Cryptocurrency scam method and ways to protect yourself from it
Cryptocurrencies and blockchain technology have gained popularity in recent years, and with that, scammers and fraudsters have attempted to take advantage of unsuspecting individuals. According to the blockchain analytics firm’s report, cryptocurrency hackers stole $3.8 billion in 2022. The number is expected to rise from here with the advanced techniques surrounding crypto.
One of the ways popular for exploitation lies in hosting fake cryptocurrency exchange platforms and tokens. This article discusses one of the cryptocurrency scam methods and ways to protect yourself.
Methods of crypto scams
Today we’ll discuss one of the known methods. The whole idea of the campaign is to gain financial profits.
This is achieved by luring customers to enter their sensitive information, for example harvesting credentials leading to account takeovers. Alternatively, this is achieved by setting up a whole new token, gaining money by advertising the token on a mass scale, and draining all the money from the contract, leading to a fraud campaign.
Step 1: Cybercriminals develop a scheme and gather a team to work on a campaign. This campaign can be either about developing a new crypto exchange platform or introducing a new token in the market. All team members are recruited for the management and development capabilities.
The team ensures the chart is updated and transactions are acquired regularly.
Step 2: Fake domains are created according to the campaign. It can be either about:
a. Introducing a new coin- for example, ‘HostCoin’, ‘FeatureCoin’, or similar to existing coins. These domains will have reputed and commonly used TLDs to establish legitimacy.
b. Fake domains are created for existing crypto exchanges having different TLDs or slightly modified URLs. For example, for ‘cryptoexchangeplatform.com’, criminals can be ‘cryptoexchangeplatform-login.com’ or ‘cryptoexchangeplatform-wallet-topup.com’.
Step 3: Various ‘pump and dump’ advertising methods via Google are done to establish legitimacy. Fake testimonials are set up to lure users into believing that they are putting their money into a valid offering.
Identifying a fake cryptocurrency platform
- Crypto scam tracker is a website that checks all domains tagged under various categories, such as pig butchering, advanced fees, or fraudulent exchanges.
- Stay away from websites that alert you as ‘Deceptive site ahead’.
- The top malicious websites come from domains with a TLD (top-level domain) such as .me, .live, .app, .top, .biz, .online, .website, etc. Beware of clicking on such websites.
4. Check the website/platform’s reputation and track record of consumer complaints. Websites should constantly check for transparency and authenticity.
5. Look for information such as company registration, team members’ credentials, partnerships, and user reviews.
Concluding words
Users must exercise caution and conduct thorough research before engaging with any cryptocurrency platform or investment opportunity. Remember, engaging with legitimate and regulated cryptocurrency platforms is essential to securely safeguard your investments and participate in the digital currency ecosystem. Hope you like our article on cryptocurrency scam methods and ways to protect yourself.
