5 Common Cryptocurrency Scams in 2022
The use of technology has altered nearly all fields of life, and the latest trends in cryptocurrency have incredible potential to change the way we use money. Blockchain and cryptocurrency have hit the internet with a bang, and the market cap has increased sharply to $1.76 trillion during the last couple of years. However, the excessive use of technology comes with greater safety concerns. The federal trade commission reported a loss of $1.1 billion in crypto scams during the last year. People continue to fall victim to crypto scams every day. Before getting started with crypto staking, here are five crypto scams to watch out for in 2022:
1. Rug Pulls
Investment scammers are everywhere in the crypto realm. Rug pulls are crypto scams where investment scammers collect cryptocurrency for a new project and suddenly disappear without notice. Investment scammers are mostly crypto project developers who generate a fake market appeal for investors and trick people into buying their tokens for investment. When the token or cryptocurrency increases in value, the scammers sell all the tokens at once, which causes the token value to drop sharply and sometimes reach zero.
2. Pump and Dump Scams
In a pump-and-dump scam, scammers will acquire cryptocurrency or non-fungible tokens and increase their price artificially by attracting investors and tricking them into buying. When the purchase of a particular token or cryptocurrency increases, the market price also takes off, and scammers take this opportunity to sell all the currency at once and make huge profits. This causes the cryptocurrency’s value to nose dive, leaving the investors empty-handed.
3. Airdrop Scams
In an airdrop scam, a crypto project distributes free tokens or coins to investors. Airdrop is a common promotional technique to grow the project’s community and create awareness. However, scammers deceive people by making it look like a promotional event and trick people into giving their private keys to their cryptocurrency.
4. Dusting Scams
Dusting is another common crypto scam wherein a scammer sends a small amount of cryptocurrency to a wallet to acquire personal information. The scammers will then examine the wallets that use these tokens for buying or selling. This way, scammers can easily determine the identities of the wallet owners and blackmail them into handing over their private keys.
5. Social Media Giveaway Scams
On social media, there are several fake posts advertising bitcoin giveaways. When someone clicks on the giveaway, they are redirected to a phony site that requests verification to collect the bitcoin. Making a payment to establish the account’s legitimacy is part of the verification procedure on these websites. The website may also trick you into clicking malicious links that may result in a security breach of your crypto wallet.
Stay Informed about Latest News on Cryptocurrency
People want to learn how to make money from cryptocurrency as a starter and how to stake in cryptocurrency. Although cryptocurrency is a high-risk and high-return investment opportunity, you must be extra cautious about internet scams.
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