Common Cryptocurrency Scams 2020
It is the purpose of this article to educate you on the most common cryptocurrency scams 2020. Many of these scams are not new to you if you have been on the internet for any time at all.
However, it is good to review the cryptocurrency scams 2020 just to make sure you don't get burned. There are literally 1000's of bad actors waiting to capitalize on your ignorance or lack of protection.
The good news is that armed with a little knowledge and some decent security protocols, you can easily safeguard yourself against cryptocurrency scams 2020!
Too-Good-To-Be-True Exchange Rates
Many scammers capitalize on volatile cryptocurrency markets. They prey on unsuspecting beginners, who can’t spot the difference between a legitimate exchange and a fake one.
These fake Bitcoin and cryptocurrency exchanges put up polished and realistic web sites, and promise lower-than-market-rate prices and guaranteed returns.
“Fake Bitcoin and cryptocurrency exchanges put up polished and realistic web sites, and promise lower-than-market-rate prices and guaranteed returns.”
If you discovered an "exchange" offering significantly lower prices than the going rates on Coinbase or Kraken, would you be intrigued? The truth is, an exponential difference in price between exchanges is often a sign of a scam!
Instant PayPal Deposit For Purchase
Many bad actors will offer to buy your coins at higher-than-market-rates and make a deposit directly into your PayPal account. People who are desperate for fast cash or really need their funds quickly often fall prey to this scam.
They'll ask you to send your Bitcoin to their wallet address, and provide your Pay Pal address so they can make "prompt payment." Except the payment never arrives.
“Many bad actors will offer to buy your coins at higher-than-market-rates and make a deposit directly into your PayPal account.”
This is especially common on peer-to-peer exchanges. Make sure to use an escrow service. Local Bitcoins employs escrow to ensure that transactions between individuals are made securely.
Unfortunately there is no recourse. You can report the site and write bad reviews, but who are you kidding?
They will just set up shop under a new domain name and wait for their next victim.
Email Phishing Scams
Under the pretense of an "a system upgrade" or "password update," scammers will send you an email with a link to a fake website.
It will look exactly like your exchange or wallet website. You login or provide your account details and BAM! They are in and you are OUT.
“It will look exactly like your exchange or wallet website. You login or provide your account details and BAM! They are in and you are OUT.”
Safeguard yourself by making sure the site a a SSL certificate and that the domain ins prefixed with "https" as apposed to "http."
An SSL certificate means there is a very high likelihood the message is coming from a legitimate source.
In this type of scam, a link is sent via email, banner ad, or forum ad. Clicking will download malware to your computer. Often, the malware is a key-logger that records everything you type on your keyboard and transmits it to the scammers.
“Often, the malware is a key-logger that records everything you type on your keyboard.”
They will be able to extract your log in credentials and other sensitive data from that information. Unrecognized senders and misspelled domains should raise a red flag.
Use offline storage methods such as a paper or hardware wallet to prevent access via this scam method.
Cloud Mining Scams
While most cloud mining companies are legitimate, there are some that offer huge returns for a minimal investment.
Search Google for reviews and closely peruse their website to get a feel for their legitimacy.
Do plenty of research, read reviews, and browse the crypto-mining communities for information on the best and most trustworthy cloud mining companies.
Ponzi scams are probably easier to spot than most other scams. They guarantee outlandish returns on investments with little to no risk to the investors.
Any company that guarantees exponential returns should be viewed as a potential scammer.
“You should be suspicious of anyone who guarantees a 10% return on your investment every single day.”
You should be suspicious of anyone who guarantees a 10% return on your investment every single day.
Ponzi schemes rely on new members to pay off their early investors. They offer incentives for members to recruit new people to join their network.
It’s very common for scams like this to offer some form of affiliate rewards.
Remember, if it sounds too good to be true it probably is! Pay close attention to any emails or other requests you receive asking for your private keys or login information. Always exercise due diligence and investigate the entities with which you do business.
Always operate under the basic assumption that whoever you are dealing with wants to steal your crypto!
And remember, CryptoVerrified.com is always here to help you survive and thrive in this new and exciting space! We have an awesome FREE Crypto Guide and toms of resources at our crypto blog.
You might also enjoy our article: How To Safely Buy Bitcoin 2020