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

Hello Steemians. I'm very excited to come back to the academy today and write about the topic that wants us to talk about crypto scams, it is something I have heard many times and I will like to write some good things on the topic. Follow me as I share my understanding about the topic with you today.

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Explain Your Understanding Of Crypto Scam

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I will like start by describing scam as a separate word or concept, scam means something that is not genuine or a fake project that is set up with the only aim of defrauding people but in some of these cases, the scammers don't make it look obvious and make it looks so real to attract their targets and take away their money or other asset investment.

Scams do exist in the crypto space and what it means is different fake schemes set up to steal assets away from users' wallets, gain access to a user's account to take over, impersonate another person, and so on. These scams can be dangerous in the crypto space and all that an individual has labored on for many years can be taken away in a blink of an eye.

_{Scam image taken from Pixabay}

The scammers these days target the Crypto space because of a lot of things like knowing that the space is not regulated and that allows them to take away these assets without leaving a trace even though we can check how the assets move on the block explorer but in most of the cases, we can't tell the real identity of the scammer because in the decentralized world when KYC is not always required, some identities remain hidden.

Furthermore, these scams are rampant in the Crypto space these days as they can be targeted at one person or mass attack on people hoping that some will fall into the trap while the scammers leave with their loot. I heard from people who have fall victim to scams in the Crypto space before and watch their assets leaving their wallets before their eyes and there is nothing they can do to stop it.

Why many victims can't stop Crypto scams when it is taking place is that most of them have given access to the scammer, they may have the private key as the main user or they might even change the keys to become a more credible owner and the victim can only look on as the assets leave. Sometimes it may even be fake investment calls to scam people and there are a lot of them that I will later talk about in this contest.

Some of the things we should put in mind about Crypto scams are:

• It's being set up to steal away users' assets or gain access to their accounts and proceed with the use of the account for other bad practices.

• They can be in form of investments but are not real.

• It is hard to stop the process of Crypto scams because once they gained access, that's almost over for the owner.

• They can not be traced to the original name of the scammer, they can only be linked to some wallets and if the scammer is very smart, there won't be a trace to his or her original account in the Crypto space.

So, we have to be aware of these scams when we are interacting with Cryptocurrencies, it's delicate to allow scammers to get into control, the owners control may be lost forever.

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Explain The Various Types of crypto Scam

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I said before that we have a lot of Crypto scams and this is the part of the contest where I will be talking about these types. There are many of these scams and all of them have the same aim which is to steal away from people if care is not taken, that may be the end of many people because all they have labored for, for years would be lost.

The Crypto scams I will be talking about are Investment scams, Phishing attacks, Giveaway scams, Rug pull scams, and Ponzi schemes, we do have many more of these scams in the Crypto space.

Investment Scams: Fake investment is one of the popular Crypto scams when scammers contact people with investments that are not true and in the process, they will promise that the investment has a high yield and give so many reasons why their victim should take advantage.

They are so organized that sometimes they will lead the victim to another account that can be tagged as the CEO of the investment company, this account can be handled by the same scammer or by their network. The aim is to make it look like a good investment then they require the victim to make some payments, after payment the victim would be blocked on all channels they have used to contact her and that's money lost.

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Rug Pull Scams: The Crypto space is not regulated and that gives a lot of people the opportunity to create tokens with different objectives, some create good projects to solve a problem while some are based on a scam. New tokens can be created on some blockchains easily at any time and scammers use this opportunity to launch their plans.

In the case of a rug pull scam, the project team will create a token, launch it, and attracts investors to buy the product. After some time when the asset have been bought by a lot of people, the team would abandon the project and remove liquidity which makes the token useless. An example of a project like that was Squid token which made it to over $3000 per token but fell so much that it is only worth $0.00696 now.

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Phishing Attack: This is another form of crypto scam where the attack is launched through a method known as Phishing, this is carried out by scammers sending links out to users, links that looks like that of a real company a user invested with or mirroring emails sent out by popular companies but with fake links.

_{Phishing attack image taken from PxHere}

The aim is to entice victims to click the link and maybe download some files that have mining scripts running in the background that track the activity of a user and even get access to their private keys which makes the scammer the owner of the account along the line, taking away Crypto assets of the victims.

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Ponzi Schemes: Ponzi schemes are another popular type of scam in the Crypto space and these ones pretend to be an investment with high returns on investment, sometimes they can say they mine new tokens with the investment of the users while they share the profits with them.

But in reality, there is no investment, the capital put in by new users is used to pay old users and this means they only run a scheme that is based on the inflow of cash from new users. It's dependent on new users and if there are no more new users or the team have achieved their target of money to steal away, then the project dies and people's money would be trapped forever. They use stable coins for most of these in the Crypto space.

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Giveaway Scams: This is a very common Crypto scam and one way the scammers do this is by spreading messages or ads that promises people free crypto like 1 BTC or 0.1 BTC, 500 STEEM, and many others, the aim is to attract users to click while they gain access to the victim's wallet or an account on the other end and take possession of the account.

This type of scam is very popular on our Steemit platform and I have read stories about many people who lost their wallets and all they have worked for into the hands of this type of Crypto scam, people should be careful of clicking strange links.

