What You Need to Know About Crypto Scams

We’ve all heard of crypto scams. In fact, these digital currency frauds are one reason many people are so skeptical about virtual money. Although we often run across the question “Is crypto a scam?” there is no need to assume that all cryptocurrency is fraudulent. 

Nevertheless, it can’t be denied that the number of crypto currency scams is increasing rapidly. Losses associated with crypto crime have increased by 79% since 2020. The FBI has confirmed that crypto currency scams are the fastest-growing type of cybercrime. 

In 2021, $680 million was lost in bitcoin scams and in the first few months of 2022, over half of that amount was stolen from customers. The end of 2022 should reveal skyrocketing rates of crypto crime.

Should You Use Cryptocurrency?

Is the answer to avoid using cryptocurrency? No. Anyone who was alive in the 1990s remembers the proliferation of internet scams in the early days of the web. Imagine if people decided that they would ditch the web because of the high rates of internet crime. 

The internet is a part of our daily life, in spite of the risks. The same applies to cryptocurrency. The convenience of digital currencies likely indicates that it’s here to stay. Blockchain technology has transcended the financial sector and can be used in many industries, even for preserving rights to artwork through NFTs. 

So if bitcoin and the blockchain are here to stay, how can we use cryptocurrency safely and avoid falling victim to crypto scams? The key is following cryptocurrency safety tips and knowing what to do if you suspect a bitcoin fraud. Also, finding experts who will help you on the road to crypto recovery is vital to a successful claim.

Types of Crypto Scams

How are crypto scams like ice cream? Well, we certainly don’t scream for them and they don’t make us feel very good, but they are available in many flavors. Here are some of the most common types of crypto scams.

Crypto Mining Scam

Crypto mining is the process of making new cryptocurrency. Cryptocurrency is produced through computers that perform complex operations. 

Of course, it takes a tech whiz to understand these complex problems. Bitcoin mining gives everyday people the chance to participate in this process even if they don’t have advanced technical knowledge. 

This is how crypto mining scams flourish. They take advantage of people who don’t know very much about how bitcoin is mined and promise them they will make a fortune. Although there are many legitimate forms of cryptocurrency mining, unfortunately, crypto mining scams abound. 

Crypto Romance Scam

Many people look for love online – and end up with more (or less) than they bargained for. Most of us are familiar with catfishing frauds where people pretend to be someone else. 

They may flirt, charm and cajole, but it isn’t long before the conversation turns financial. A few signs of a crypto romance scam include the refusal to do actual video chat and always–there is a request for money. 

WhatsApp Crypto Scams

WhatsApp is a convenient way to communicate with friends, co-workers and groups of people. However, most of us have seen WhatsApp spam advertising get-rich-quick deals. It’s important to understand that any legitimate financial service won’t spam you on WhatsApp. 

Another common form of WhatsApp crypto scam are those that start on other platforms, such as social media, and they urge people to allow the conversation to continue on WhatsApp.  Since there is very little fraud patrolling on WhatsApp, these fraudsters think they can get away with it. 

Instagram Crypto Scams

Instagram, Twitter,  Facebook, and TikTok have become hotbeds of crypto fraud. Instagram crypto scams are among the most common. It’s important to understand that no legitimate crypto broker will use social media as their sole platform to get new customers. It’s best to be skeptical of any digital currency deal advertised on social media. 

NFT Crypto Scams

The idea behind NFTs – or non-fungible tokens – was to reduce fraud and to prove authenticity. These digital files can protect rights to artwork, documents and trademarks. 

However, the NFT market has been flooded with ill-intentioned users and there are plenty of counterfeit NFTs as well as NFT crypto scams. Some of these include rug pull frauds, in which people look for investors in an NFT, take their money, and disappear. NFT phishing is also common – scammers will try to get your account details and then hack NFTs. 

USDT Crypto Scams

USDT or Tether is a type of stablecoin, which means it’s cryptocurrency linked to fiat currency or another stable asset. One common type of USDT crypto scam is phishing. People receive messages claiming they won thousands of dollars worth of USDT and are given a link to claim the prize. Instead, the link gives the fraudster all of their personal information.

Scammed smartphone

Staying Safe from Crypto Scams

Although many dangers lurk on the blockchain, the following are some steps you can take to stay safe: 

Stop fraud

Use Strong Passwords and Two Factor Identification

Don’t use your birthday, address or kids’ names as passwords. Be creative and find something that isn’t easy to guess. Also, insist on two-factor identification. It may take extra time, but it’ll keep your money safe from crypto scams. 

Keep Most of Your Crypto in “Cold” Wallets

This sounds counterintuitive when it comes to technology, but it’s best to be low-tech for maximum security, at least sometimes. Keep most of your cryptocurrency in “cold” or offline wallets to avoid hackers. 

Verify all Merchants and Broker Information

Don’t just spend your cryptocurrency anywhere. Verify all merchants and brokers. Make sure their names, addresses, licensing and all information checks out. If they don’t provide all of this information, avoid them. 

Avoid Giving Out Sensitive Information

Although hacking is a huge problem, most crypto scams work not with stolen information, but with data the victim actually hands over. This means protecting your bitcoin wallet data and not sharing your codes or keys with anyone. 

Steps for Successful Crypto Recovery

Although no one can guarantee crypto recovery, you can greatly increase your chances of getting your stolen funds back if you work with the right team. 

Sadly, the majority of crypto scam cases go unreported. This may be because people assume that they can’t track down their funds on the blockchain and that fund recovery isn’t possible.

Fortunately, this isn’t true. The MyChargeBack team helps our clients take the first step toward crypto recovery and gives the authorities the tools they need to track down crypto scams. The MyChargeBack team investigates cases thoroughly and with crypto forensics and cutting-edge technology, creates crypto investigation reports that make crypto recovery more likely.

MyChargeBack Will Help You Fight the Battle Against  Crypto Scams

If you have lost money to financial fraud, talk to the MyChargeBack team. Our crypto investigations will provide evidence to bolster your claim and get you started with fund recovery. 

MyChargeBack has developed working relationships with law enforcement agencies worldwide, has extensive knowledge and experience with crypto tracking, and can improve your prospects of getting your funds back