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Smart Ways Scammers are Stealing Your Crypto and Data
Over the years, we’ve experienced a surge in interest and growth in the use of cryptocurrency. The meteoric rise of digital currency has attracted many people’s attention and potential investors. Unfortunately, this surge has also seen an increase in opportunistic crypto scammers and fraud cases.
Cryptocurrency owners are more susceptible to hacking scams because online wallets store digital coins. Scammers have also realized clever ways to infiltrate software storage devices like desktops and mobile phones.
The increase in fraud cases is sometimes attributed to centralized institutions’ lack of regulation of crypto assets. However, its decentralized feature is usually seen as a benefit until scammers use it to skirt the law and commit fraud. Furthermore, a lack of a governing body makes it difficult to account for the total number of fraud cases.
The general public is already somewhat aware of the typical online scamming schemes. Unfortunately, this has forced scammers to find more innovative ways to steal from unsuspecting individuals. Let’s look at some of the ingenious ways these scammers are using to drain your digital wallets.
An initial coin offering (ICO) is the equivalent of a company going public and is initiated as a way for companies to raise capital. An ICO occurs when a company sells its cryptocurrency and allows the public to back its favorite companies.
It is one of the best results of cryptocurrency development, but ultimately scammers found a way to use it to commit fraud.
With thousands of blockchain-based companies entering the market every year, all scammers must create fake websites resembling ICOs. They then separate investors from their money by instructing them to deposit coins into compromised wallets.
A more advanced scammer then pretends to be an already existing real cryptocurrency-based organization willing to start sharing their ICOs. They go as far as portraying fake team members, paying celebrities to promote their venture, and lying about products.
Fake Cryptocurrency Exchanges
The decentralized nature of cryptocurrency doesn’t exclude it from being bought and sold at exchanges. On the contrary, an exchange platform makes it easier for investors and new cryptocurrency users to find coins. Unfortunately, scammers have discovered ways of creating fake cryptocurrency exchanges.
Scam platforms are becoming problematic for investors without a regulatory body overseeing the exchanges.
Scammers trick users by offering extremely competitive market prices and inflated traction metrics. They create flashy websites that boast a large following in the crypto world.
This forces investors to feel like they miss out on an ample opportunity if they don’t invest.
Scam coins often use the word Bitcoin to insinuate their legitimacy and connection to genuine cash. Furthermore, they present themselves as part of a broader trading platform, acting as affiliates of respectable, legitimate organizations.
Hardware Wallet Theft
Scammers prove to have the ability to circumvent any security measures, and hardware wallets are no different. Hardware wallets are physical devices that store users’ private keys offline. They are a measure of protection getting increasingly popular among investors concerned with their security and privacy.
So how do scammers possibly compromise a hardware wallet?
These wallets, usually as small as a keychain USB drive, may come with a built-in vulnerability that makes them susceptible to hacking and the user being robbed.
The scammers compromise a wallet by selling them to a user with a ‘preconfigured’ seed phrase hidden under a scratch card. Scammers advise the user to set up the Wallet with the seed code on the scratch card. Thus the user unwittingly activates a backdoor for the scammer to drain their funds in the Wallet.
As popular as Bitcoin is, it’s a known fact that other alternative cryptocurrencies exist. Scammers have taken advantage of this and pretend to present a new cryptocurrency to buyers as an alternative to bitcoin.
They convince buyers and investors that they need to invest in this new and upcoming cryptocurrency before it blows up in revenue. To seem legitimate, they mislead investors by claiming that faux coin is actively traded on several platforms. Once an investor buys these scam coins, the scammer quickly transfers the funds to personal accounts.
Expert scammers often create legitimate websites or closely mimic legal organizations to fool the public. For example, this scam convinces users to grab a once-in-a-lifetime opportunity to generate a unique cryptocurrency wallet.
With their close resemblance and supposed affiliation to a legitimate organization, buyers assume everything offered is accurate. They then share their private keys and seeds on the website to get access to their new wallets. Unfortunately, this opens the door for scammers to drain their funds.
Protection From Scammers
The more widespread cryptocurrency continues to be, the harder fraudsters will work to scam people. Unfortunately, we’re still at a point where cryptocurrency is volatile, and losing more money to scams is not an option.
There is no specific way to protect yourself, but if you research and trust legitimate platforms, you’re on the right path. Services like Samourai Whirlpool or Wasabi wallet are available to protect you from scams and identity theft.
The service works by mixing your funds and giving you new coins while at the same time confusing any hacker observing you. In addition, your identity is kept safe as the process keeps you completely anonymous, preventing hackers from stealing it.
Without any human assistance and completely automatic services, you’re assured no one is handling your funds with nefarious objectives. Furthermore, the service doesn’t save transaction information once a mixer is complete, so there is no log tracing back.
You can protect yourself and your cryptocurrency from these malicious scammers who are out to get you at a minimal fee.
With the growing popularity of cryptocurrency and the road toward mass adoption, we can only expect scammers to be more vigilant. They are bound to develop new ways to con people out of their digital assets.
Remaining vigilant is not enough. Besides doing thorough research on the cryptos and exchanges or wallets you interact with, it helps to have some extra protection.