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These are some of the Crypto scams I chose to talk about today and as I said at the beginning of this part, there are so many more of them and users should watch out so that they don't end up being victims of these dangerous scams.

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How Can We Spot This Types Of Crypto Scams?

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They say prevention is better than cure and in the Crypto space too, avoiding scams is better than finding a solution to an attack in progress, the solution that may likely not come until they take away all the assets. So, it's good to spot Crypto scams early and avoid them.

I will use the types I have discussed before in the previous part to talk about how to spot crypto scams.

To spot investment scams, if you are contacted by a random user on your social media handles to invest in a project that doesn't have a website or if they do, no verified team member on the website or the form of investing is sending crypto to a wallet. This is a scam and don't ever think of investing in it.

To spot a Phishing attack, if you get links from random users that are not within your circle and the message on the link looks nothing like anything you have engaged before, has an enticing message like earn $20 for sign up, a cloning of a popular website with little omissions in the name, for example, coinmarktcp.com and many other messages like that, it's likely to be a Phishing attack.

To spot giveaway scams, if you got messages on your social media handles that tells you to get free 1 BTC and so many other rewards like that without doing anything, by clicking the link, it's a scam to steal away from people.

To spot rug pull projects, you may not easily know about a project like this from the beginning but if you are invited to buy an asset with no special use case or utility, no verified team member, no tracked listing on websites like Coinmarketcap or Coingecko and many others like that. That may likely be a rug pulled project along the line.

To spot Ponzi schemes, it's good to make investments but one that has verifiable real investment evidence is better. If an investment is promising you maybe 25% on your referral deposit then that's more like a Ponzi scheme.

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Have You Ever Been Scammed Before? Or Has A Person You Know Been Scammed? Explain To Us The Incident

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Yes, I have been scammed before and it happened through a type of an investment scam and the incident occurred last year. There are a lot of projects that claimed to be mining platforms, they are fake projects which many people know about and only decided to make quick money from while some people don't know anything about them rather than they want to invest and make money.

A friend of mine shared the platform with me that you rent mining machines to mine some tokens and you get about 6% of your capital back every day which means in just 16 to 18 days I should be able to get my full capital of $100 and continue taking profits. This platform even has levels of subscription, and higher levels mean you get more profits.

I thought of getting my capital back in 16 days and using the profits that would be made after that to upgrade my subscription so that I can earn more. Barely 6 days after I started, the platform stopped paying and that's how I lost about $60 of my money to Crypto investment scam.

Another experience about scams that I heard about in the Crypto space was the one shared on our United Africa group on WhatsApp where madam @patjewell shared about a user on Steemit whom the original person who created his account started powering down the account and took away the users' assets. This is also a crypto scam because the user has trusted an account created by his friend and continued using it.

He was scammed along the line, and even though what the scammer did was bad, the user shouldn't have trusted anyone with his keys, he could have easily created his own account from the beginning to have the keys to himself.

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How Can One Protect Himself From Crypto Scams

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There are so many ways we can protect ourselves from scams in the Crypto space and each of those ways depend on the types of scams we are trying to avoid but I will write on general ways to avoid scams in the Crypto space.

Conduct Research: Before considering investing in a crypto project, conduct research and ensure the project has:

• Specific use case.
• Verifiable project team.
• Good whitepaper and roadmap.
• Tracked listing on some crypto tools.

This will help one to reduce the risk of falling a victim to an investment scam in the crypto space.

Protect your Keys: It is also advisable that people have their keys protected, not sharing them with another person and kept offline, in a paper where only you can have access to it. If there are cases of hacking of devices or stolen phones, you would be sure that your keys are not live on your accounts on your mobile phone or laptop.

Don't Click Untrusted Links: Phishing attack is promoted through links and clicking on them can get your account in danger, not even one, your accounts may be affected. You will not only lose your assets but people's account in most cases are still used to promote the scam to their friends. So, don't click on links from outsiders and if it's from your friend, check on her maybe through a phone call or video call to be sure and make your own research before visiting the link.

Activate 2FA Security: 2FA which stands for two-factor authentication is another important way to escape scams in the crypto space. It is used on so many Crypto exchanges to authenticate withdrawals or some account edits, it can be email, phone number, or even authenticator Apps. If your email and passwords have been compromised, the authenticator App can help to hinder money movement from your wallet because it would be required before proceeding.

Don't get Greedy: There is no free money so one shouldn't get greedy. Greediness can make one click on a giveaway Crypto attack and lose the entire wallet to the event, so don't click on any link saying you will get an unbelievable amount of tokens for clicking, it can be so dangerous.

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Conclusion

Crypto scams have become very popular these days and because the space is not regulated yet, it's easy for these scammers to get away with it without having to pay for the atrocities committed. There are a lot of Crypto scams and I have fell a victim to an investment scam before, this mistake I will never make again, it should serve as a lesson for others reading my post today. I'm very happy to join this contest at the crypto academy. Thanks for reading.

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I invite @patjewell, @badmus-official and @jasminemary to participate in this contest.