Source Pexels

Hidden team: You can see all businesses or company not only in cryptocurrency have proper team with their real names. This helps to know which person is at what position and they can be found if needed. In crypto, all scammer coins will hide their team and real names from public and show fake names. If you can't find real ones, stop thinking to invest in that project/coin.

Offering free money: Nothing in this world is free and you have to earn it. So if anyone is giving you free money in cryptocurrency, it is likely to be fake.

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Have You Ever Be Scammed Before? Or Have A Person That You Know Ever Be Scammed? Explain To Us The Incident.
No, I have not yet scammed by any scammer because I have not much investment left in cryptocurrency. But I think I want to share here is a type of scam I see in my wallet but because I am an IT student, I didn't fall for it.

The scam I personally checked but was not a victim of it was fake coin. I will share the screenshot of the fake coin below. The name of the coin is MNEB and it came to my wallet in big quantity. First I checked it by swapping it to BNB and found it's price is high and I can get hundreds of BNB. But when I try to swap it to BNB, it said "The input token cannot be transferred. There may be an issue with the input token." I tried to swap it to other cryptocurrency but still the error was same. Then I do some research on this coin and found it is a scam coins.

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Screenshot of Pancakeswap Wallet

The purpose of this coin was a victim go to the fraudsters website and connect their wallet by entering their private key. Once the key was entered, the scammer can get access to all of our funds and can transfer it to his address/wallet within few seconds. But Thank God I did not became the victim of this scam. Later I moved my funds to Binance and sold some and now have very few funds for which I am doing some testing. I suggest to not fall for such crypto scam because "THERE IS NO FREE MONEY IN THE WORLD"

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How Can One Protect Himself From Crypto Scam
Above we have discussed the types and how to spot crypto scams. Now we will see possible ways to protect ourselves from such crypto scams. To protect yourself, you need to use common sense and some security measures which are:

Protect your private key and wallet: In order to invest in cryptocurrency, you must have a digital wallet with a private key. This is needed for decentralized platforms and not for centralized platforms because in CEXs you just need to protect your password and not wallet. It is recommended to not share your private keys to any person or institution no matter what he says to you.

Send testing amount to wallet app: Before sending big amount to your wallet app, try to send a small amount like $1 or less. If the app is real, you can see your $1 there but if it is a scam app, you will immediately loss your $1.

Take time and relax: Mostly fraudsters will use high-pressure on you to invest quickly in their coin. They will show countdown timer to you and will say you have few hours left so invest right now. I suggest to take your time and do some research before investment. Don't become victim.

Not trust social media posts: Mostly fraudsters and scammers will use unauthorized celebrities images and fake endorsements to catch your attention. It is important to check the real social media account of the celebrity because a celebrity always share his/her endorsements on their social profiles.

Read whitepaper: It is important to read whitepaper of the cryptocurrency because developer will share all details in it. They will show which technology they are working on and what is the purpose of this coin. A poor or non-existence whitepaper is the sign of crypto scam.

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Final Words

As the cryptocurrency popularity is increasing so does the crypto scams. It is important that we protect ourselves from such crypto scams by doing proper security measures and use our common sense. A lot of people in the past have been scammed and still some are becoming victim of it. But I know from time to time, people will learn to deal with it and will no longer fall into it. My and all Steemians who are writing on this topic must share protection tips not only on Steemit but also on social media and with their friends and family so as many as possible people stay safe from such scammers doing crypto scams.


This is all from me for the "Steemit Crypto Academy Contest / S6W5 - Common Crypto Scams And How To Avoid Them." I would like to invite @ranartblog, @samminator, @hunzlakhan, and @reeta0119 to take part in this contest by sharing quality content.

Thank You!



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Take time and relax: Mostly fraudsters will use high-pressure on you to invest quickly in their coin. They will show countdown timer to you and will say you have few hours left ...

I love the way you explain the Take time and relax aspect of protecting once self against swindlers. They know we don't think straight when we are in a hurry so they often mount pressure to act quickly giving the victim practically no time to think through their actions or get informed.

Thank you for giving your valuable feedback :)

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As always my boss, you keep delivering excellence in your tasks, and I love reading from you.

You would agree with me that the cryptocurrency market has grown too big, which has resulted to huge numbers of malicious actors looking to take advantage of other investors
From fake investments to Ponzi schemes and phishing attacks, it’s important to stay vigilant and protect yourself from these crypto scams.

The most important part of any cryptocurrency is the proper whitepaper and roadmap. In every ICO, there is a whitepaper and if one coin has no or poor whitepaper avoid it.

You said the truth here brother, It's important to always note that every legitimate ICOs must atleast have an clear and understandable whitepaper outlining the details of the project, including the team members, mission statement, token economics, and more. If a project does not have a whitepaper, it is likely a scam.

Your tasks are very detailed and well explained, Which shows you put quality time into what you do. Thanks for sharing and goodluck in this contest.

Thank you brother for kind words. I hope we all stay safe from such scams in present and future.

Upvoted! Thank you for supporting witness @jswit.

track the specific user and if they have hidden themselves, it becomes impossible to find them.

Yes that is a genuine concern that adds fuel to fire.

You have given thorough account of six major type of scams. We have other exams like rug pull, romance scam, sim swap scams etc.

Good luck.

Yes, there are many other types which I searched now. I was aware of the rug pull crypto scam but I thought it is the same as ICO scam and pump and dump ones. Because in both scams the main purpose is to bring as many investors as possible and then run away with their money.

BTW, Thank you brother for highlighting more crypto scam types. I appreciate you read my article :)

Greetings dear. You say something very true: scammers are everywhere and the #steemit platform does not escape their intentions, so we should never click on links that offer juicy rewards. Agree with this:
You might have seen some Steemit accounts are sharing malicious links in the comment section of popular publications. People on these posts usually click on the links and it lead them to scammer website or a page where they ask for private key or seed phrase to access your wallet. It may also be possible that a software automatically installs on your laptop or PC which can steal your passwords. So its recommended to not click on any non-trusted link on Steemit or on any platform.

Very detailed explanation. I liked reading you. successes!

Yes that is what I recommend to all my dear Steemians to not click on any link that looks suspicious because it might be there to steal your passwords.

Guarantees to keep asset keys very secret to be safe from hackers' phishing attempts .. :)

Yes we should never put our keys on non-trusted wallets' login. I suggest everyone to keep the private keys and other passwords on a notebook at home because even your computer is not safe.

@chasad75, hmm, I also use this method too, before investing on any coin I always check their whitepaper,and if it has no whitepaper or I found it is designed poorly, or there road map seems to weak, then I never do any investment on them.

you are doing right thing. It is our hard earned money we can't invest blindly. So best way is to do some research before investing in any cryptocurrency.

Assalam-o-Alaikum dear,

I hope that you will be doing well and enjoying the time and the cool circumstances around us.

You have presented a very beautiful post and I really liked the way you have presented your ideas about the crypto scams.

Yes, the phishing scams are not new in the field but they are now much more harmful for the investors of the crypto space.

Second is sending emails to attract recipients to enter their credentials on a website that will double their money within 1 minute or more. Once scammer gets the private keys, he will change it immediately and you loss your funds.

That's totally true, once the scammers has access to the private keys of the wallets, they have the complete access to the crypto tokens present in those wallets.

The best way to avoid the phishing scams is that we should ignore the scam messages that we get from the unknown identities through the social media platforms and mails.

Thanks a lot for your beautiful post and I wish a very good luck for you in this contest. Stay blessed bro.

Thank you for your kind words and appreciation brother. I wish you also best of luck for the contest :)

You're welcome brother 🙂