Crypto Expert (Beginner to Pro) #4 - Popular Scams in the Crypto Ecosystem

The crypto ecosystem over the years has been the most targeted industry for hackers and their activities have left a lot of asset users heartbroken. The aftermath of hack events in the crypto ecosystem is always a disaster.

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We started a lesson about safety in the crypto ecosystem last week and we are proceeding to some of the most popular ways scammers utilize to perform their atrocities. Let's take a ride together on this.

Targets of scammers in the crypto ecosystem are not only beginners, even advanced users (though they tend to avoid most of the attacks) are not exempted, as such guiding against scams in every possible way should be an everyday practice.

Cryptocurrency companies like exchanges are also targets of attacks even with their security team always active to secure the platforms. The popular attacks on FTX (exchange) and LUNA (Terra) in 2022 were crazy ones and that contributed to a long bear season that lasted close to two years.

_{BTC chart from May 2022 down to the end of the Year | TradingView}

From the chart above, Bitcoin fell from around $40K when the FTX crisis occurred and touched $15K. The FTX and LUNA events were believed to involve insider participation in the hack, the event that wiped billions of USD and of course, people were pulled down due to loss of entire life savings.

If these events can happen around platforms that host our assets, individuals should be on top of their game securing their assets, and knowing different ways scammers can utilize to steal from them. We will be taking a look at some of the popular scam methods in the next section.

The list of various methods scammers utilize in the crypto ecosystem is quite endless. Some of these will be discussed below.

Phishing- Phishing attacks come in the form of links shared with users, using any social medium. The main aim of this is to lure users to visit specially designed websites for the attack, user will be asked to input specific keys depending on what platform the hackers are targeting.

Giving out the keys enables the hackers to have control over the account/wallet and that could result in an instant loss of assets.

Cloned Website- Scammers often clone popular crypto platforms' websites, presenting them as genuine for users who may end up losing their access. For example, you can imagine https://steemit.com/ and https://steeemit.com/, the former is the original website and the latter represents how scammers tend to twist the address to lure users to the cloned website.

_{Scam | Pexels}

Users will be required to give up their login details having been lured to log into the fake website (pretended to be original).

Ponzi- Many projects have come up with Ponzi schemes in the crypto ecosystem, they often require users to deposit funds which are faked to be used for trading and give users a certain return on investment.

These projects pay users for referring new users to the platform and that's where the ROI comes from, no trading really exists. Platforms like this solely depend on the inflow of users to pay old ones and they will eventually close down with users' money in the long run.

Fake ICOs/NFT- Initial Coin Offering (ICO) is a popular event in the crypto ecosystem that enables investors to buy new assets (often not listed yet) at lower prices and help the project raise funds for further developments (sometimes, contribution to liquidity funds and so on).

There are a lot of projects that organize fake ICOs and vanish after the event. The same thing applies to NFTs (Non-fungible tokens) ICO, investors tend to be promised to earn a share of a token for holding an NFT which may turn out to be fake in the long run.

Rug-Pull- Rug-pull is often associated with new tokens (mostly meme coins) with no special use case. Investors/traders may be lured to buy some of these assets because they have enjoyed a good price movement within a short period.

The moment only lasts a while until they pull out liquidity, carting away multiple thousands/millions of USD and rendering the asset non-tradeable.

Fake Rewards- Users can sometimes receive emails that contain a message about a user winning certain assets reward (maybe 1 BTC) with specific websites and login passwords attached. Visiting such a website may require that users send in some assets to be able to withdraw the fake assets kept in there.

We can go on and on with the list of the methods scammers utilize to lure users to give up their hard-earned money. The methods are sometimes identical and it is not always too hard to know it's a scam, if you are not too greedy.

Even though anyone can fall for such scams but as a user in the crypto ecosystem, safety is what you practice every day.

In the previous lesson, we discussed some of the ways one can utilize to stay safe from these scams and I will just add a few more today.

• Don't click on random links (even when shared by your friends).
• Do more research before buying into any asset.
• If you receive a random message from a platform you have not interacted with, please ignore it.
• Be your investment manager, don't invest in Ponzi schemes.
• Only follow information from projects verified social platforms/websites.

In conclusion, safety in the crypto ecosystem ultimately starts with you if you don't want to experience the heartbreaking side of crypto. Having full knowledge about your interactions will go a long way to keep you and your assets safe.

It's a wrap and I'll see you in the next edition.