How the COVID-19 Pandemic Led to an Increase in Cryptocurrency Scams?

As you know, the COVID-19 pandemic situation has given a rise to a lot of cryptocurrency scams. By using less money, many people are finding ways to earn a lot of money in a short time. On a regular basis, newer kinds of crypto frauds are being implemented with crypto scams. As COVID’s first case was found in China and there is a complete lockdown.

So the citizen of China uses Digital Yuan for any kind of payment which is their digital currency. Due to this digital payment method, lots of scams take place. In this blog, you will read how the COVID-19 pandemic led to an increase in cryptocurrency scams.

  1. Fraudulent ICOs:

    One of the most common methods to pull off a scam is to fabricate fake ICOs (Initial Coin Offering) and encourage people to buy. This is because ICOs are a great and innovative way to kick start a company and, that is the feature that is misused. You need to read about ICOs (Initial Coin Offering) have become the upbringing ground for these fraudulent ICOs. In its place, it is the unawareness of newbie investors who dream of 100x gains in a matter of weeks by just holding worthless ICO tokens.

    Common signs of fraud ICOs or Token Sales:

  • Copied whitepaper
  • No roadmap
  • Half team anonymous
  • Unusual hurry in execution
  • Ignoring tough questions
  • Mismatch of written and said words
  • No strong and valid reason for the token economy

You need to be aware of such kinds of scams ICOs.

  1. Shady Exchanges:

    Shady exchange is regarded as the second most common form of scam that you will come across. These kinds of exchanges jumped up overnight and started bragging. The most important thing in these exchanges is that you need to be careful. This is because once you trust them and deposit your coins there, you have no option to get them back if the intentions of that exchange are not correct. In addition, some exchanges that start well can run away with your money and time. It is because they fail to scale and innovate to stay relevant in the market.

  2. Fake Wallets:

    Lots of fake android wallets have also been launched on the play store with the launch of bitcoin. So there is a big NO from us to pick any wallet randomly from the play store. The main reason behind it- there are chances that it will be fraudulent and you may end up losing your money. When you use these kinds of wallets, they promise you to control of your funds, never fall for them without proper due industry.

    This techniques is one of the easiest methods to scam people and happens numerous times during the launch of bitcoin forks. This wallet helps to take your private keys and rip you off your BTC too. Though the Apple app store is touted as secure, there are numerous fake apps out there. This story strengthens the idea that you should be attentive when downloading any crypto-related app from the app store.

  3. Pyramid or Ponzi Schemes:

    This kind of scam is easiest to spot, but people still fall for it. It may be a Ponzi scheme when you find a crypto project that actively encourages the employment of new investors in order to maximize their profit. And this system is always working on the model of scamming the one who enters the system later. Moreover, schemes that promise irrational returns are definitely Ponzi schemes. In order to avoid such kinds of scams, you can quickly do a litmus test by following two bits of advice- a renowned bitcoin speaker, and proponent.

  4. Phishing Scams:

    Phishing scams are regarded as another common form of scams in the crypto sphere. In this type of scam, the scammers will try to get your username, password by fooling you. Most of the case, the attackers use two methods to achieve this:

  • Punycode
  • Fake Airdrops
  1. Pump & Dump Groups:

    Pump & Dump groups on Telegram, Slack, and IRC are not somewhat new in the old-style market also so why the crypto market will be left behind in this. You will find lots of groups with 40,000 to 100,000 members if you search on telegram. You have to know what they do in such groups. They don`t chit-chat in such groups. These groups are tools that help to manipulate the prices of altcoins that have low market caps.

    By using this way, the people who first get the advantage and who are a bit late suffer from the plummeting in just a matter of minutes. In today`s market, there are lots of tools available to monitor the volume increase in particular crypto which helps in identifying such schemes. Many people make money by using this technique but we suggest you stay away from it too.

  2. Impersonators:

    Impersonators are considered one of the most sophisticated forms of scam. This kind of crypto scam is related to your Facebook and Twitter accounts. Scammers hack your Facebook and Twitter accounts in order to impersonate the actual profit. In this scam, you will find lots of impersonators on Twitter which are never true. In addition, scammers have started acting as crypto exchange support staff in order to scam people of their crypto funds.

Final Word:

In any industry, scam is not a new thing and crypto being a decentralized and, also open-source concept. The best way to not get scammed is to trust legit sources of information and self-education of depositors through reliable sources. What you need to do is to get hold of a good fund recovery group if you have lost any kind of money in any type of crypto scam. Yuan Pay Group always helps you to protect yourself from such kinds of scams. Hopefully, this blog will be more beneficial for you regarding crypto scams. Stay connected with us if you want to know more about these kinds of scams. Thanks!

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