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Technical innovation is exciting and is changing the way people work, earn, save and shop. Bitcoin and other types of cryptocurrency provide the convenience of keeping transactions completely online. There is no need to carry bills or coins in a wallet and automated payment is easier. However, one drawback of this innovation is the large number of crypto scams that have evolved.
Crypto-Trace is the antidote to Crypto Scams. We counsel clients and create crypto intelligence reports that will facilitate legal proceedings and help authorities track down the fraudsters. Our team has decades of combined experience in the finance industry and is trained to detect patterns of fraudulent behavior. Crypto-Trace has a proven track record of success in creating detailed investigative reports for our clients.
Cryptocurrency began with the introduction of Bitcoin in 2009. Other types of currencies soon followed. Currently, there are 4,000 types of cryptocurrency. Cryptocurrency is a purely digital currency that is free from governmental regulations. Transactions are managed through the blockchain. This is a decentralized database that stores information in blocks that are chained together.
New information is added in the form of a block. Most of this new data include transactions on the ledger, and information is collected in chronological order. The blockchain can quickly identify hacking because disruptions will alter the pattern. Those who argue that cryptocurrency enhances security point to dynamics of the blockchain that prevent hacking. However, these measures can’t prevent people from using your cryptocurrency after having stolen them as long as they have the right codes.
Crypto Scams unfortunately are big “business.” In 2019, $4 billion was lost to cryptocurrency frauds. With so many people finding ways to swipe your bitcoin or get you to purchase a phony crypto wallet, it is important to stay vigilant and know what to look out for.
The problem with Crypto Scams is they can look exactly like legitimate offers. You could see a link featured on social media that is meant to provide information about an investment that promises to double your income. You may innocently download an app or a bitcoin wallet only to find that it has stolen all of your cryptocurrency. You have to look carefully before purchasing or downloading your crypto tools to avoid getting swindled. Here are some common types of Crypto Scams to watch out for.
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1. Social Media Imposter Bitcoin Scams
Companies and charities love to have celebrities speak on their behalf. However, not all celebrities are aware that their names are being used on something that is a crypto scam. One common type of fraud happens when scammers create false celebrity accounts promising to double the amount of any donation given in cryptocurrency.
Alternatively, they may promise to give the donors a bonus for every donation. What really happens is that the donor may get a fake confirmation, but no donation was made. Instead, it went into the fraudster’s pocket.
2. Crypto Scams with Fake Wallets and Platforms
Crypto apps and wallets keep your cryptocurrency safe, but unfortunately, many Crypto scams center around selling people fake products. Even Googe Play and Apple’s iStore have some fake apps and digital wallets on their lists. It is important to check which are real tools and which are frauds.
In many cases, scammers will take bitcoin right out of your wallet or app when you put some in. Some fake crypto dealers will invite you to trade or make transactions on their platform when their platform has no relationship to the blockchain but is nothing more than a screen. Verify the authenticity of any crypto tools you buy to avoid losing money to fraudsters.
3. Blackmail Bitcoin Scams
Extortion can be terrifying. Unfortunately, it doesn’t only happen in the movies. Bitcoin blackmail is becoming more prevalent because cryptocurrency is a way to make illegal transactions without identifying the parties. When it comes to shady dealings, cryptocurrency is the new cash.
Common blackmail Bitcoin scams occur when someone claims to have hacked your computer and gotten their hands on some compromising photographs or data. Even if the victim doesn’t really believe the people have disturbing photos or information, many people are afraid of photoshopping or faking info and may end up paying the blackmailer.
4. Phishing Crypto Scams
Some Crypto scam artists are after your digital coins. Others want your info. Many want both. Phishing involves deceitfully trying to get sensitive information from a person under some other pretext. These scams do the same thing, but they are in the context of cryptocurrencies.
The fraudster may be a fake cryptocurrency agent who says he or she needs personal information to set up an account. They may ask for your bank information, social security information, credit card details, and other data. Once the fraudsters have this information, they may take off and not communicate.
5. Ponzi or Pyramid Crypto Scams
Ponzi and pyramid schemes come in all varieties, but there are crypto scams that are also Ponzi schemes. A Ponzi scheme pretends to be an investment opportunity, but no investment is made. Instead, money just comes into and out of the fund like a revolving door.
When someone withdraws money, the Ponzi schemer used money coming in to pay for it. If too many withdrawals are required at once, the scheme could collapse, which is one reason why these fake fund managers try to discourage withdrawal.
If you have lost money in a Crypto Scam, Report the Crypto Scam to Crypto-Trace. We put together a full Crypto intelligence report that will make it easier for the authorities to track down the guilty party. We can help you put together a claim that can yield results and help you find your funds.
Reporting a crypto scam means having all of the communications available so Crypto Trace experts can get a full picture of how the fraudsters operate, what methods they use, what exactly they did and any hints they might have dropped regarding actual identities and their whereabouts.