Crypto Scams On The Rise. What To Look Out For and How To Protect Yourself.

(Disclaimer: The opinion expressed here is not investment advice – it is provided for informational purposes only. Every investment and all trading involves risk, so you should always do your own research prior to making decisions. We do not recommend investing money you cannot afford to lose.)

According to the blockchain firm, Chainalysis  over 7 Billion dollars worth of crypto was hijacked from wallets in 2021. This is an All-Time High that nobody wants to see except the criminals. That is an increase of over 81% from prior years. There are many types of scams to be aware of which we will try to go over.

One way and probably the most widespread are so-called rug pulls. These are projects that put out money to seem legitimate and hype their tokens or coin offerings. This is usually followed by massive media coverage like the Squid Games coin or by using social media to create a buzz. Once the coin is to where they want it they pull out or remove it completely from the blockchain leaving investors penniless. It is not all that difficult to create a coin and a buzz around it. What we tell everyone is to make sure to do their own research.

Another way people are losing their crypto coins is that they fall for giveaways on social media. You can usually spot these in comments across Twitter and Facebook with words like “I just received 14,000,000 coins from X Token” or join this telegram group followed by “you can thank me later” How this scam works is that they will create a fake telegram group around the token they are pushing. You will see many plants, or people that are paid to comment, say things like “Thanks it worked” or other words of praise. This hype usually gets people interested and they have FOMO. They will either use a recognized coin and tell you it is an airdrop or they will push a new coin offering “first-come-first-served” sale for pre-launch projects to get in now and promise to give you the world. You then would invest in a token that does not exist leaving you flat. And if it does exist most of the time it is going to be a rug pull.

There are plenty of new scams developing daily but we want you to also be aware of fake websites that lead you to malicious projects. Some of these sites are now using good looking NFT projects offering giveaways in which they will need your address. they will tell you to send crypto to the website instead of the main site so you could either save money on gas fees, earn more profits on your coins, or send to wallets that are later removed. Most of the time these types of sites will stay up for a while until they are able to strip enough people of their crypto. Once they reach their desired amount or if the heat is getting too bad they will take down the site and never be heard from again. Many of these sites will be registered overseas with anonymous hosting accounts and domain name registrars.

With crypto becoming more and more popular around the world we will see more scams in the future. Always be careful and look for things like copycat sites, misspellings on projects, and maybe most importantly, if your gut tells you that something is off it might just be. Trust your instincts.