Tips to protect crypto against scams

Interest in cryptocurrencies such as Bitcoin is increasing every day. This means that interest in cybercriminals in this area is also increasing. We previously wrote about a study by the internet security software company ESET, which gave tips for using cryptocurrencies safely online. Now this company comes with tips and insights to protect yourself so you don’t fall victim to fraud or scam.

Between October 2020 and May 2021, Americans (according to the FTC) lost about $71 million ($80 million) in crypto scams. In the UK, the numbers are even higher: according to police, victims lost more than €172 million (£146 million) in the first nine months of 2021.

Reasons increase scams
Here are the main reasons cryptocurrencies scams are on the rise:
– compared to the traditional stock market, there is little or no regulation for the cryptocurrency market for investors;
– media interest makes this an excellent bait for phishing and scams;
– the rising prices of crypto coins attract people who dream of getting rich quick;
– the social media help to amplify the buzz, real or fictitious;
– the temptation of mining coins for cash by criminals can be used as a bait.

Best known scams
Many companies (and individuals) are active on a cryptocurrency exchange (exchange). However, cyber criminals have already regularly managed to divert money from these companies by hacking into the system. This sometimes involves hundreds of millions of euros. The problem is also that there is no type of insurance for victims of crypto fraud (yet). However, companies do promise to compensate innocent victims. In general, you run the risk of losing a lot of money if you are a victim of these scams. That is why it is useful to know how you can be scammed, so that you recognize them. Here they are:
Ponzi Pyramid: An investment scam where victims are tricked into investing in a non-existent company or a get-rich-quick scheme that only fills the scammers’ pockets. Cryptocurrencies are ideal for this, as thieves invent new cutting edge technologies to attract more investors and make bigger virtual profits. Falsifying data is easy because the currency is virtual.
Pump and Dump: Based on false information, scammers encourage investors to buy shares in unknown crypto currency companies. Then the stock price rises and the cyber criminals sell their own shares, make a nice profit and leave the victims with useless shares.
Fake celebrity endorsement: On social media, scammers are hijacking celebrity accounts or creating fake accounts and encouraging their followers to invest in fake plans like the one above. In a fraud about 2 million dollars (almost 1.75 million euros) was lost to scammers who even Elon Musk in a Bitcoin address to make the scam more trustworthy.
Fake Cryptocurrency Exchange Services: Scammers send emails or post messages on social media promising access to virtual money stored with cryptocurrencies exchange services. The only problem is that users have to pay a small fee first. The exchange service does not exist and their money is gone.
Scam apps: Cyber ​​criminals counterfeit legitimate cryptocurrency apps and load them into app stores. If you install one, it can steal your personal and financial information or plant malware on your device. Others may encourage users to pay for services that do not exist or to steal data from cryptocurrency wallets.
False press releases: Sometimes the scammers even manage to mislead journalists, who then publish false information. This has happened twice when legitimate news sites posted articles about major retailers preparing to accept certain cryptocurrencies. The fake press releases on which these stories were based were part of pump-and-dump schemes designed to give more value to the actions of fraudsters in the said currencies.
Phishing / Identity Theft: Phishing is one of the best known ways of scammers. This is a topic we’ve written a lot about. An example of phishing are text messages from the tax authorities. Emails, text messages, and social media posts are faked as if they came from a legitimate and trustworthy source. Sometimes those sources, such as a credit card provider, bank or government official, request payment in cryptocurrencies. Thus they try to make us act without giving us time to think.

Tips to avoid becoming a victim
ESET states that one of the best tips is to be suspicious. Don’t believe everything you read online. There is a lot of fake news and scams. Furthermore, ESET comes with the following tips:
– never give your personal information to a ‘company’ that may contact you unsolicited, via email, text message, social networks, etc., even if it appears to be a friend. In reality, it could be a hacker who hacked into the friend’s email or social account. Contact the friend, using a different means of contact;
– if something is too good to be true, it usually is. Approach all investment programs with distrust and caution;
– enable two-factor authentication for all cryptocurrency accounts you own;
– decline any ‘investment opportunity’ for which an advance payment is requested;
– never use unofficial app stores;
– Download anti-malware software from a reputable vendor on your PC and mobile devices.