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Cryptocurrencies like Bitcoin, Litecoin, Ethereum and more have become a very hot commodity in the online trading world. They provide smart investors with a great opportunity of making a profit, but there is a downside. The prospect of making it big and quick riches often end up blinding people to the risks in a market and the same is applicable to cryptocurrency. Most people are so focused on reaping the benefits that they don’t realize they are being lured into scams. Cryptocurrencies are not the same as conventional currencies because they are not backed by government-money and their value is driven through the forces of demand and supply.
This fact can create big swings in their prices, which can result in big gains or big losses for investors. In addition, cryptocurrency trading is subject to less regulatory protection as compared to traditional financial products like stocks and bonds, which has made it a popular target of scammers. But, for all the high-gloss that’s associated with cryptocurrency, most of the scams that happen in this market are just newfangled versions of some of the classic ones that have existed in every market. The ‘pump and dump’ scam is one of the most common ones that you will find in this market.
It involves scammers using chat rooms and messaging apps for planting crypto rumors about people investing in a certain digital currency. Big names are used to lure investors in who go on a buying spree and drive up the price. The scammers then sell their stake at a high value before the price plummets when the truth is revealed. Ponzi schemes that involve peddling nonexistent opportunities for investment in cryptocurrencies and creating the illusion of high returns by paying off old investors with money from new investors are also common.
Some fraudsters also set up phony crypto brokerages to take advantage of traders, but it is important to remember that some brokers are victims of crypto scam rumors. It is important to check reviews to identify which brokers are scams and which are authentic in order to ensure you make the right choice. Brokerage reviews, such as XTRgate review, can give you details about how the broker works, the features it offers and what makes it a good fit for a trader. Apart from that, the market also has its shares of hackers who directly hack into digital wallets and steal cryptocurrencies.
If you don’t want to be a victim of any of these real scams or rumors, you need to follow a few rules. First, you shouldn’t believe anyone when they send you a message out of the blue about an opportunity of investing in cryptocurrency. You should steer clear of the pitch if it is promising surefire profits and highlighting no risks. If you don’t understand how the crypto market works, it is best to avoid it altogether. Also, make it a priority to read reviews before you opt for any broker or investment opportunity to minimize the risk.
If you don’t want to be a victim of any of these real scams or rumors, you need to:
- a) Stop Guessing – When it’s your money and investment on the line, there’s no more room of guessing whether the website you’ve searched for is the real deal or a fake one. There’s no argument that the person giving you a solid tip for the investment in crypto-currency is someone you trust with your money, has a vast amount of experience, knowledge and expertise in crypto-currency and their mechanics. But there are high chances that although the website and platform this person discussed with you is authentic, you end up opening up the wrong website by either misspelling or entering wrong keywords while searching through the internet recommended information as well as the website name but there are higher chances that you end up searching the wrong website that the scammers have planted where a single mistake of entering wrong letter can take you to this bad investment which in turn can cost you a fortune.
- b) Know your website – By now you must have figured out as to how the scammers can lure you into opening up your wallets and make investments on the wrong platforms. So the best way to avoid getting victimized is to always be sure as to what the correct website address is as the imposters have advanced themselves into making almost identical and well established websites where you may end up spending your money by judging the book by its cover. You must always check a website’s authenticity via social mediums, gathering insights and feedback from the internet community by sharing the website link to avoid any resentment and loss.
- c) Scamming Apps – In the current times, almost every person has a smartphone in their possession and almost any app is available through Google App store or Apple App store. The scammers/imposters have found their way even to these platforms where they design and share fake apps, giving false hopes to people who want to make small investments into making quick money. Although, the stakeholders do often get rid of these fake apps from the platforms, but by the time they do it, the apps already end up making their way into thousands of people’s phones, thus falling prey to such scammers. The only way to avoid such scams is to know the brand well enough to identify whether the brand logo is authentic or a forgery as the imposters do a good job of making almost identical logos with minor changes.
- d) Fake pages and Deceitful Social Media Updates – Almost everyone one of us currently has their accounts on more than one social medial platforms where we connect with people we know and also follow Celebrities or Executives who inspire us and motivate us in their unique ways. Although, there is no doubt that these personalities that we follow and look up to are genuine, yet there’s no proof as to how authentic their social media pages are but we tend to follow their pages on a daily basis. The same logic is being practiced in cryptocurrency here the imposters plant bots into sending fake money making offers or opportunities to large number of social media users and depriving them of their hard earned money. Therefore, don’t trust offers coming from familiar social media platforms, as if they want to reach out to you, they have more authentic ways of doing so instead of sending you an email.
The Future Belongs to Cryptocurrencies
There is no denying the fact that cryptocurrencies are the future and this is rightly so because according to a study it is expected that one thousand dollars worth investment in cryptocurrency in 2013 has increased to more than four hundred thousand dollars in less than a period of five years. Like any other trading system, cryptocurrency is not immune from risks and dangers of scamming. In the field of trading, forex trading is the most common trade with an estimate of average trading exceeding US$ 5 trillion per day. Irrespective of its size and potential, even forex trade is not alien to scams and frauds.
Similarly, the financial institutions which are the most important and major players in development of economies in any country are prone to be victims of frauds, irrespective of their endless struggles in introducing high-end systems to detect and eradicate the elements of frauds. There are thousands of complaints registered on daily basis which involve online frauds. In most of the cases, it has been seen that the account holders have been fooled in giving up their confidential data to the scammers and fraudsters and their accounts have been compromised. As a result illegal transfers have been made from their accounts to unknown beneficiaries which resulted in the loss of their hard earned money.
The point is that every business or every trade and/or trading system has risk factors attached with it which cannot be ignored. But the most important thing is the capability of minimizing the risk factor which can be ensured through effective planning, desire to learn and apply more balanced approach before making any hasty decisions.
Compared to forex trading or any other trade, cryptocurrency offers very safe mode of conducting transactions. This is because you are the ultimate controller of your account, data, currency etc. and keeping in view the fact that cryptocurrency does not have any physical form, the risk factors are automatically marginalized. This is due to the fact that when you are transferring cryptocurrency to some other person although your wallet is visible to the transferee but your details are not shared and the transactions are mutualized wallet to wallet. It is thus advised before falling into a trap to do your research to find out whether the chat rooms and messaging apps for planting crypto rumors about trending investment in a digital currency have any credibility or not.