Current surge in cryptocurrency scams; old and new ways

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There has been an alarming rise in the rate of cryptocurrency scams.聽In 2019, over $4 bn total losseswere recorded against cryptocurrency scams. Upon the introduction of cryptocurrency and blockchain technology, early adopters were thrilled at the unique features ofdecentralization and resistance to censorship.Even in developed countries, top cryptocurrencies like bitcoin and ether are not regulated. However, for some people, these features are no longer looking as rosy as before.

Cryptocurrency scams have existed for as far back as the boom of bitcoin. However, every day, the rate increases, and new methods of cryptocurrency scams are being uncovered. Somewell-known methods of cryptocurrency scamsinclude;

聽 聽聽Fraudulent cryptocurrency wallets; Coins can be stolen right from fraudulent crypto wallets, either from an outside party or a member of the network. There have been reports of app cloning and fraudulent hacking that cost people their hard-earned money. Unregulated/Unregistered brokers are the leading source of fake cryptocurrency wallets.

聽聽聽聽聽聽聽Fraudulent or fake ICOs- Many Initial Coin Offerings are not truthful in their dealings. They seek to siphon money from na茂ve investors. In fact, more than 80% of ICOs do not pull through as promised. This has contributed to the majority of cryptocurrency scams.

聽聽聽聽聽聽Cryptocurrency Ponzi schemes- Ponzi schemes typically require referrals and the influx of new investors to keep a promised lucrative cycle running. Just as they tend to fail in other settings, cryptocurrency is not any different. They

聽聽聽聽聽聽聽Impersonation- This is a common method of cryptocurrency scams. Impersonation can be done through many platforms. It may be through a fake email, social media app cloning, and so on. A reputable trader or an untraceable/non-existing identity may also be used.

聽聽聽聽聽聽聽Social media groups- There are numerous groups on Facebook, WhatsApp, and so on, anchored by dubious individuals. They promote fraudulent cryptocurrency brokers and exchanges and lure unsuspecting users. They may scam outrightly without any external platform. These groups grow thousands of followers/members, thanks to the booming social media market.

In recent times,new methods of cryptocurrency scamsare being employed. One common trend is usingcelebrity endorsements and reputable advertising agenciesto gain the trust of people. Sometimes, the societal figures may not be aware of such infringements. However, such approaches do not last long before they are busted. Recent victims of scam celebrity endorsements in the US include Deborah Meaden and Martin Lewis.

Another method of cryptocurrency scams is the fraudulent claims ofLibra purchases, sales, and trading.Several Facebook groups with thousands of members make full claims, backed with designed payment platforms, of selling and trading Libra. Libra is Facebook鈥檚 first cryptocurrency, which is not even fully launched yet. They prey on the trust people have on Facebook, being the most powerful social media company. The fact that scammers can pull off such schemes, through the legitimately concerned platform, shows the extent of technological bypass and corny wittiness some scammers display.

Cryptocurrency, being unregulated, isnearly impossible to trace and be accounted for.The source and legitimacy of many cryptocurrency wallets cannot be verified. These also make funds gotten from victims to be too difficult to trace and retrieve. Finally, with the rise in cryptocurrency scams, developmental researches are going on to address these loopholes while still maintaining the functional integrity of blockchain technology.

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