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Cryptocurrency Scams: Top Threats and How to Protect Yourself

As the popularity of the cryptocurrency market increases, so does the number of criminals interested in it. With this, the security firm ESET believes it is important for the population to be aware of how scams are applied and also how they can be prevented.

Between October 2020 and May 2021, nearly $80 million (€71 million) was lost in the United States as a result of thousands of cryptocurrency-related scams, according to FTC research. With the apparent profit of these scams, it is possible that in 2022 they will occur even more frequently.

According to ESET, in 2020 and 2021, a wide variety of cryptocurrency scams were detected. Among the main ones, the company cites the following:

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  • Pyramid Schemes: This is a type of investment scam where victims are tricked into investing in a non-existent project or “get-rich-quick scheme” that actually does nothing but line the scammer’s pocket. Cryptocurrency is ideal for this as scammers are always creating “cutting edge” technologies that are not well specified to attract investors and generate greater virtual profits. Falsifying data is easy when the money is virtual;
  • pump and dump: Scammers encourage investors to buy crypto assets in little-known cryptocurrency projects based on false information. The price of the assets subsequently rises and the scammer sells his own shares, making a considerable profit and leaving the victim with worthless shares.
  • Fake celebrity endorsements: Scammers hijack celebrity social media accounts or create fake accounts, encouraging followers to invest in fake schemes like the ones above. In one case, around $2 million was lost to scammers who even used Elon Musk’s name in a Bitcoin address, to make the scam more trustworthy.
  • fake emails: Scammers send emails or post messages on social media promising access to virtual money stored in a exchange cryptocurrencies, which will be made available for a fee. Neither the funds nor the platform exist;
  • Fake apps: Cybercriminals spoof legitimate cryptocurrency programs and upload them to app stores. If installed, it can steal personal and financial data or plant malware on the device. Others can trick users into paying for non-existent services or try to steal logins from a cryptocurrency wallet.

How to protect yourself from cryptocurrency scams

To avoid becoming a victim of cryptocurrency scams, ESET recommends the following steps:

  • Never provide personal data to an entity that makes contact to offer something that was not requested, whether by email, text message, social networks, etc;
  • If something sounds too good to be true, it usually is. Treat any investment scheme with suspicion;
  • Enable two-step authentication (2FA) on all cryptocurrency accounts you have;
  • Discard any investment “opportunity” that requires an upfront payment;
  • Never download apps from unofficial stores.

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