Top 3 unforgivable cryptocurrency scams and tips to avoid them

In this tech-oriented world, the acquisition of cryptocurrency is evolving at a swift pace with the speed of light. The global market size of cryptocurrency was hitting the figure of USD 1.03 billion in the year 2019. Moreover, it is predicted that the figure will reach  USD 1.40 billion by the year 2024. 

On the shadow side, we are witnessing an unprecedented level of vulnerability. There would be no doubt in saying that cryptocurrency scams are evolving simultaneously with the cryptocurrency acquisition. A deep learning-powered and next-generation fraud prevention company, Bolster came across the key findings in the disruptive cryptocurrency scam report. The report depicts that cryptocurrency scams evolved prominently during the pandemic of COVID-19  when every individual was crawling to find financial assistance with high-security protocols. In 2020, more than 400,000 cryptocurrency scams came into existence. This was a 40% growth as compared to 2019. 

The co-founder and CEO of a bolster, Shashi Prakash claimed that 

“The evolution in cryptocurrency scams is really leaving an adverse impact on industrial goals. They face difficulties while establishing credibility as an asset class. Cryptocurrencies are bringing from hype to mainstream and are becoming more sophisticated. A vast amount of people are buying and selling them. Proactive prevention from up-pacing fraudulent activities and scams provides an opportunity for currencies to develop trust in the market. ”

Below are the top 3 unforgivable cryptocurrency scams everyone must be aware of in 2021 so that investors can shield themselves against such scams in the upcoming years. 

Imposter websites and spamming mailsA phone calculator, a laptop with rates and money and cryptocurrency on a desk trying to avoid scams.

Replication of email that is usually received from a legitimate cryptocurrency company is the most common way of a cryptocurrency scam. This leads us to the fact that verification of email must be an ultimate concern of cryptocurrency investors to combat illicit money transfers and fraudulent activities. Verification of the actual people or organization behind the email must never be ignored. Scammers and hackers often announce fake ICOs or initial coin offerings as a method of stealing substantial funds. 

In addition to that, you cannot be sure enough that you are not following imposter accounts in case you are following executives and celebrities on social media accounts. individuals must think twice before trusting any offerings they are coming across on social media. 

Pump and dump scams 

Pump and dump scams were the most evolving scams in the stock market in such scams, a group of scam artists gathered together to purchase a cluster of penny stocks. This leads to an immense increment in the prices of those stocks. In addition to these evolving prices, they get outsiders to invest in these stocks by utilizing big pledges of easy money. 

Unfortunately, innovative technology has backed up pump and dump scams and has targeted bitcoins, something for which investors can easily fall for even if they don’t usually fall for such traditional schemes. Hence old scams are utilized in an unusual manner for which people are not usually prepared. These schemes are often promoted by utilizing fake news stories as well as fake celebrity endorsements. Digital technology is difficult to dodge and it is not always easy to develop an identification among fake and real stuff. 

Cloud mining scams 

One of the earliest yet non-negligible cryptocurrency scams is acquired by hackers innovatively to steal bitcoins from individuals. Individuals receive a share from the hash power of the platform in return. This hash power should proceed towards bitcoin mining with the profit split among all pool powers.  These funds only pay earlier investors. This way, platforms seem legitimate for a certain time span. These platforms promise tremendous returns as well as agreements for the stimulation of more participants for example lifetime contracts. The website suddenly gets unavailable in a certain region once the platform possesses enough profit. 

 In 2019, one of the most publicized cloud mining scams occurred. Three men were arrested in that incident for committing $722 million in cryptocurrency scams via a network called BitClub Network. Court documents exhibit that the group of hackers consolidated money from investors in exchange for cryptocurrency mining pools shares. Even more, they were also rewarding investors for recruiting more investors.

Tips to avoid cryptocurrency scams Bitcoin cryptocurrency on a phone with rates avoiding scams.

Thankfully there exists a wide range of infrastructures as well as startups, for instance, Shufti Pro provides crucial measures to perform AI-powered identity verification solutions to combat cryptocurrency scams. 

There exist numerous ways to avoid evolving cryptocurrency scams and to combat illicit money transfers as well as fraudulent activities. A few of them are as follow: 

  • Be careful while visiting such websites that offer unrealistic profits and high returns. It is mandatory to do some research about the product provider and analyze customer security measures. Assure that websites are following mandatory regulations. Investors must acknowledge themselves with evolving cases where even experts visit fake websites accidentally and become prey to cryptocurrency. 

Avoid sending cryptocurrency to illicit or unknown external addresses. Following mandatory identity verification processes is crucial to combat cryptocurrency scams. 

  • Never fall for fake screenshots which are promoting ambiguous cryptocurrency offers. Thorough research and deep analysis are mandatory before considering any cryptocurrency offerings. 
  • It is always splendid to report any dubious cryptocurrency offering. 
  • The utilization of 2-factor authentication is also an effective way to dodge fraudulent activities. 

Shufti Pro IDV solutions to combat cryptocurrency scams 

Shufti Pro limited is a software as a service provider (SaaS) which primarily deals with business to business (B2B) market. The headquarters of shufti pro is situated in London UK, providing seamless AI-powered identity verification services in financial infrastructures. With the help of Shufti Pro, real-time identity verification is performed anytime anywhere. Shufti pro provides Know Your Customer (KYC) identity verification with Anti-money laundering (AML) screening, facial biometric authentication, Know Your Business (KYB), video interview KYC with the incorporation of Optical Character Recognition (OCR) technology with synergizing artificial intelligence as well as human intelligence. All the wide- range of services which is provided by Shufti Pro is reliable, real-time, and globally available in more than 150 languages. 

There would be no wrong in saying that Shufti pro is an effective yet efficient solution to fight a strong battle against fraudulent activities, reducing chargebacks, cyber frauds, fake companies, money laundering, identity theft,  last but certainly not least, cryptocurrency scams. With the incorporation of shufti pro, verification is performed within 30 seconds from more than 300 identity documents and performs background screening against 1700+ watchlists. 

Below is the list of Shufti Pro products: 

  • KYC identity verification
  • Face verification
  • Document verification
  • Address verification 
  • 2-factor authentication
  • Consent verification 
  • Facial biometric authentication
  • OCR for Businesses
  • KYB-corporate verification
  • Digital COVID Pass
Jesse Roy
Jesse Roy

Jesse Roy is an identity fraud expert and author of various blogs writing about advanced technologies including artificial intelligence, machine learning, and data science. She is also interested to have an immense analysis of cryptocurrency and evolving cryptocurrency scams. Previously, she has worked as a consultant, often assisting small businesses in digitalization and online fraud prevention.

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