What Is A Cryptocurrency Scam?

A cryptocurrency scam is a common technique for scammers to lure people into sending money. In these scams, a fraudster wants the target to make a payment or send money with Bitcoin or another kind of cryptocurrency. Once the target does that, they lose their money, and there’s typically no way to get it back.

What Are the Types of Cryptocurrency Scams?

Cryptocurrency fraud can come in many forms, including:

• Financial crimes such as bribery, money laundering, and tax avoidance.
• Pump and dump schemes where stock owners increase the prices before selling their
  stock at an artificial peak.
• Market manipulation where scammers try to manipulate the cryptocurrency market using churning, front-running, spoofing, etc.
• Traditional theft where criminals hack investors’ crypto wallets and steal their currency, establish fake crypto exchanges to steal customers’ money.

How to Prevent Cryptocurrency Scam?

Here are some ways to secure yourself from a cryptocurrency scam.

• Research the background of the virtual currency dealer before you buy. You can use the online background check tool provided by the CFTC.
• Do not share the codes that allow you to access your virtual currency with anyone.
• Thoroughly research any digital wallet provider or online currency platform before wiring money, providing credit card details, or sharing sensitive personal information.
• Meticulously read and review any agreement or contract with a digital wallet provider.