Cryptocurrency scams in India: how to spot crypto scams, avoid and protect your money

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Despite regulatory uncertainties, the craze for crypto is growing rapidly in the country. As crypto-assets continue to gain the attention of investors around the world, they have also become a target for scammers looking to make easy profits by exploiting individuals who would do anything to get rich quick. .

Research by cyber-exposure firm Tenable has revealed that crooks exploit compromised YouTube accounts to promote fake cryptocurrency giveaways for Bitcoin, Ethereum, Dogecoin, Cardano, Ripple, Shiba Inu, and other cryptocurrencies. Tenable calculated that, out of a subset of YouTube Live scams encountered in October 2021 alone, scammers stole at least US $ 8.9 million.

“The Bitcoin scams that I have monitored received $ 8.2 million in stolen funds, averaging $ 1.6 million per scam. Ethereum scams received $ 413,000 in stolen funds, receiving an average of $ 82,778 per scam. Finally, the Shiba Inu scams brought in $ 239,000 in funds, receiving an average of $ 34,192 per scam, ”said Satnam Narang, research engineer at Tenable.

Scammers hijacking legitimate YouTube accounts to promote fake cryptocurrency giveaways are nothing new. However, individuals are still duped by crooks.

Types of crypto scams and how to spot and avoid

You have to be careful with crypto products offering enviable returns.

“Fraudsters promise extremely high returns that are not backed by fundamentals. This is a big red flag and more often goes unnoticed by many who are entering crypto to make a quick buck. Phishing emails are widely used to trick gullible investors into providing credentials, ”Blockchain and Emerging Tech evangelist Sharat Chandra told FE Online.

According to Shashi Jha, Legal and Compliance Officer at WazirX, crooks or fraudsters often make credible promises and sometimes fit into the crypto space by using the anonymity of the internet to their advantage.

Some of the most common scam tactics are:

Impostor scams

In such scams, crooks frequently imitate government officials, companies or well-known people. These types of frauds are carried out using fiat cash. Scammers recognize that users place great trust in influential voices. So they create fake videos featuring cryptocurrency founders and co-founders as well as notable people associated with cryptocurrency companies or CEOs of companies who have promoted the use of and / or discussed the purchase of cryptocurrencies for their company’s balance sheets.

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“The best way to spot an impostor account is to assess the returns you’re going to get. If a crypto offer sounds too good to be true, that’s the only red flag you need because it can be a deception, ”Jha said.

Cloning websites

It can be considered the most common scam that can take place. However, a person can stop falling prey to such scams thanks to the indications which can indicate whether the website is legitimate or not.

“If there is no lock icon in the URL bar, the site is not secure. Another thing to watch out for is, if an individual is diverted from one site to another while making payments. The redirect link may appear to be a legitimate site; However, close examination of the URL reveals that the bogus URL contains the number zero rather than the letter “o”. As a result, making sure to enter the correct URL in the browser with double checking becomes extremely important, ”Jha said.

Romantic scams

These scams exploit online dating to lure people into cryptocurrency investing scams.

Jha said that to avoid falling victim to a dating scam, you should never send money, trade or invest based on the advice of someone you meet on the internet, and never discuss your financial situation with them. strangers.

“Ensuring that you do not fall into the trap of individuals claiming to have exclusive investment opportunities is very important as the crooks try to act as quickly as possible. One can be assured of a scam if a caller, love interest, organization, or anyone else requests to send cryptos to their wallet. In addition, one should always avoid divulging sensitive or personal information to strangers on the Internet, ”Jha said.

It is also important to be aware and cautious before investing in cryptos. If something is wrong or wrong, trusting instincts can also help.

How to check if a crypto project is genuine or not?

One of the easiest ways to assess the authenticity of any crypto project is to take a look at the core team behind the project. This is something that will be available on the official website of this project.

“Most genuine projects would list the details of their core team members and their LinkedIn profiles. Although trivial, this simple step can indeed prevent jumping on a shady project, especially with FOMO which is typically built around such random projects, ”said Edul Patel, CEO and co-founder of Mudrex, a crypto investment. global algorithm-based. Platform.

Patel added that the next checklist might spend some time on the official project website. If the website is all about buying their crypto token and how it will earn 100 times over the next few days, that’s a sure red flag.

Another key checklist would be going through the project’s social media channels. All crypto projects are active on certain social media platforms. If the Twitter profile appears dead or has a few posts in the past few months, that should be another red flag, he added.

What if you have been the victim of a crypto scam before?

At present, there are some organizations where one can report if ever been the victim of a scam. Patel said the first of these would be to get in touch with the exchange or platform where the scam happened. The United States Securities and Exchange Commission is said to be another organization where investors can report scams.

In India, there is no official platform to complain about crypto scams. However, you can report to crypto exchanges where you trade or invest in cryptocurrencies.

How to increase the chances of not losing money by investing in crypto?

“One of the most important steps to avoid getting scammed is to do your due diligence before investing. While this can be a bit of a task for some, it goes a long way in avoiding getting scammed in the business. ‘crypto ecosystem,’ Patel said.

Data on all crypto projects is available for free on websites such as Coinmarketcap, Coingecko, and Messari. Investors should try to avoid projects with very low market capitalization.

You shouldn’t fall prey to similar websites and share your login password details over the phone. Two-factor authentication enabled by Google Authenticator or password managers is a safe option to prevent password theft.

Hardware wallets are more secure than hot wallets. If you understand the basics of public and private key management, switch to hardware wallets for better security of your digital assets, Chandra suggested.

Patel said a good place to start should be investing in coins with a market cap over $ 100 million, in addition to all the basic checks.

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