Criminals have come up with many ways to steal cryptocurrency. They create fake exchanges, fake websites, and applications, and this is not the whole list. We, LATOKEN experts, decided to create a special list of rules. Following our simple instructions will help you save your money.
You can lose your savings when buying and selling cryptocurrency for fiat money. One of the most popular ways to exchange digital coins for dollars or euros is through exchangers. Traders transfer assets to the service, which sends currency, for example, to a bank card or electronic wallet.
There are hundreds of exchange services, and fraudsters may be hiding among them. After receiving funds, they can appropriate them for themselves, explaining this for many reasons and, for example, referring to a technical problem, the “freezing” of a transaction in the blockchain, accusing the user of an incorrectly specified address or that he did not click on the “pay” button.
As a rule, scammers do this to gain time and try to deceive other traders before the scheme is widely publicized. If the exchanger did not give your funds for some reason, you should immediately clarify it with technical support. If the answer seems suspicious, you should write about it on special forums and spread the story. You will unlikely get your money back, but you may save other market participants from using this service.
In order not to lose savings, you should study user reviews. Perhaps someone has already faced delays or non-payments. If so, it is better to refuse the services of such an exchanger.
It is also advisable not to use exchangers where the rate is significantly higher than the market one. Fraudsters can thus attract new customers.
Fraudsters can create not only exchange services but also exchanges. Some of them may exist only to attract traders and then steal their cryptocurrency.
Fraudsters create a so-called cryptocurrency exchange, which at first glance is no different from an ordinary one. You can create an account there, add money to your wallet and sometimes even trade. But if you transfer funds to such a website, they will immediately be in the hands of attackers. In this case, it will be impossible to withdraw coins.
Fraudsters can come up with many reasons for denying withdrawals. For example, they may refer to a technical problem or require identity verification. It is impossible to complete this process in such cases. As a rule, documents may be pending for months and ultimately not be approved.
If the exchange allows you to create an account and add funds without going through verification but requires it to withdraw funds, it may be a fraud, especially if the site does not report such conditions.
To not lose money, it is advisable to start getting to know each new site with a small amount, for example, $10-15. Try transferring this money to see if withdrawals work.
Another rule is not to use small, unknown sites but to trade on popular ones. As a rule, they are time-tested and have a well-deserved reputation. However, this is not a guarantor either.
Scammers also create fake websites of popular exchanges, exchangers, and other services. It is done, of course, to steal user data. The trader goes to the fake site of the trading platform and enters his login and password. The attackers get this information and can use it to gain access to the real user account.
There is another way to cheat: scammers create a fake wallet site to store cryptocurrency. A user visits it and downloads a fake app. Then he installs the wallet and transfers the cryptocurrency to it, not suspecting that he is sending funds to scammers. Another risk is that you can download not only a fake wallet but also a data-stealing virus.
LATOKEN specialists are also sure that it would help if you stay alert when entering crypto and stock exchanges through search engines. Fraudsters buy ads there, and “search engines” can easily offer you to visit fake websites, which may also appear at the top of the list.
DeFi, ICO, and cryptocurrency giveaways
In 2020, the field of Decentralized Finance (DeFi) became very popular. Cryptocurrencies related to it rose in price by hundreds and thousands of percent in a short period. For example, the YFI token rate from July to September increased by 130,000%, from $ 32 to $ 44,000, and has now dropped below $ 16,000. There are many similar examples.
As a result, users started chasing DeFi tokens, hoping to buy a coin that would replicate the YFI experience. Scammers took advantage of this demand and came up with many deception methods.
For example, scammers create fake Defi tokens and add them to decentralized sites like Uniswap. Anyone can list a coin on such platforms. As a result, it turns out that a real cryptocurrency and many of its clones are traded on one exchange. If you buy one of them, the funds will go to scammers.
Users have also become more active in ICOs, trying to make quick money. Fraudsters have found ways to cheat in this case too. They create a website where they describe the “sky-high” prospects of the future token and organize ICO. Users are attracted through social networks such as Telegram. Scammers add hundreds of traders to their channel, where they advertise the token sale.
Under the ICO terms, users are often asked to go through identity verification and send Ethereum to the specified address. After that, the project must send its coins to the token sale participants and list the asset on the exchanges. If scammers organize the scheme, users do not receive anything in exchange for their Ethereum, and the project site and its social networks disappear immediately after the ICO. Besides, the fraudsters get traders’ personal information.
The problem is that the way ICOs are conducted in DeFi with real projects and fraudulent ones is almost identical. It isn’t easy to distinguish them. Therefore, it is safer to participate in token sales that have received the support of specialized media. Media are generally hesitant to risk their reputation by advertising fraudulent schemes.
Now you are much more familiar with ways to avoid losing your cryptocurrency because of scammers. Just follow these LATOKEN rules, and your funds will be safe!