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5 Crypto Scams To Watch Out For

Swindlers exploit various schemes to lure victims into fraudulent crypto investments. They even go as far as entering into fake relationships through dating apps like Tinder.To get more news about crypto exchange scams, you can visit wikifx.com official website.

Headlines like “Crypto and Romance Scams Continue to Cost Victims Billions” and “A Romance Scammer Took Her Life Savings in Crypto” are becoming commonplace.

In fact, crypto romance scammers conned victims out of $139 million last year, according to a 2022 report by the Federal Trade Commission (FTC). But that’s just one type of scam of many.

The FTC also found that more than 46,000 consumers reported losing more than $1 billion in crypto between Jan. 1, 2021 and March 31, 2022. And that might be just the tip of the iceberg—there are likely more victims out there who didn’t report their incidents.

Aaron Cohn, partner at Weinberg Wheeler Hudgins Gunn & Dial, a law firm focused on financial fraud, says his practice has seen a strong increase in victims seeking help with hacked crypto accounts.

“Retail investors considering crypto investments need to understand the elevated risks and should employ heightened safeguards to help ensure they do not become the next victim,” Cohn says.
What Are Crypto Scams?
Crypto scams are like any other financial scam, except the scammers are after your crypto assets rather than your cash.

Crypto scammers use many of the same tactics employed in other financial crimes, such as pump-and-dump scams that lure investors to purchase an asset with fake claims about its value or outright attempts to steal digital assets.

This latter type of scam could involve breaking into a person’s crypto wallet or getting an investor to send a digital asset as a form of payment for a fraudulent transaction, says Shane Cummings, wealth advisor and director of technology and cybersecurity for Halbert Hargrove.

The goal is always to manipulate victims into divulging personal data or transferring valuable digital assets like non-fungible tokens (NFTs) to the perpetrator’s account.

“As an instrument, crypto scams are particularly appealing to nefarious agents who enjoy cryptocurrency’s swift conversion to fiat money, ready-to-use third-party transaction applications and rich obfuscation techniques,” says Chengqi “John” Guo, professor of computing information systems and business analytics at James Madison University.
Investment scams involve a bad actor enticing people to send their cryptocurrency to the fraudster with promises of “huge gains.”

Scammers can play many parts, such as an “investment manager,” a celebrity or even a love interest on an online dating site. Whatever role is assumed, they promise to grow your investment if you transfer your cryptocurrency to them.

Investment scams include pump-and-dump schemes. A fraudster entices you to buy an obscure crypto at a “low price,” with promises that the asset’s value will soon go through the roof.When you buy, the price rises, at which point the scammer dumps their holdings at the new higher valuation, which causes the price to collapse, leaving you and any other victims underwater.

“Given the speed at which new coins are created and marketed to investors on the internet without regulation, some investors looking to earn a quick profit are drawn in by reports of triple-digit percentage gains in a digital asset over a short period of time and want to jump on the bandwagon,” he says.

These schemes often begin on social media or online dating sites, so be wary of anyone contacting you out of the blue about your crypto assets. Watch out for anyone talking up a particular crypto asset on Reddit or other social media platforms, too. These are known as socially-engineered scams.