Fraudulent activities and schemes on digital assets have been around the Internet since cryptocurrencies were created. Robbing individuals and institutions of millions of dollars, most of these schemes continue to victimize traders and investors up to this day. They may have changed how they operate after being caught by the authorities, but these schemes don’t die—they multiply.
The crypto world has had plenty of bad experiences with these defrauders. Fortunately, there is now more information available about these fraudulent schemes so you can better prepare yourself against crypto hackers. Find out here at BTC Post about the common cryptocurrency schemes lurking all over the net so you know which red flags to look out for.
Cryptocurrency schemes you should learn
When delving into a novel investment for the first time, it’s important to always be aware of widespread scams and fraudulent schemes surrounding the industry. This protects you from not just being robbed but also ensures you know everything about what you’re getting yourself into.
Though cryptocurrency uses cryptography to maintain the system’s security, there are still leeways that scammers exploit to victimize people. Discover here the different ways defrauders fool people into giving up their assets without their knowledge and consent.
Hardware wallet theft
There are two ways to store your cryptocurrency, namely through software or hot wallets and hardware or cold wallets. The former store your coins online and allow you to make instantaneous transactions while the latter keeps your crypto safe inside a small hardware device like a flash drive.
Software wallets are known to be more vulnerable to cyber-attacks compared to hardware wallets because they are connected to the internet. This instantaneous connection allows you to make transactions in just a matter of seconds, but in exchange for the fluidity, hackers can tamper with the data.
You’d think hardware wallets are immune from tampering since they are not connected to the internet but hackers have still found a way to slither past these defences. There have been reports of cold wallets that have built-in vulnerabilities.
Scammers pose as hardware wallet sellers and provide customers with pre-configured algorithms that allow the sellers to get their funds once the wallet is activated. To avoid this problem, you just have to make sure that your wallet provider is trusted by credible sources. Do your research and only make informed decisions to ensure your security and privacy.
Exchange site hacks
There have been multiple instances before where crypto exchange sites were robbed by cyber hackers, taking millions of dollars away from the site and their customers. The Mt. Gox hack in 2014 is one of the most popular phenomena in the crypto world which shook the Japan-based exchange site to the point where it had to file for bankruptcy.
Around US$640 million worth of digital assets were stolen from the online reserves of the world’s once largest Bitcoin exchange site. This startled the whole crypto community, prompting exchange sites, marketplaces and broker sites to strengthen their security and improve their defence against fraudulent attacks.
These hacks are more wide-scale and target exchange sites instead of individuals. Though you’re not directly targeted, the sites or their accompanying software wallets can be targeted.
You can do a lot to protect yourself from these kinds of hacks. Firstly, remember to store your purchased cryptocurrency to a private wallet after conducting a transaction. Compared to online wallets, exchange sites are extra vulnerable since lots of transactions pass through its system daily.
Sites with weak security systems are most prone to cyber-attacks so you should make sure that the site you’re using is equipped with state-of-the-art security systems. Aside from that, it will also help if the site has an insurance policy that protects its clients’ assets in case of an attack.
Recently, videos of influential celebrities and personalities have spread on Youtube where they are supposedly giving away Bitcoin by doubling your donation. These videos used clips of big tech names such as SpaceX’s Elon Musk, Ethereum’s Vitalik Buterin and RippleLabs’ Brad Garlinghouse attached to edited illustrations stating that these personalities are giving away up to 10,000 BTC. All you need to do is send BTC of any amount to the included address and you will receive twice the amount of the money you sent.
Played as ads before, during and after watching Youtube videos, these giveaway scam videos reached millions of viewers around the world. But not only was this kind of online fraudulent scheme used on Youtube, but it was also spread throughout Twitter.
On the social media app, scammers impersonate famous personalities including the former US president Barack Obama, current US president-elect Joe Biden, Microsoft founder Bill Gates and influential rapper Kanye West. Fake accounts were created and used to tweet about the supposed giveaway.
Even Binance, one of the biggest exchange sites in the US wasn’t spared from the impersonation. Because of the wide reach of these online platforms, this scam fooled over thousands of users and took millions of dollars from them.
Unfortunately, due to the secure nature of cryptocurrencies, they cannot be taken back. But protecting yourself from these scams is as easy as being extra sceptical about giveaways especially if it requires you to send money first. Remember that when it comes to big giveaways, if it’s too good to be true then it most probably is.
Fight against cryptocurrency schemes
Hackers and fraudulent attacks won’t go away. Even if they are reported to the authorities, they will just take on a new form and continue stealing away from their wide-eyed victims. You can always protect yourself from these attacks by being extra careful, doing your due diligence and researching everything you can about a certain matter.
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