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Just a few days ago, the cryptocurrency market cap topped at $400 billion. This marks a growth of more than 90 percent since the year began. A reminder of the 2017 rally during which bitcoin price touched $20,000.
The growing crypto market valuation and the ongoing coronavirus pandemic has also given rise to scores of cryptocurrency scams.
Add to that the irreversibility of a cryptocurrency transaction. You should verify each and every possible detail regarding the receiver before initiating a crypto transfer.
Knowing the most common type of cryptocurrency scams and ways to deal with them will come in handy.
Social Media Cryptocurrency Scams
While going through conversations about cryptocurrencies on social media sites, you must have come across reputed firms and influencers doing crypto-asset giveaways.
They ask for a few digital currencies (BTC, ETH, XRP, BNB, WRX, etc) with promises of returning 10 or 20 times the amount that you send.
You will also find bots and fake profiles replying on a giveaway post soon after they go out. Stay away from such unscrupulous schemes that purely intend to steal your crypto assets.
They are too good to be true. Genuine companies and individuals will never ask for your money on social media.
Pump And Dump Groups
New cryptocurrency traders and investors get scammed by market movements orchestrated by pump and dump groups.
These scammers buy a particular cryptocurrency en masse to push prices up exponentially. When a sufficient number of ignorant investors buy during the rally, they dump their holdings on the market, cashing out with huge profits.
Pump and dump groups typically target cryptocurrencies that don’t have a major market presence, and operate through Telegram and Slack groups.
You should keep on eye on the market activity of the cryptocurrency that you have invested your funds in. Never make buy and sell calls in response to rapid price action.
The crypto market is volatile but on careful observation, some price movements just stand out and appear completely manipulated.
Also, whenever you get added to one of these groups on Telegram/Slack, report them as spam and exit instantly.
Fake Cryptocurrency Apps
Malicious actors work in more ways than one. In a widely prevalent cryptocurrency scam, users end up downloading crypto applications that are not original and mimic real firms.
Hackers who design such apps also make them look legitimate through fake positive reviews and ratings. Users who download such applications (mostly wallet and exchange apps) end up transferring funds to the hackers.
Always download applications from the official website (after checking the ‘https’ extension before the web address, or through links shared by a trusted source).
To download the WazirX only use the below mentioned links:
Android App – WazirX – Buy Sell Bitcoin & Other Cryptocurrencies
iOS App – WazirX
Cryptojacking Malware
Hackers just don’t stop at stealing crypto assets through spurious applications. Sometimes they deploy malware on computers that secretly start mining one or more cryptocurrencies utilizing the device’s RAM/processing power. This is cryptojacking.
These malwares apart from mining also latch onto an available crypto wallet to drain all available funds.
As a cryptocurrency trader/investor, you should exercise extreme caution in your online activity. Double-check the address of the website that you are visiting, and often click on the small lock-shaped icon on the address to ‘view site information’
Also, do this when you visit the WazirX India website for buying bitcoin or any other cryptocurrency. Only upon seeing the ‘Connection is secure’ proceed with all your crypto trades.
Phishing Scams
Quite a lot of times, cryptocurrency scammers impersonate a person or company to extract personal data through phishing.
You may probably receive email messages that mention something that’s wrong with your crypto exchange account and will have a follow-up link to solve the problem.
That link will redirect to a fake website – similar to the original one – that will prompt you to log in. This way, the attacker will steal your credentials, and possibly your cryptocurrencies.
We at WaziX will never ask for your username, password, or any other sensitive account information.
If you receive a potentially scammy communication, reach out to us through our newly launched live chat support feature or email.
Additional Pointers To Keep Your Crypto Account Safe
We do everything we can to keep your crypto funds safe, but here are a few things that we recommend for you:
- Create strong passwords for your account(s). This is the most important step. Create strong passwords that include numbers, characters, capital letters, and symbols.
- Do NOT share your passwords, do not share your OTPs and do not save them in your email accounts.
- Check the official URL and the lock symbol while accessing the exchange website.
- Don’t fall for scammers in Telegram groups or any other website. Anyone asking for funds, passwords, or OTP online is probably a scammer.
