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Wednesday, August 17, 2022

Is It Possible To Get Scammed Through Cryptocurrency?

Cryptocurrency crime set a new high in 2021, according to a recent analysis, with scammers stealing $14 billion worth of cryptocurrency. According to the Federal Trade Commission (FTC), around 7,000 consumers in the United States lost upwards of $80 million in crypto scams between October 2020 and March 2021, based on scam reports filed in the United States. That’s an increase from the 570 bitcoin investment scams and $7.5 million in losses experienced in the same months the previous year. Here are several scams to keep an eye out for:

Requiring Crypto-Only Transactions

It’s most likely a scam if a seemingly trustworthy person or retail establishment declares they don’t accept any currency other than Bitcoin or Ethereum. Because bitcoin and other coins are such a new asset, analysts fear that respected institutions will refuse to accept crypto unless it is accompanied by the acceptance of US dollars.

 

Anyone demanding Bitcoin as payment may be trying to stockpile it and profit from its rising value. Unlike banks, blockchain does not have typical know-your-customer (KYC) procedures. Customers will be able to access their wallets without having to produce valid identification, a Social Security number, or their address and contact information. Despite the fact that blockchain is available to the public and provides permanent, open-access records, it is still a work in progress. Companies like The Claimers step in to save you from frauds and recover your funds.

Fake or Anonymous Identities

According to Jonathan Padilla, former PayPal head of blockchain strategy and CEO and co-founder of Snickerdoodle Labs, a California-based blockchain data security company that’s looking to use blockchain to give consumers ownership of their cookies and browsing data, the lack of KYC protocols on the blockchain is a major question mark for its widespread use. “There are really no controls in place with a decentralized platform to indicate who is a good actor and who is a terrible actor,” Padilla argues. “It’s just a case of buyer beware.”

 

A driver’s license, a Social Security number, or an address and phone number are all acceptable forms of identity. Despite the fact that blockchain is accessible to the public, anybody can deal with it anonymously, making it easier to defraud you, take your money, and flee, however this can be avoided if you have The Claimers working beside you in your dealings.

Games and Digital Collectibles

As we saw with the “Squid Game” hoax, sophisticated coders now have the ability to create new games and entire imagined worlds on the blockchain. And to do so before the next Netflix sensation explodes. Obtaining a form of newly minted coin or token for a game is an easy way to deceive eager blockchain newcomers. The initial con artists can sell all of their assets and vanish in a maneuver known as a “rug pull. Unlike bank accounts for federally controlled currency, there is no fraud protection or FDIC insurance on the blockchain. When your money is stolen on the blockchain, the only way to get it back is for the recipient to pay you directly. On a decentralized exchange, this is highly unlikely. Despite the fact that larger crypto exchanges have more robust fraud protections than smaller exchanges, investors are still in danger of losing their money. 

 

The creation of new forms of cryptocurrency is ongoing, and when new currencies are published onto the blockchain, it’s known as an initial coin offering (ICO) (ICO). ICOs, on the other hand, can be utilized to commit fraud. A company or an individual may advertise a once-in-a-lifetime opportunity to invest in a new type of cryptocurrency with guaranteed returns of 1,000 percent. They may next try to persuade you to deposit a huge number of new coins into a compromised digital wallet or to “pump and dump,” which involves buying a coin and selling it when the price skyrockets.

Scams 

On dating apps, there are a plethora of cryptocurrency scams. According to the FTC, romance scams account for about 20% of all money lost. Long-distance connections are used in scams like this, in which one side urges and persuades the other to buy or provide money for a new cryptocurrency that is really simply a technique to defraud people.

Scams Including Phishing

It is a scam that is as old as the internet, but there are some additional consequences with cryptocurrency. Scammers send emails to lure recipients into clicking links and inputting personal information, like crypto wallet key information. You only get one private key to your blockchain wallets, unlike most passwords and usernames. This is part of blockchain’s decentralized nature, which ensures that no single entity has authority over your data, but it can be inconvenient if you need to alter your key.

 

TheClaimers is a firm that can help you recover your lost funds; make sure to contact them as soon as possible if you’ve been scammed!

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