Cryptocurrencies are often hailed as the Brave New World of money. However, they can also resemble the Wild Wild West. Fans of Bitcoin, Ethereum, and other digital currencies tout these money alternatives because they are not regulated by governments and provide freedom from bureaucracy and control from the top. However, they also lack oversight, and as a result, Crypto scams abound.
Is Bitcoin a Scam?
The problems with bitcoin and other cryptocurrencies can sometimes be overstated to the extent that many people associate the mention of cryptocurrency with “scam.” There are many actual uses for cryptocurrency, from transactions from reputable merchants in bitcoin to legitimate brokers that provide cryptocurrency investing with stable returns.
However, the fact that cryptocurrencies are not regulated means that they are not subject to regulations that keep traders, investors, and holders of currency safe, like federally insured deposits and restrictions against some speculation types. The one protection may be retrieving funds from services like Trader Defense Advisory after the fact.
Therefore, those who want to benefit from cryptocurrency’s freedom and convenience must do their due diligence and be aware of risks such as Crypto scams. It is essential to learn as much as possible about how cryptocurrency works and blockchain technology so you can detect fraud more quickly.
Types of Crypto Scams
There are many types of Crypto scams, from sophisticated schemes using platforms to outright phishing and taking information. These are some of the most common types of cryptocurrency fraud:
Virtual wallets are used to store coins. However, in crypto scams, fake wallets are used to steal coins from cryptocurrency holders. The customer will think that some outside hacker got a hold of their coins when the culprit could be the one who sold them the wallet in the first place.
ICOs are to cryptocurrency what IPOs are to companies. ICO stands for Initial Coin Offering. There are new types of cryptocurrencies emerging all of the time, and just as companies need seed money, ICOs require funding from investors. However, some of these ICOs are fake and the new coin will never be launched. The ICO “founders” simply disappear behind fake identities.
DeFi Rug Pulls
DeFi stands for Decentralized Finance. This represents more freedom for cryptocurrency holders, since it promises to remove gatekeepers from transactions, but this makes users more vulnerable to crypto scams.
These scammers steal money through what is commonly called a “rug pull” or contracts that aim to protect money by locking it in for a while. Unscrupulous parties take advantage of this control to steal the money from customers and then disappear without a trace.
Social Media Scams
Social media brings people from disparate walks of life together. It can also put people off their guard in virtual social groups and can make it easier for crypto scam artists to solicit bitcoin from other users or hack accounts.
What If You Have Lost Money in a Crypto Scam
The anonymous nature of cryptocurrency may make it seem as if catching perpetrators of crypto scams are impossible, but this isn’t true. Users of cryptocurrency are not as anonymous as they like to believe and experts are often able to identify them and track them down.
If you want to recover your funds from a Crypto Scam, enlist the aid of a third party such as Trader Defense Advisory. The combination of expertise, data collection, and advanced tracking methods can help victims of Crypto scams retrieve their funds.