The cryptocurrency market is a dangerous place. If you aren’t paying full attention it will take everything you have. While the volatility of the market alone is risky enough. Recently the real danger has been through scams, and people essentially trying to take your money. Because the crypto market is open 24/7/365, you always have control over your funds. This means you are always vulnerable. There are no returns or refunds in crypto. All it takes is a few seconds of carelessness for you to lose everything.
If you have ever lost money in crypto due to liquidations, funds being frozen on insolvent services, rug pulls, or scams; it is a soul-crushing experience that I would never wish upon anyone. It is my hope that the following types of crypto scams can help give you a reminder to always be on the lookout. Who knows, it could help prevent you from making a costly mistake.
1. Giveaways — Doubling Your Crypto
Perhaps the most infamous crypto scam is the whole, “If you send me 1 Bitcoin, I’ll double it and send you 2 Bitcoin in return.” In situations like this, you need to stop yourself and ask why would someone ever want to do this. And even if they did want to give you free money, why would they want you to send them crypto first?
The answer simply is that they wouldn’t. If a situation feels too good to be true; it is. The world is difficult out there. There aren’t people who are going to give you thousands of dollars worth of crypto for free. Each and every time you see a giveaway like this, even if it is from a celebrity. You should already assume that its a scam, and their account has likely been hacked. Unfortunately far too many people have lost money in these types of crypto scams.
2. Scam Bot Comments
Another problem that has been rampant in the crypto industry recently is scam bot comments. You have likely seen them everywhere already. Popular on places such as YouTube, Twitter, Instagram, Medium, and nearly everywhere.
Scam bot comments in recent years have made comment sections nearly unusable. Typically they will advertise that they made money thanks to an expert that gave them investing advice. And you can have the same success if you message them on WhatsApp or Telegram.
I cannot stress this enough to you. Anyone who is trying to contact you telling you how to make money with crypto, especially anything involving WhatsApp or Telegram is a scam. Flatly ignore them.
3. Influencers
Crypto is largely an unregulated casino, and there is no better example of that than influencers on YouTube and Twitter. If you have ever seen a thumbnail for a crypto youtube video where someone is showing a shocked face; declaring that a coin is about to pump or go up 100x. You can already assume that they are either shilling you something or are phony.
If they are talking about Bitcoin or Ethereum, it’s likely that they’re wanting you to sign up for a trading service using their referral link. If they are talking about an altcoin being a potential 100x coin, it’s likely that they have either been paid to advertise that coin. OR, they’re hoping to pump and dump the token.
Either way, you are the product for them. They’re using you as exit liquidity and shouldn’t be trusted.
4. Too Good to be True / Staking Rates
Finally, the last scam in crypto that you should be aware of is “too good to be true” staking or lending interest rates You will often see advertised staking rates of several hundred percent, perhaps even thousands of percent. There is no way that this is sustainable for the long term. Something that we learned very well with the UST stablecoin being unable to sustain a staking rate of nearly 20%. It was too good to be true.
A lot of the tokens that feature these incredible rates would also be considered “junk” coins. They likely will quickly fade away and have no value. A staking rate of 200% on a coin that drops 99% is almost nothing. Always remember that.
While the cryptocurrency industry is a market that I love and have a great passion for. There is no denying that it is still the Wild West, and can be very dangerous. It’s likely that you have already seen many of these scams. But I hope they can be a good reminder of the danger that is lurking out there. Invest wisely.
How about you? Have you ever fallen for a crypto scam?
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