LATOKEN Exchange Review: 6 Popular Crypto Scams (and How To Avoid Them) — Deadline News
Crypto can be an exciting way to invest and earn income. It can also be home to scams and hacks looking to take your money.
According to the crypto security firm Chainalysis, scammers stole a record-breaking $14 billion in cryptocurrency in 2021.
Any crypto investor must know how to protect themselves from crypto scams. Here’s a look at some of the most common crypto scams and how to avoid them.
Many scammers use dummy accounts and bots to inflate trading activity artificially. These scams use large buy and sell orders, which are canceled before completion, to give the appearance that demand is escalating or declining.
This tactic overinflates the asset price, after which a scammer can sell their holdings for a significant profit. It begins with pumping up the hype about a crypto in online forums and social media, leading others to believe the asset will surge in price, compelling duped investors to buy. Next, the scammers dump their crypto at inflated prices and make a quick profit.
3. Rug pulls
Crypto developers may start a product and then abandon it, running away with the money early investors have put up to fund the project. Often, these scammers pair their products with a legit cryptocurrency on a decentralized exchange. They promote the new crypto on social media to attract investors, only to pull the rug and run.
Staying away from these scams means relying on credible review sites and not social media hype.
4. Hidden fees
Sometimes the scam is in the fine print. Scammers can create “smart contracts” that are computer code that few can easily read and interpret. Once the crypto launches, a clause in the contract requires investors to pay massive portions of the token’s value to the inventor via fees. To see if the token includes hefty resale fees, buyers can test out new crypto by buying a small portion of it, say $1, and selling it at nearly the same price.
5. Crypto can’t be resold
Another smart contract trick is to issue a token that cannot be resold. Hackers have complete control of the token, often buying it as the price escalates to drive the price higher. Investors are stuck with crypto they can’t sell, with the scammers taking all the profits. An excellent way to prevent being taken by this version of the pump-and-dump and the rug pull is to avoid newly created cryptos.
6. Fake giveaways
That “celebrity” offering you free crypto may be a scammer posing as someone, even complete with a fake social profile. The scammer claims to be giving away crypto tokens if you pay them first. The reality is that once they have your money, these scammers disappear.
Tips to Protect Yourself
Want to avoid falling for crypto scams. Here are a few essential tips:
- Use multi-factor authentication
- Don’t share your private keys or seed phrases
- Don’t fall for people saying they will guarantee a profit on an investment
- Don’t send crypto to someone claiming to work for a government agency
- Use a reliable trading site
At LATOKEN, we offer staking in over 50 cryptocurrencies with over 450 crypto pairs and 2 million users. Learn more about our services that allow you to earn interest while investing
Originally published at https://www.deadlinenews.co.uk on April 7, 2022.
