What is a Scam?
Translated in English, “Scam” means fraud. A word used to refer to a person/organization that commits illegal acts to appropriate other people’s property.
When they saw the lucrative bait in the crypto market, the scammers began to act evil and became more and more sophisticated. Instead of doing too obvious scam projects, professional scammers will use more complicated techniques to be able to withdraw money from your wallet without your knowledge, by the time you realize it, it’s too late.
Analyze 3 characteristics to help identify Scam projects
Knowing exactly what a Scam project is will keep you awake and away from lurking threats once you join.
Also known as intentional influence, fake interference in property value. Often scammers will manipulate the market in order to increase their profit rate. Since then, the profit level is also faster and higher.
Some of the illegal business activities in this case include:
Create the illusion of momentum by placing fake buy/sell orders. However, these orders will be canceled before being executed. Scammers often use fake accounts or Bots to make large transactions that impress other investors and assume that demand is trending up or down.
Only the act of executing trades is based on knowledge regarding future transactions. For example, a miner/node operator takes advantage of insider access to make profitable trades against price fluctuations.
Fraudulent trading activities of brokers with crypto accounts of both clients in order to generate additional % commission. In effect, asset management companies may receive a fee for managing crypto holdings. Bad brokers will abuse the commission-based payment structure to benefit uninformed customers.
The cryptocurrency market is still relatively new and not strictly regulated, creating opportunities for bad actors to manipulate.
If you are just starting to invest in crypto, it is best to trade on large, famous and reputable exchanges. Prioritize the selection of exchanges that have established internal control and security policies.
On the other hand, in order not to fall into the trap of the bad guys, investors should thoroughly research cryptocurrencies, brokers and exchanges before making any financial decisions.
There have been quite a few cases of individuals or groups of objects deploying a “Pump and dump” plan with the aim of increasing the price of the asset they are holding and selling at a “heavenly” price to make a profit.
To convince investors to buy, the conspirators spread false or misleading information through the media and social networks. These posts often contain additional appraisal content and promise future price increases.
When they see the potential, other investors will pour money in and push the price up. Whereas the conspirators will profit and make money fast, withdrawing troops early. To avoid falling into the trap of scammers, you should watch the movement of your cryptocurrency in the long term rather than the short term.
Traditional hacking and theft
The crypto market possesses many unique characteristics compared to other asset markets. However, investors are still not immune to scams and easily fall into the traps of bad guys similar to traditional scams. Typically, account is hacked or identity stolen to use for malicious purposes.
In order to conduct cryptocurrency trading, investors are required to own a cryptocurrency wallet. In the past, addresses were often public allowing funds to be deposited directly into the wallet. Similar to routing and bank account number for direct money transfer. However, then like the password of an online banking platform. Anyone with access to that password can easily control the amount inside the account.
You should not share your credit card number with strangers. Instead, keep personal information in a safe place. Because scammers can use this information to hack your account and withdraw your money.
Nowadays, bad guys have a lot of sophisticated tricks to get investors to reveal their personal information. Therefore, we need to be sober and should not reveal anything to anyone.
In addition, you should also be careful with the notifications sent to your Email. The scammer can act as a wallet provider or a cryptocurrency exchange. Attract you with attractive promotions or promise to give you huge profits if you act quickly.
To avoid falling for phishing emails, verify that the sender’s email address is valid or identifiable. Often bad actors will use addresses with common domain names with random characters.
Experience dodging Scam projects
Scams are evolving and becoming more sophisticated. To avoid losing money unjustly, you need to pocket some tips to detect these tricks early.
Absolute protection of personal accounts
You should sign up for a trusted crypto wallet before starting to participate in the crypto market. Hot wallets are often easy to hack. Famous investors recommend using cold wallets. In particular, you must always make sure to keep your private key and passphrase in the safest place.
Take enough time to research projects thoroughly
If a company suddenly pressures to invest quickly, there is a high chance that the company is intending to commit fraud.
Some scammers even offer bonuses, discounts and bargains to convince you. Instead of rushing to invest, take time to research the market before investing in any project.
Beware of investment opportunities on social media platforms
Be on the lookout for crypto investment opportunities posted on social media sites featuring celebrities. Because some bad guys take advantage of the image of influencers (often without their consent) as a concrete demonstration and make their investment more legitimate and trustworthy.
Staying away from Scam projects is what any investor wants when participating in the cryptocurrency market. However, reality is not so easy. Instead of being afraid of being taken advantage of by bad guys and taking money, please add a lot of knowledge about this field to master the market and the game!