Common Crypto Scams and How to Avoid Them

April 19, 2024
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4 min read

This is a Crypto Brand Press post. Brand Press is a paid service for brands that want to reach Techpoint Africa’s audience directly. Techpoint Africa’s editorial team doesn’t write Brand Press content. To promote your brand via Brand Press, please email business@techpoint.africa

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We're going to run through some of the most common crypto scams making the rounds to watch out for. I'll break down exactly how these traps work, plus offer up some pro tips on dealing with them so you don't end up with the next tragic story of life savings getting drained.

After all, avoiding sketchy situations and keeping your digital assets safe by using trustable platforms like Immediate Evista is crucial for surviving in this world. Let's run through the biggest scam threats first.

The "Crypto Giveaway" Scams

This one is about as old as Bitcoin itself - bad actors setting up fake online promotions promising to "give away" free crypto if folks send payments to a specific wallet address first. The typical ploy involves impersonating a celebrity, industry titan, or respected crypto project on social platforms like Twitter, YouTube, or Telegram.

The scammer crafts an alluring giveaway message saying folks who send small amounts of Bitcoin, Ethereum, etc. to their wallet will receive bigger payouts and rewards in return. In reality, it's just an age-old money-grabbing scheme targeting the naive with hollow "send me money first" promises that never deliver.

How To Avoid

NEVER, under any circumstances, send payments or crypto to internet strangers promising free giveaways, multipliers, or bonuses.

Legit projects and high-profile individuals do NOT run giveaway campaigns requiring you to send money first. If you receive a DM or see posts promising crypto riches for a small upfront payment, it's a scam - report and ignore it.

Rug Pulls and Crypto Exit Scams

A "rug pull" refers to a particularly vile type of crypto scam where developers abandon a project and run away with investors' funds. It typically goes down with founders hyping up a new DeFi protocol, coin offering, or other crypto project to attract investment and liquidity.

Once there's been a significant infusion of funds into the project's coffers and liquidity pools, the developers pull the rug completely out from under the community. They drain investment funds from the project's wallet and centralized resources into their own pockets, then deactivate websites and communication channels to wipe out the project.

How To Avoid

Rug pulls are so common in DeFi and crypto, that it cannot be stressed enough how crucial it is to only participate in legitimate, publicly audited projects with known teams and evidence of active development. Folks looking to chase insane APRs and rewards on brand-new, hyped-up DeFi protocols are prime rug pull targets. Thoroughly research any new crypto project and its founders before investing.

Phishing and Fishing Attacks

These are Crypto's versions of those age-old cyberattack classics - phishing and fishing attacks. Phishing typically involves scammers mocking up smart-looking emails and websites impersonating brands and crypto platforms. They try tricking victims into handing over sensitive login credentials, downloading malicious code, or sending payments under pretenses.

Fishing scams tend to involve more human interaction and social manipulation on behalf of bad actors posing as customer support reps, love interests, or fake "crypto gurus" offering assistance. Once trust is built, the scammer tries phishing the victim's credentials and emptying their wallet.

How to avoid

Always be wary of unsolicited links, attachments, and direct messages related to crypto and money, even if they appear legitimate. Refer to official platform website URLs, NEVER click suspicious links, and never hand out seed phrases or personal data. Quality crypto platforms like Immediate Evista have robust security practices - they won't ask for private keys out of the blue.

HYIPs and Ponzi Schemes

Just about every new emerging asset or investing industry deals with the resurgence of those old-school "Get Rich Quick" High-Yield Investment Programs (HYIPs) that inevitably turn out to be nothing more than Ponzi schemes.

In the crypto world, these scams spread like wildfire as wave after wave of bad actors launches dodgy protocols, staking platforms, and cloud mining services and yield farm opportunities promising laughably unrealistic, too-good-be-true returns on crypto investments. Think passive income streams paying triple-digit APYs for just depositing tokens.

At first, some might appear legit, paying out consistent returns to recruit new streams of funds from new investors and maintain the facade. But soon enough, the debts will always overwhelm what is pumped in, and the whole Ponzi collapses leaving everyone empty-handed.

How to avoid

Be extremely skeptical of any DeFi or crypto platform advertising ridiculously high, guaranteed returns and profitability. Promises of 100%+ gains regularly should immediately raise red flags that you're dealing with a mathematical impossibility too risky to participate in. If it seems too good to be true, it always is.

In Conclusion

As a general rule of thumb to stay safe, you're better off placing trust in quality custodial and non-custodial wallets/trading platforms like Coinbase, Immediate Evista, Kraken, and Ledger hardware wallets than any individuals or websites promising shortcuts to riches.

The more you can directly custody your assets through secure wallets you control, and transact only through official interfaces and exchanges, the less exposure you'll have to scammers broaching your security.

This article is a Brand Press post. Brand Press is a paid service for brands that want to reach Techpoint Africa’s audience directly. Techpoint Africa’s editorial team doesn’t write Brand Press content. To promote your brand via Brand Press, please email business@techpoint.africa

This Brand Press article was not written by Techpoint Africa’s editorial team. To promote your brand via Brand Press, please email business@techpoint.africa.
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This Brand Press article was not written by Techpoint Africa’s editorial team. To promote your brand via Brand Press, please email business@techpoint.africa.

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