The cryptocurrency ecosystem is always characterized by low liquidity and few institutional investors. Always eager to keep assets and business volume high, it also attracts all kinds of speculators who, in the traditional financial market, cannot find support due to numerous regulations and taxation.
Bitcoin scams typically follow a pattern flow based on cryptocurrency prices, typically bitcoin.
As Bitcoin prices peaked, the number and frequency of these scams increased and more criminals used it for transactions.
Its numbers have now fallen as prices have fallen, the number of transactions on its network has declined, and it has become an unattractive investment option.
The development of the cryptocurrency ecosystem infrastructure favored the many scams on the network.
The earlier blockchain infrastructure, at the time of the release of bitcoin, was more primitive, it allowed for many more social scams than it does today - but this privatism has occurred in other stable coins or altcoin.
At that time, illicit activities in the Bitcoin ecosystem reflected its use cases, with cryptocurrency primarily used for illegal transactions.
The nature of Bitcoin scams has changed as the cryptocurrency infrastructure and investor base have evolved.
These days, Bitcoin investors can increase their chances of success by spotting common scams such as Ponzi schemes, fake ICOs and fraudulent exchanges, currently using bScan or etherscan verification systems.
However, for other cryptocurrencies, with fewer tools and more false information, investors are deceived every day, especially micro investors.
Initial Coin Offers (ICOs) are the most relevant at the moment: they mainly leveraged mainstream media talks about Bitcoin.
The most used social channel has been telegram groups: they provide potential investors with the chance to invest in a new industry that promised exponential returns.
What they didn't mention is that such offerings aren't regulated by the Securities and Exchange Commission (SEC) or that they don't have release certificates, nor do they tell you risks and how to claim returns or losses.
As Bitcoin became more popular and attracted the attention of institutional investors, hackers changed their strategies to target cryptocurrency portfolios.
Phishing, a decades-old method used to steal financial information, is an especially popular method for hackers to steal user key information for cryptocurrency wallets.
The continued attention of Bitcoin investors means that the scams and scams associated with Bitcoin and the cryptocurrency ecosystem are likely to become more sophisticated in the future.
Types and methods of theft or deception most used today:
- Exchange and Wallet Hacks: Simply the theft of customer email addresses by breaching the email and marketing databases of Ledger, a French encrypted wallet company.
They also steal customer personal details and post customer email addresses to a hacked deepweb database site.
- Social media scams: The rise of social networks was accompanied by the rise of hacker attacks on personal pages through arguments and negotiations that lead to deceive the user of the network. And so, it's not surprising that hackers are using the reach of social media to target cryptocurrency investors.
The procedure is simple: They create fake social media accounts to solicit cryptocurrencies from followers or hack popular Twitter accounts directly, through an appealing and seductive lip and with hard-to-ignore "referral" promises. In fact, it all depends on how greedy the deceived is: the one who considers himself the smartest is usually the most easily deceived.
Twitter isn't the only social media platform affected by scams.
The video sharing platform YouTube, facebook and instagram have potentially become sources of constant and well-crafted attacks. Therefore, always double the care with false or very generous promises, almost always with FREE or EASY earn coins.
- Social Engineering Scams: Scams in which hackers use psychological manipulation and fraud to gain control of vital information related to user accounts.
Phishing, for example, is a widely used social engineering scam whereby hackers send emails linking their targets to a fraudulent website created especially to request important details such as bank account information and other personal details.
In the context of the cryptocurrency industry, phishing scams target information belonging to online wallets. Specifically, hackers are interested in crypto wallet private keys, which are the keys needed to access funds within the wallet. Its working method is similar to that of many standard scams. An email is sent taking the holders to a specially created website, which asks them to enter the private key information. When hackers acquire this information, they can steal Bitcoin and other cryptocurrencies contained in these wallets.
Another popular method of social engineering used by hackers is to send blackmail emails with cryptocurrencies, called ramsomware.
In such emails, hackers claim to have a record of adult websites visited by the user and threaten to expose them unless they share private keys.
The best way to protect yourself from phishing scams is to avoid clicking on links in such emails or verifying that the email address actually belongs to that company by calling them or checking the email's syntax. For example, users must verify that the linked web address is encrypted (that is, its URL starts with HTTPS). Visiting unsafe websites is a bad idea.
- ICO scams: A popular method is to create fake websites that resemble ICOs and instruct users to deposit coins into a compromised wallet.
In other cases, ICO itself may be to blame: the founders distribute tokens that flout US securities laws or mislead investors about their products through misleading advertising, attracting the return, or withdrawal, that these tokens can give daily.
- DeFi Carpet Pulls: DeFi Carpet Pulls are the latest type of scams to hit the cryptocurrency markets.
Decentralized Finance or DeFi aims to decentralize finance by removing the guardians of financial transactions.
This type of transaction, due to the attractiveness of communication and the fast way of realizing assets, has become a magnet for innovation in the cryptographic ecosystem.
But DeFi platforms are beset with problems: the pull mat has become especially prevalent as DeFi protocols have become popular with crypto investors interested in boosting returns by hunting for revenue-generating cryptographic instruments.
Abrupt contract terminations, which lock in funds for a certain amount of time, are the most popular method for programmers to steal funds.
The method is simple: the contract expires or reaches a previously defined limit, developers use computational functions or strategies to subtract cryptocurrencies from the funds. When time is released, there is nothing of value in the contract.
Overall, the methods described above do not really make the cryptocurrency network an unsafe place to invest. Cryptographic algorithms, the current blockchain, lighting and secondary networks, for example, are capable of repelling computational attacks.
In other words, within the computer system of cryptocurrencies it is very difficult to have theft.
The preferred channel for thefts depends on humans: the seduction and greed of earning more in less time, or earning more without effort, or earning much more without doing or spending, is what determines whether the investor will become a target or not for hackers.
In fact, just as leaving a bank counting money will attract thieves, or at least glances, to the money in your hand, scams depend on how greedy the victim is and how exposed, when it comes to registering the wallet in any hole, the investor puts himself.
Most investors who want to earn a lot, put wallet addresses on everything that is crap, without checking anything. Just because the site promises everything for free.
In short: greed leads to impatience, impatience leads to insecurity, insecurity leads to recklessness, recklessness leads to illusion.
Once deceived, the victim becomes easy prey to any hacker or thief.
In the end, all that remains is the dust and the disgust!
Worse: no one to complain or protest or get back your investment!
