How to Avoid a Cryptocurrency scam

 

Cryptocurrency scams are a type of fraud that uses virtual assets like Bitcoin to steal money from unsuspecting people. They can be perpetrated by criminals in a variety of ways, from fake apps that appear on Google Play and the App Store to phishing emails or direct messages on social media. Criminals can also use stolen credit card numbers or personal information to withdraw money from a person's cryptocurrency wallet. They can then sell the cryptocurrencies for cash or use them to commit other frauds, such as identity theft.

A common way for cybercriminals to target investors is by hyping up specific coins or tokens. They may do this via email blasts, social media and chatbots. The idea is to drive up demand for a coin or token, which they then dump — driving its price down and stealing money from victims. This is called a "pump and dump" scheme, and it's a particularly risky way to invest in crypto.

Investors can also fall victim to a spoofing attack in which a scammer impersonates a trusted figure, such as a celebrity or investment adviser. They can then convince people to transfer funds into a fraudulent account or crypto platform under the false pretense that the investment will increase in value. The criminals can then disappear with the stolen money.

Another popular method for fraudsters to Cryptocurrency scam steal from crypto enthusiasts is through a phishing attack in which they trick people into visiting fake crypto websites that look real but contain malware. Criminals can then gain access to a person's cryptocurrency wallet and steal their keys or hijack their computer to execute a transaction that drains their balance.

The FTC reports that more than 46,000 people reported losing $1 billion in crypto during the first three months of 2021. Those losses can be devastating for people who've been saving for retirement or paying off student loans, or those who invested in crypto with the hope of making big returns. It's important for retail investors to be aware of these elevated risks and implement heightened safeguards to help protect their assets.

Another way that crooks can steal crypto is by posing as legitimate businesses and offering bogus employment opportunities. Criminals can do this by listing fake jobs on job sites that require an upfront fee in cryptocurrency or by claiming to have private information, such as passwords or account details, and threatening to expose them unless the recipient pays a fee in crypto.

Anyone who receives a message from someone who asks for crypto in exchange for work should be suspicious and report it. Never send or accept crypto from an unknown source, and keep your private keys separate from your wallet in cold storage. It's also a good idea to avoid clickable links in unsolicited emails or text messages and stay away from crypto investment opportunities that require you to pay an upfront fee or demand cryptocurrency payments. Always thoroughly vet any investments involving crypto and consider talking to your Morgan Stanley financial advisor before taking action.