The most common crypto scams don’t use technology. How to avoid them?
Crypto

The most common crypto scams don’t use technology. How to avoid them?

By Giorgi Mikhelidze - 16 Sep 2019

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It sometimes seems redundant to make articles like these trying to explain scams to people as they continue to fall for them. They either don’t read enough material online or are just too easily swayed by the tactics used by scammers.

Cryptocurrencies, from the moment of their shoot to fame have become somewhat of a new tool for scammers to defraud their victims of their hard-earned money. In the past, scams usually looked like call centers trying to convince people they either had unpaid taxes, loan payments or various other lies to somehow make them cough up.

However, crypto scammers had to find a completely different way to somehow legitimise themselves in the eyes of both experienced and inexperienced traders. One such method was to use the faces of celebrities on their promotions on social media such as Facebook or even Instagram at times.

Completely new pages would post a picture or text, saying how they are being endorsed by popular people. International scammers would go with big names such as Bill Gates or Jeff Bezos, while small-time scammers would only choose celebrities relevant to the country they were trying to scam.

How to avoid crypto scams?

People who have heard about the risks of cryptocurrencies and seen many lose most of their life savings due to poor investments or risk management, believe that the whole technology itself is designed to defraud people of their money.

However, once they see a familiar face, a person who is already successful, achieve profit on a platform they have no real connection to, it sparks some kind of trustworthiness towards the platform.

One such example is when a fraudulent company was campaigning in the United Arab Emirates by using the crown prince as its brand ambassador. They claimed that the prince was their long-time client and that generated millions with them.

Similar cases can be found in Australia where scammers were using a popular actor’s name as a source of trustworthiness. The actor was Hugh Jackman, who later called out the company Bitcoin Loophole for lying.

But no matter what a scammer may say, veteran traders will always identify them as something worth avoiding. Especially if they’re using a completely random celebrity as their brand ambassador.

The most common person to be used for these scams is actually Bill Gates because for some reason the creator of Windows is much more trustworthy than others.

What if it may be legit?

But there is always the possibility of the “scam” actually being legit. Which is also one of the factors that force people to try it out before judging by the cover.

One of the best ways to avoid any potential disaster by investing in them, it’s best to contact the relevant authorities of the country they are located in.

If you contact them directly, expect to be greeted by quite a convincing person who will tell you pretty much everything they want you to hear rather than what you want to hear. These people are “professionals” in convincing others to deposit with them, so try to have the least amount of contact with them as possible.

Once you contact the authorities though, make sure they confirm the registration of this company, their completed auditing process as well as a relevant license to conduct investment services.

If any of these are missing, then it’s best to avoid them completely.

As unfortunate as it may be, most cryptocurrencies are lost due to hack attacks on various cryptocurrency exchanges, but the investment scams are also a large part of the overall equation.

If your exchange gets hacked, you will at least have a guarantee of compensation from them. But if you deposit with a scam company, you can kiss those funds goodbye. This is the sole reason why it’s important to always keep your eyes peeled and avoid any shady looking promotion on social media.

Giorgi Mikhelidze
Giorgi Mikhelidze

Giorgi is a Georgia software developer with two years of experience trading on the financial markets. He is now working to spread the knowledge about the Blockchain in his country and share all of his findings and research to as many crypto enthusiasts as possible.

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