In this guide you will learn what are the top 5 crypto scams in 2021 and how you can avoid losing your hard earned money
What are the most common bitcoin & crypto scams? (2021)
Billions of dollars are lost to crypto scams every year. Even though the awareness of cryptocurrency frauds and hacks is rising, millions of people are still falling victim to blockchain scammers. But which crypto scams are the most common, and how can you avoid them?
The Evolution of Crypto Scams - from zero to billions stolen yearly
The more popular crypto gets, the more common crypto scams become. The amount of funds lost to cryptocurrency frauds and hacks before 2018 wasn’t very significant. Then, during the famous 2018 Bitcoin bull run, the price of BTC and numerous altcoins erupted massively.
The crypto ecosystem suddenly became very valuable. Scammers, hackers and other fraudsters noticed there’s tons of money to be made by stealing the funds of gullible newcomers desperate to buy some crypto after they’ve heard about Bitcoin’s success on the news.
Before 2018, the amount of money lost by blockchain enthusiasts was relatively small - in 2017, only $170 million was stolen by hackers and scammers. When the Bitcoin price erupted, the amount of money lost increased by 10x in just a year.
But the worst was yet to come. In 2019, a record-breaking $4.5 Billion worth of crypto was stolen. The reason is simple: ICOs. While some ICOs turned out to be legitimate projects that made the investors rich, most of them were just scams. Lured with fancy websites and promises of becoming millionaires overnight, people were sending their BTC and ETH to scammers, only to be left with worthless ERC-20 tokens and failed hopes.
The ICO scams were so notorious that people simply stopped buying ICO tokens altogether, and launching Initial Coin Offerings became unpopular among developers. But that doesn’t mean crypto scams died off with ICOs, and unfortunately people are still losing money to frauds and hacks.
What are the most common crypto scams in 2021?
Fake Websites & Mobile Apps
Fake websites and mobile apps are among the most dangerous types of crypto scams. The reason for that is the fact that not only newcomers and crypto beginners fall victim to them. Even blockchain veterans can lose money because of fake websites, as all it takes is a momentary distraction.
Fake websites look exactly like the real thing - the entire website design is copied from the real thing, so you can’t know if a website is legit or not just by looking at it.
The only way to distinguish fake websites from a real one is by looking at the URL. Scam websites usually use addresses very similar to real URLs. For example, a fake website pretending to be Binance.com will have an URL like Biinance.com or Blnance.com.
If you forget to check if the address tab doesn’t look suspicious and you type in your login and password on a fake website, the scammers will use it to log into the real website and steal your money.
There’s only one way to protect yourself from fake websites - always check the URL before you log in to any website!
Celebrity Impersonators on Twitter
It’s hard to believe that people are still falling for celebrity impersonators, but it’s true. Some people still forget this simple fact: nobody will give you free money on Twitter. Neither John McAffee, nor Elon Musk, nor Vitalik Butarin, nor anyone else.
The reason why fake celebrity scammers are more common on Twitter than on other social media is simple: Twitter is much more popular among crypto enthusiasts than Facebook or Instagram. But it doesn’t mean that the person offering to double your ETH on Snapchat is the real Elon Musk - celebrity impersonators try to scam people on all social media platforms.
Hackers use bot accounts to reply with positive messages to the giveaway scam tweets to make it look legit. Do not fall for it!
If anybody is offering to send you free crypto or double your money - stay away!
Youtube Crypto Ad Scams
Youtube crypto ad scams are similar to the celebrity impersonator scams, but they are more complex and might seem more legit at first. Instead of using the comment section, scammers actually buy ads from Youtube, for example to pretend that they are Vitalik Buterin and promise a free ETH giveaway.
Just like with Twitter scams, avoiding Youtube crypto scams requires you to remember just one simple rule: nobody will give you money for free, and you can be 100% sure that the person promising to do that is not the real Vitalik Buterin.
Never click on any links from youtube ads that promise to give you free money or double your crypto!
DeFi Rug Pulls
In many ways, the recent surge in popularity of DeFi is similar to the ICO goldrush from 2019. A large number of Decentralized Finance projects are perfectly legit. But thousands of them are just scams which use the term “DeFi” as a fancy buzzword to lure crypto enthusiasts in.
Just like ICO scams, DeFi scams have no real value and no real use case. Their only purpose is to make gullible people send millions of dollars worth of crypto to the scammers.
Rug pulls are the most common type of DeFi scams. Rug pulls happen when scammers create and start to promote a fraudulent DeFi project. When people deposit enough funds, the scammers simply take away all the money by removing liquidity, shut the whole thing down and run away leaving the investors with nothing.
Fortunately, rug pulls are easy to avoid. If something looks too good to be true, it probably is. It’s better to stick to well-respected and time-proven projects than to fall for a promise of becoming rich quickly and lose money to scammers.
Before apeing into a new low cap DeFi project - ask yourself these questions:
Is the project's code open source? Has the project's code been audited? Is the liquidity locked? Is the team anonymous or can you find their linkedin, github, other socials? Is it a innovative project or just a fork of another project? What is the goal of the project? Is it really achievable?
Scam emails are one of the oldest tricks in the book. They actually predate not only blockchain but also the Internet and even computers. In fact, scammers were using traditional mail to steal people’s money before anyone knew what a computer is.
This type of fraud is often called the Nigerian Prince Scam, because the scammers notoriously used to pretend they are African royals needing people’s help in transferring millions of dollars. Nowadays, the scheme is the same, with the only difference being that the scammers want to steal your crypto and not your fiat.
Whatever the story is - do not believe anyone who claims to send you a lot of crypto, if you send them a smaller amount of coins first!
Crypto scams are still common, and billions of dollars every year are lost to frauds and hacks. Fortunately, almost all blockchain scams are very easy to avoid: just remember that anything that looks too good to be true is most likely a scam, and that nobody on the Internet will give you free money.
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