Mark Tencaten | Cryptocurrency Scams you should be Aware of
With hundreds of cryptocurrencies debuting each month, the increased desire of investors in the blockchain world to place money in an extremely speculative market has rendered them more vulnerable to different cryptocurrency-related crimes. Losses from these scams totaled US$1.7 billion in 2018, with criminals defrauding unsuspecting investors using traditional and cutting-edge techniques.
Blockchain technology and cryptocurrencies are fields that are changing quickly; therefore, Mark Tencaten suggests it’s critical to stay on top of new terms and effective safeguards for your money (cryptocurrencies).
The many cryptocurrency-related frauds are explained by Mark Tencaten here, along with tips on how to prevent them.
1. Fake Initial Coin Offerings
An ICO is a kind of cryptocurrency fundraising. It is the amount of cryptocurrency offered to investors or speculators in return for fiat cash or other cryptocurrencies like Bitcoin or Ethereum. If the project’s financial objective is reached and the ICO’s funding target is reached, the tokens sold are marketed as potential future usable units of money.
Fake initial coin offerings (ICOs) promise investors significant returns in very little time. To entice their investors, these con artists offer false white papers. Most ICO scams have been committed by convincing investors to invest, employing fake ICO websites and problematic wallets, or disguising themselves as legitimate cryptocurrency-based businesses.
2. Bogus crypto exchanges
One of the simplest methods to take advantage of inexperienced investors and traders is to pretend to be an affiliated branch of a trustworthy and lawful organization. By presenting prices that are incredibly competitive on the market, these fraudulent exchanges may deceive people into utilizing their services.
3. Counterfeit wallets
Choosing a wallet to hold and manage your digital currency is completely acceptable. The user-friendly layout of these wallets makes it simple for beginners to transfer cryptocurrency. But several fake wallets have been removed from the Google Play Store. Trezor was the most recent cryptocurrency wallet program to be copied. When a wallet is replicated, all its currency disappears, leaving your portfolio empty.
4. Pyramid scheme or Ponzi scheme
An investor is tricked into putting money in your concept, in this example, cryptocurrency, with the promise of extremely high returns. The only way an investor might receive his money back after the cryptocurrency transfers would be by convincing other investors to fund his business venture. This concept continues ascending to the top, where the scam artist who created it comes out on top.
OneCoin, which was made in 2015, is an example. OneCoins could be purchased by interested people by exchanging cash for this virtual currency, according to its inventors. A portion of this cash was used to cover the sums the other victims were anticipating receiving when they also purchased the investment. No other platform accepts this coin for payment. Over $50 million in illegal sales were plundered by this firm in one year.
5. Phishing
We all understand how phishing operates. Even in the blockchain sector, most individuals cannot defend themselves against numerous phishing frauds. In order to deceive us into disclosing our login, password, or payment details, scammers employ psychological manipulation. Simply put, scammers email links to their fraudulent websites. These pages are closely like any legitimate cryptocurrency trading website. Consumers are often instructed to send a specific amount of Bitcoins or Ether to a fake MyEtherWallet.
In 2019, two Israeli brothers were detained for allegedly running a three-year phishing scheme. During this period, they were accused of stealing over $100 million in cryptocurrencies by enticing buyers from popular cryptocurrency trading platforms like Reddit onto websites that looked just like well-known crypto exchanges.
6. Airdrop scam
The idea behind an airdrop is to give out free crypto tokens in limited quantities to certain wallets. Before the tokens are released, airdrops are a marketing strategy blockchain firms and projects employ to generate buzz. Users may sign up for airdrops through Google Forms or by directly enrolling through links on the project website. The cost of advertising for the developers is reduced because many users learn about airdrops through other means and earn referral tokens for drawing in new participants.
The most typical kinds of airdrop fraud include:
Dump Airdrop: A token’s developers want to create a buzz about it right away so that when it launches on exchanges, people will be eager to purchase it. Once it happens, the creators swiftly sell (dump) every token they have for a tidy profit. The investors’ tokens are now useless because the project was abandoned.
Private Key Scams: Private Key scams are completely fake and simple to spot. Instead of asking for the public keys to our wallets, these frauds request the private key via forms or links. The private wallet keys are never requested in genuine airdrops.
Mark Tencaten’s Advice On How To Avoid Such Scams
· Check to see if the exchange platforms you use abide by the laws of the nation where they are located. Please be sure that the wallets and platforms you use are reliable and built using blockchain technology. Reading the white paper of the blockchain venture or firm is crucial for spotting fraudulent initial coin offerings. Cloned versions of legitimate websites are created quickly by scammers. These websites are more likely to be scammed if there are any textual inconsistencies, blank website pages, or concealed team members.
· Never invest in any endeavor without first conducting your own research. Any cryptocurrency’s price increase, especially an altcoin, does not always mean it will become the next Bitcoin. Keep your confidential information, particularly the private wallet key, close at hand at all times. Such information is not required for real projects.
According to Mark Tencaten, it is a fast-expanding area with daily advances. As more people work in this industry, more people are likewise prone to commit fraud. Only by keeping up with the most recent news regarding cryptocurrencies and Blockchain Technology can you avoid being duped or conned.
