ATTENTION TO THE DANGERS IN THE CRYPTO WORLD! KNOW THEM AND ESCAPE THEM

betterthanmoney (25)in #bitcoin • 6 years ago (edited)

IN SUMMARY

News about hacks, frauds, and scams with cryptocurrencies are becoming increasingly common.
Malicious actors can take various methods to hack and empty the wallet of the naive crypto users.
We recommend that you learn about the main risks to which you may be exposed in crypto.

THOUGHT OF THE DAY
~One of the joys of cryptocurrency investing/trading is being your own bank, and this is also the biggest risk. You need to realize the importance of being your own bank if you’re serious about handling cryptocurrency and its Risks.

THE NEWS
Youtube Crypto Analyst Ian Balina was Hacked for nearly $2MM USD

Monday, Ian put out a tweet saying he was hacked for nearly $2MM USD during one of his regular live streams. Allegedly, his student email as his Gmail recovery email was compromised. He also stored his private keys on an Evernote doc. So his email got hacked, and then his Evernote got hacked, compromising his keys

SO?
The previous was just an example of the risks that you are exposed to when you take the role of being your own bank in the crypto world, but there are many more risks. Therefore, today in our report, we want to walk you through a list of the most common types of fraud:

1 -Hacked Accounts

There are many examples of public figures and the regular public having their computers or phones hacked and having their accounts wiped out, let’s learn from them.

3 Steps for protecting your phone

The first easy step to prevent this is to call your cell phone provider and put a “do not port under any circumstances” hold on to your phone number. By porting your phone number a hacker gets your number on their phone and have access to two-factor codes coming via SMS.

The second is to check your password recovery settings on all of your accounts even old and dormant email accounts and make sure they have strong password preferably not the same one for multiple accounts. Once a hacker has access to one of your old email accounts, they can impersonate you digitally.

The third and last is to make sure to use Use Google Authenticator for two factor on your phone and all your accounts that support it. Our research suggests that Google’s Authenticator is the most secure of the two-factor options out there right now.

2 -Fraudulent ICOs

The most common way to pull off a scam is to fabricate a fake ICO, create a marketing hype and persuade people to buy in.

ICOs are a great and an innovative way to fundraise for a company and are easily misused due to the lack of regulation. Ethereum has become the breeding ground for these fraudulent ICOs but Ethereum is not directly responsible for it as it is an open-source project.

Usual signs of fraud ICOs or Token Sales:

-Copied whitepaper
-Anonymous team
-Unusual hurry in execution
-Missed timeline goals
-Ignoring hard questions or rude responses
-No strong reasons for the token economy
-No roadmap

Here are some examples of fraudulent ICOs:

-Confido walked with investor’s $375,000.
-Benebit disappeared with investor’s $ 2.7 million.
-Centra Token scammed $32 million

3 -Shady Exchanges

The second most common form of scam that you will come across would be a ‘shady exchange’.
These exchanges spring up over-night and can go away just as fast.
Once you trust them and deposit your coins there, you have no way to get them back. Also, some exchanges can start doing well and suddenly still run away with your money because of an internal failure or fraud.

Some known scams are 01crypto, Btc-cap, Capital-coins, Cryptavenir, Crypto-banque, Crypto-infos, Cryptos.solutions, Cryptos-currency, Ether-invest, Eurocryptopro, Finance-mag, Good-crypto, Mycrypto24, Nettocrypto, to name a few.

4 -Fake Wallets

With the launch of Cryptocurrency, fake wallets have also been launched on iTunes and Play store.
It is one of the easiest ways to scam people and happens many times during the launch of Bitcoin forks. These wallets take your seed or private keys and rip you off your BTC too.

@CoinomiWallet has tweeted warnings about such clones of their software stealing user funds.

5 -Pyramid or Ponzi Schemes

This form of scam is easiest to spot but people still fall for it, enter the High-Interest Yield Programs the most famous being Bitconnect.

If you find a crypto project that actively encourages the recruitment of new investors to maximize your profits, it is a Ponzi scheme. This system works on the model of scamming the one who enters the system later. These schemes promise absurd returns making them easy to spot as Ponzi schemes.

6 -Phishing Scams

Phishing scams are another common form of scam in the cryptosphere.
Here, the scammers will try to get your username, password, or seed keys somehow by fooling you. Mostly the attackers use two methods to achieve this:

Punycode - International character set which allows them to “represent Unicode within the limited character subset of ASCII.” Leveraging this method, the malicious domain ‘xn--inance-hrb.com’ could be displayed as ‘ƅinance.com.’
Interesting video on the subject :

You can see how that could be confusing to newcomers – and some less technical crypto-traders in general.

Fake Airdrops - Attempt to steal your information and sell it, use it to market to you or they can use it to have bot accounts sign up for things like airdrops.
Some may ask for “donations” to get more coins in the form or in a followup email.
Some go as far as creating a clone website and ask for your private key.

7 -Impersonators

Fake Twitter and Facebook accounts that impersonate the actual legit project or the person behind it. To get you to fall for any of the above or worse yet ask you to send them funds directly.
You will find impersonators on Twitter acting as Binance’s CEO and announcing fake ICOs, Exchanges, Wallets, and Airdrops. An example of a fake Vatalik account on Twitter: @JacobShanks_
Also, scammers have started acting as crypto exchange support staff to scam people of their crypto funds.

CONCLUSION

Scams are nothing new thing and crypto being a decentralized and open source concept requires more awareness as a user of possible bad actors. The only way to not get scammed is to find legit sources of information, as well as self-education of investors through trusted sources like WSE. You need to spend some time learning about what you are investing in so that you don’t get scammed. Protect your phone number and email accounts, and use Two-Factor authentication as minimal precautions.

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