- Never share your private keys or account information on mail, chat, or any social media sites.
- Use 2-factor authentication (2FA)
Using 2-Factor Authentication is probably the most important thing to do. If you haven’t enabled 2FA, your crypto is at risk.
Frequently Asked Questions
Which Cryptocurrency Is Best To Invest In 2021?
Many altcoins are flourishing to invest in. Some cryptocurrencies with great potential are Ether, Ripple, Tron, and more. Investors are trying to diversify their portfolios and are flocking to the leading cryptocurrencies. Many growing businesses are already accepting cryptocurrency as acceptable payment methods.
Who Invented Cryptocurrency?
Satoshi Nakamoto invented cryptocurrencies and the technology that makes them function in 2009. The presumed pseudonymous individual or persons who invented Bitcoin used this identity. In addition, Nakamoto created the first blockchain database. Even though many people have claimed to be Satoshi Nakamoto, the person's identity remains unknown.
Is Ethereum Safe To Invest?
The Bitcoin market is unquestionably more volatile than the stock market. This may not be the market for you if you are incredibly risk-averse. Ethereum, on the other hand, may be a terrific investment for you if you're a diamond-handed investor who won't lose sight of short-term losses. Ethereum is a relatively safe investment as it is also based on blockchain.
Is Crypto Legal In India?
Cryptocurrencies are legal in India, and anyone can purchase, sell, and exchange them. It is currently uncontrolled, as India lacks a regulatory structure to oversee its operations. Per the Ministry of Corporate Affairs, companies must now record their crypto trading/investments within the financial year. In cases where a person receiving the gains is an Indian tax resident, or the cryptocurrency is regarded as domiciled in India, cryptocurrency transactions have been taxable in India
Is Pi Cryptocurrency Safe?
Pi Network captured the crypto community’s interest even before it officially debuted. Its innovative mobile mining approach and user-friendly design simplify crypto adoption for a broader audience. Some users see this as a chance to get engaged in the crypto from the beginning and profit in the future, similar to how early Bitcoin adopters made huge profits by mining and keeping the coin. Other users have compared Pi to a worthless multi-level marketing (MLM) scheme.
Is Cryptocurrency Legal In India?
In India, cryptocurrencies are legal; anyone can purchase, sell, and trade cryptocurrencies. They are currently unregulated; India does not have a regulatory framework in place to regulate its functioning. According to the Ministry of Corporate Affairs (MCA), companies must now declare their crypto trading/investments during the financial year, according to the Ministry of Corporate Affairs (MCA). Cryptocurrency transactions have been taxable in India when people receiving such gains are Indian tax residents or where the crypto is considered to be domiciled in India
Is Mining Cryptocurrency Legal?
Cryptocurrency mining can be time-consuming, expensive, and sporadically profitable. Mining has an appeal for many cryptocurrency enthusiasts as miners are paid directly with crypto tokens for their efforts. The legality of cryptocurrency mining is dependent on where you live. In India, there is no restriction on crypto mining.
Are Cryptocurrencies Legal In India?
In India, cryptocurrency is legal, and anyone can buy, sell, and trade it. Because India lacks a regulatory system to regulate its operations, it is presently uncontrolled. According to the Ministry of Corporate Affairs, companies must now document their crypto trading/investments inside the financial year.
What Is The Meaning Of Crypto?
A cryptocurrency is a digital currency that is secured by the process of cryptography, making counterfeiting and double-spending almost impossible to happen. Blockchain technology is used to produce cryptocurrencies ( a distributed ledger enforced by a distributed network of computers). Cryptocurrencies are distinct in that a centralized authority does not issue them.
What Is The Safest Cryptocurrency To Invest In?
Bitcoin has had the highest market capitalization, has been around the longest, has the most experienced development team, and has enormous network impact and brand recognition. As a result, while trading cryptocurrencies, the rate of return on Bitcoin is commonly used as a benchmark. However, the risks associated with cryptocurrencies remain, and the safest cryptocurrency for you depends on your analysis.
Disclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn't represent any investment advice or WazirX's official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.
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