scam

By now, the cryptocurrency and blockchain sector has gained so much prominence that it has gained worldwide recognition. The reason why people adopted the technology is that it is completely different from the typical and traditional financial system.

The traditional financial system and its procedures reek of corporate control. They control the personal and financial information of their customers and come up with so many requirements. They are the ones who decide whether to facilitate a requestor or not.

The cryptocurrency sector has snatched this control from the corporates and given it back to people. Through cryptocurrencies, people are in control of their own personal and financial information and are answerable to no one but themselves.

All of this has been made possible through the decentralization offered by cryptocurrencies and blockchains. Although people are benefitting from the technology interacting in the right way, there are scammers/fraudsters using it for their own dark desires.

Such people use well-known strategies and tactics used in the general financial sector to lure people and then scam them. However, by staying cautious, vigilant, and well-informed, you can avoid being scammed for sure.

Pump and Dumps

In this scam, the scammers use all means necessary to promote a newly-launched digital asset or cryptocurrency. They use social media and different advertising tactics to create hype for these assets. This compels people to heavily invest in such cryptocurrencies and increase their demand, and value. However, the perpetrators keep the majority of the cryptocurrency tokens for themselves. Once the collected amount reaches the benchmark they’ve set, they dump (sell) all the tokens in their possession, never to be seen again. Then it is the innocent investors left with tokens that are almost or completely worthless.

Rug Pull Scams

In this category, the scammers initially use the same tactics as “pumps and dumps” to create huge demand for a cryptocurrency. As cryptocurrency grows popular, people invest heavily in it, and the scammers simply run away with the money people have invested in the project. Later, the project freezes, and people are not even able to access their assets let alone transfer them anywhere. Such scams also leave the cryptocurrency assets worthless.

Airdrops

Airdrops are more sophisticated and complex scams where the scammers add airdropping (advertised) cryptocurrency to your wallet for free. You get the coins if you interact with the platform and fulfill conditions you are required to fulfill to gain eligibility for the airdrop. You may think the cryptocurrency in your wallet is like any other asset but when you try selling it, turns out, it provides access to hackers to steal funds from your wallet. The hackers then steal all the funds from your own wallet leaving you with nothing.

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