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The digital gold rush is here. As more people attempt to make money from cryptocurrencies, criminals and con artists aren\u2019t far behind. Make sure you know how to recognise the biggest schemes that want to part you from your digital coins says Carey van Vlaanderen, CEO of ESET South Africa.<\/em><\/p>\n\n\n\n The world seems to have gone \u2018crypto-mad\u2019. Digital currencies like bitcoin, Monero, Ethereum, and even Dogecoin, are all over the internet. Their soaring value promises big wins for investors (if you\u2019re \u201cbuying the dip\u201d, that is). And the \u2018fortunes\u2019 to be made by mining for virtual money have echoes of gold rushes that formed the first mining towns in South Africa back in the 1800s. Or at least, that\u2019s what many, including a long list of scammers, will have you believe.<\/p>\n\n\n\n In reality, if you\u2019re interested in cryptocurrency today, you\u2019re quite possibly at a major risk for fraud. In many respects, in this new unregulated world, bad actors often have the upper hand. In 2021, South African-based Africrypt was reportedly<\/a> hacked, effectively wiping out a staggering R51 billion of investors\u2019 money. While the apparent hack made global headlines<\/a>, the founders of Africrypt vanished as international investigators scrambled to piece together what happened in what is now suspected to be a completely fraudulent cryptocurrency investment platform.<\/p>\n\n\n\n The good news is that normal rules of fraud prevention apply too. Everything you read online should be carefully scrutinized and fact-checked. Don\u2019t believe the hype, or buy into something that seems too good to be true, and you\u2019ll stand a great chance of staying safe.<\/p>\n\n\n\n Fraudsters are masters at using current events and buzzy trends to trick their victims. And they don\u2019t come much more \u201czeitgeist-y\u201d than cryptocurrency. Headlines and social media posts are partly to blame, creating a feedback loop that only adds to the hysteria over virtual currencies.<\/p>\n\n\n\n If you have virtual money safely stored in a cryptocurrency exchange, it may be at risk from hackers. On numerous occasions threat actors have successfully managed to extract funds from these businesses, sometimes making off with hundreds of millions. However, usually the breached companies will promise to recompense their blameless customers<\/a>. Unfortunately, there are no such assurances for the victims of crypto fraud. Fall for a scam and you may be out-of-pocket for a lot of money.<\/p>\n\n\n\n It pays to understand what these scams look like. Here are some of the most common:<\/p>\n\n\n\n Ponzi schemes:<\/em> <\/strong>This is a type of investment scam<\/a> where victims are tricked into investing in a non-existent company or a \u201cget rich quick scheme,\u201d which in fact is doing nothing but lining the pocket of the fraudster. Cryptocurrency is ideal for thisas fraudsters are always inventing new, unspecified \u2018cutting edge\u2019 technology to attract investors and generate larger virtual profits.Falsifying the data is easy when the currency is virtual anyway.<\/p>\n\n\n\n Pump and dump:<\/em> <\/strong>Scammers encourage investors<\/a> to buy shares in little-known cryptocurrency companies, based on false information. The share price subsequently rises and the fraudster sells their own shares, making a tidy profit and leaving the victim with worthless stocks or coins.<\/p>\n\n\n\n Fake celebrity endorsements:<\/em> Scammers hijack celebrity social media accounts<\/a> or create fake ones<\/a>, and encourage followers to invest in fake schemes like the ones above. In one ploy, some $2m was lost to scammers who even name-dropped Elon Musk into a Bitcoin address<\/a> in order to make the ruse more trustworthy.<\/p>\n\n\n\n Fake and copycat exchanges:<\/em> Fraudsters send emails or post social media messages promising access<\/a> to virtual cash stored in cryptocurrency exchanges. The only catch is the user must usually pay a small fee first. The exchange doesn\u2019t exist and their money is lost forever. Copycat sites offer what appears to be legitimate wallet services. Users are encouraged to download wallets which then install malware on the user\u2019s device. In these instances, iOS devices have been compromised where in the past the problem was limited to Android.<\/p>\n\n\n\nWhy are cryptocurrency scams on the rise?<\/strong><\/h2>\n\n\n\n
What are the most common cryptocurrency scams?<\/strong><\/h2>\n\n\n\n