According to time.com, a recorded $14 billion was stolen by crypto scammers in 2021 alone. These alarming rates have called for security reevaluations on the blockchain space.
While a great deal of noise is being made in the crypto space right now, it is important to drown out the noise and do your research, to protect the assets in your crypto wallet from scammers.
List of Common Crypto Scams And How to Avoid Them
Liquidity “Rug-pull” Scams
This type of scam is usually targeted towards investors. Often, developers of a particular project abandon the project after people have invested money during the ICO/presale. They list the coins on decentralized exchanges, get enough people to partake in the presale by advertising on social media, and use bots to keep their communities engaged. After this is done, they withdraw all the money from the exchange, scrub their sites, and delete their social media accounts. One good example is the Squid Game token that was just an elaborate scam, whose developers made away with over $3 million.
To avoid these types of scams, get more information about the project by reading their white paper, reading the info on the website, knowing who the developers are, and verifying on social media (this is important because there was a scam team that once put a catfish picture of Ryan Gosling on their developers’ team list).
This is done by scammers impersonating popular exchange sites and sending unverified links, which usually contain malware. Once you click on these links, it activates the malware which could be used to wipe away your entire assets on your wallet, or sometimes your phone data too.
The best way to avoid this type of scam is by not clicking on a site from any source that is not verified. Also, do not open unverified links on your DApps, because it’s the fastest way for the malware to gain access to your wallet and wipe all your assets away. An additional method is safeguarding your assets with a hardware wallet like Safepal.
Note that admins from popular exchange sites will never send you a link. You will receive an in-site or app notification first.
Scammers usually impersonate celebrities and ask them to send some tokens to a wallet to get x2 of it.
Another elaborate method that is also used is engaging users in airdrops and when the coin is listed; you are asked to pay an amount of money to claim the airdrop and typically, they list the coin for a large amount, then tell you to pay a certain amount of money to claim the airdrop.
To avoid giveaway scams, do not participate in any giveaways that require you to pay any sum of money to any wallet.
This is usually done by air-dropping a small amount of a foreign coin to a wallet or group of wallets. A lot of people might want to cash out the amount, and by doing so, you leave your accounts open to the hackers, who then proceed to wipe your account of all assets.
To avoid being a victim of this type of scam, do not interact with random airdrops unless verified. If you see a random airdrop in your wallet, avoid it. Create a new wallet and transfer all your assets there instead, or you delete the airdrop.
Crypto Investment/Money doubling schemes
This type of scam is targeted towards investors, and it’s often done by asking them to send some tokens to the scammer with the ‘promise’ that your funds will be doubled upon sending back to you. This is a huge lie, and those scammers will cart away with your tokens!
To avoid this type of scam, avoid money doubling schemes and unverified investment schemes. If you want to stake coins and earn, use verified staking pools instead.
Crypto scams are becoming increasingly common, and while long-term solutions to this problem haven’t been developed on the blockchain, you can protect yourself from losing your crypto assets by being aware of these types of scams and taking steps to avoid being scammed.