🛡️Safety Measures

METAVIX team will never DM you first or ask you to share any sensitive information or wallet private keys.

Introduction

Scammers are always looking for new ways to steal your money, and the massive growth of Cryptocurrency & NFT in recent years has created plenty of opportunities for fraud. Cryptocurrency & NFT crimes had a record-breaking year in 2021 – according to a report by blockchain data firm Chainalysis, fraudsters stole $14 billion of crypto that year. If you’re interested in crypto, it’s important to be aware of the risks. Read on to find out more about common crypto scams, how to spot them, and how to avoid them.

Fake websites

Scammers sometimes create fake cryptocurrency trading platforms or fake versions of official crypto wallets to trick unsuspecting victims. These fake websites usually have similar but slightly different domain names from the sites they attempt to mimic. They look very similar to legitimate sites, making it difficult to tell the difference.

Phishing scams

Crypto phishing scams often target information relating to online wallets. Scammers target crypto wallet private keys, which are required to access funds within the wallet. Their method of working is similar to other phishing attempts and related to the fake websites described above. They send an email and/or create fake support accounts and act like they are the official support of a project to lure recipients to a specially created website asking them to enter or share private key information. Once the hackers have acquired this information, they steal the cryptocurrency & NFTs in those wallets.

Pump and dump schemes

This involves a particular coin or token being hyped by fraudsters through an email blast, DM or social media such as Twitter, Facebook, or Telegram. Not wanting to miss out, traders rush to buy the coins, driving up the price. Having succeeded in inflating the price, the scammers then sell their holdings – which causes a crash as the asset's value sharply declines. This can happen within minutes.

Fake apps

Another common way scammers trick cryptocurrency investors is through fake apps available for download through Google Play and the Apple App Store. Although these fake apps are quickly found and removed, that doesn't mean the apps aren't impacting many bottom lines. Thousands of people have downloaded fake cryptocurrency apps.

Fake celebrity endorsements

Crypto scammers sometimes pose as or claim endorsements from celebrities, businesspeople, or influencers to capture the attention of potential targets. Sometimes, this involves selling phantom cryptocurrencies that don't exist to novice investors. These scams can be sophisticated, involving glossy websites and brochures that appear to show celebrity endorsements from household names.

Giveaway scams

This is where scammers promise to match or multiply the cryptocurrency sent to them in what is known as a giveaway scam. Clever messaging from what often looks like a valid social media account can create a sense of legitimacy and spark a sense of urgency. This supposed ‘once-in-a-lifetime’ opportunity can lead people to transfer funds quickly in the hope of an instant return.

Blackmail and extortion scams

Another method scammers use is blackmail. They send emails that claim to have a record of adult websites visited, having naked photos of the user and threaten to expose them unless they share private keys or send cryptocurrency to the scammer.

Cloud mining scams

Cloud mining refers to companies that allow you to rent mining hardware they operate in exchange for a fixed fee and a share of the revenue you will supposedly make. In theory, this allows people to mine remotely without buying expensive mining hardware. However, many cloud mining companies are scams or, at best, ineffective – in that you end up losing money or earning less than was implied.

Fraudulent initial coin offerings (ICOs)

An initial coin offering or ICO is a way for start-up crypto companies to raise money from future users. Typically, customers are promised a discount on the new crypto coins in exchange for sending active cryptocurrencies like bitcoin or another popular cryptocurrency. Several ICOs have turned out to be fraudulent, with criminals going to elaborate lengths to deceive investors, such as renting fake offices and creating high-end marketing materials.

How to spot Cryptocurrency & NFT scams

Warning signs to look out for include:

Promises of guaranteed returns

No financial investment can guarantee future returns because investments can go down as well as up. Any crypto offering this promises you will definitely make money is a red flag.

A poor or non-existent whitepapers

Every project should have a whitepaper since this is one of the most critical aspects of a project. The whitepaper should explain how the project has been designed and how it will work. If the whitepaper doesn’t make sense – or worse, doesn’t exist – then tread carefully.

Un-doxxed team

With most investment businesses, it should be possible to find out who the key people behind it are. Usually, this means easy-to-find biographies of the people who run/owns the project plus an active presence on social media. If you can’t find out who is running a project, be cautious.

Free money

Whether in cash or cryptocurrency, any investment opportunity promising free money is potentially 50-80% fake.

How to protect yourself from Crypto & NFT scams?

Many crypto & NFT frauds are sophisticated and convincing. Here are some steps you can take to protect yourself.

Do your research

The most popular Crypto & NFT projects are not scams. But if you haven’t heard of a particular project, research it – see if there is a whitepaper and/or road map you can read, find out who runs it and how it operates, and look for genuine reviews and testimonials. Look for an up-to-date and credible fake projects list to check for scams.

Protect your wallet

To invest in Crypto or NFT, you need a wallet with private keys. legitimate projects would never ask you to share your private keys. If a project's team ask you to share your keys to participate or whatever, it’s highly likely to be a scam. Keep your wallet keys private.

Keep an ete on your wallet app

The first time you transfer money, send only a small amount to confirm the legitimacy of a crypto wallet app. If you’re updating your wallet app and you notice suspicious behavior, terminate the update, and uninstall the app. Here are some of trusted wallet apps: Metamask, Trust wallet & Phantom.

Only invest in things you know

If it’s not clear to you how a particular cryptocurrency or NFT works, then it’s best to pause and do further research before you decide whether to invest.

Take your time

Scammers often use high-pressure tactics to get you to invest your money quickly – for example, by promising bonuses or discounts if you participate straightaway. Take your time and carry out your own research before investing any money.

Be wary of social media adverts

Crypto scammers often use social media to promote their fraudulent schemes. They may use unauthorized images of celebrities or high-profile businesspeople to create a sense of legitimacy, or they may promise giveaways or free cash. Maintain a healthy skepticism when you see crypto opportunities promoted on social media and do your due diligence.

Ignore cold calls

If someone contacts you out of the blue to sell you a crypto investment opportunity, it’s probably a scam. Never disclose personal information or transfer money to someone who contacts you in this way.

Only download app from official platforms

Although fake apps can end up in the Google Play Store or Apple App Store, it is safer to download apps from these platforms than elsewhere.

Is it too good to be true

Companies that promise guaranteed returns or to make you rich overnight are likely to be scams. If something seems too good to be true, tread carefully.

Conclusion

Finally, as with any investment opportunity, never invest money you can’t afford to lose. Even if you're not being scammed, cryptocurrency & NFT projects are volatile and speculative, so it's essential to understand the risks.