Two biggest cryptocurrency scams detailed — here’s how to avoid | #daitngscams | #lovescams

A recent example is SQUID, a cryptocurrency coin named after the TV drama “Squid Game.” After the new coin skyrocketed in price, its creators simply disappeared with the money.

A variation on this scam involves enticing investors to be among the first to purchase a new cryptocurrency – a process called an initial coin offering – with promises of large and fast returns. But unlike the SQUID offering, no coins are ever issued, and would-be investors are left empty-handed. In fact, many initial coin offerings turn out to be fake, but because of the complex and evolving nature of these new coins and technologies, even educated, experienced investors can be fooled.

As with all risky financial ventures, anyone considering buying cryptocurrency should follow the age-old advice to thoroughly research the offer. Who is behind the offering? What is known about the company? Is a white paper, an informational document issued by a company outlining the features of its product, available?

In the SQUID case, one warning sign was that investors who had bought the coins were unable to sell them. The SQUID website was also riddled with grammatical errors, which is typical of many scams.

Shakedown payments

The second basic type of cryptocurrency scam simply uses cryptocurrency as the payment method to transfer funds from victims to scammers. All ages and demographics can be targets. These include ransomware cases, romance scams, computer repair scams, sextortion cases, Ponzi schemes, and the like. Scammers are simply capitalizing on the anonymous nature of cryptocurrencies to hide their identities and evade consequences.

In the recent past, scammers would request wire transfers or gift cards to receive money – as they are irreversible, anonymous, and untraceable. However, such payment methods do require potential victims to leave their homes, where they might encounter a third party who can intervene and possibly stop them. Crypto, on the other hand, can be purchased from anywhere at any time.

Indeed, Bitcoin has become the most common currency requested in ransomware cases, being demanded in close to 98% of cases. According to the U.K. National Cyber Security Center, sextortion scams often request individuals to pay in Bitcoin and other cryptocurrencies. Romance scams targeting younger adults are increasingly using cryptocurrency as part of the scam.