Beware of Crypto Scams

Cryptocurrency is a hot topic, attracting many people to invest with the promise of high returns. However, as interest grows, so do the number of scams. Here’s what you need to know about common crypto scams and how to protect yourself.

What is Cryptocurrency

Cryptocurrency is digital money that exists only online and uses technology to ensure secure transactions. Unlike traditional money, it’s decentralized and not controlled by governments. Bitcoin is the most famous example.

Types of Crypto Scams

1. Fake Trading Platforms and Wallets

Scammers create websites that look legitimate and publish fake articles featuring famous people endorsing their services. These articles appear on reputable news sites, making it seem like celebrities or financial experts are backing these platforms. Fake review sites add to the illusion of legitimacy. However, once you deposit your money, it’s gone.

• Example: In 2023, a fake crypto wallet claimed endorsement from Elon Musk. In reality, he had no connection to it, and many people lost their savings.

2. Impersonation Scams

Criminals pretend to be from your bank, claiming an internal investigation puts your money at risk. They instruct you to withdraw your cash and deposit it into a cryptocurrency wallet they control. Following these instructions means losing your money for good.

• Example: In the Czech Republic in 2023, several people lost their savings after fake bank employees told them to transfer their money to a "secure" cryptocurrency wallet.

3. Sophisticated Call Centers and AI Deepfakes

Scammers operate call centers with skilled operators who persuade victims to trust them. They might use deepfake technology to create videos of famous people promoting their scam, making it very convincing.

• Example: Scammers created a deepfake video of Czech entrepreneur Petr Kellner making it appear as though he was endorsing their investment platform. The video was very realistic, and many people believed it.

4. ICO Scams

Fraudulent Initial Coin Offerings (ICOs) promise new, innovative cryptocurrencies. Scammers create hype around these new coins and disappear with the money once they collect enough investment, leaving investors with worthless tokens.

• Example: In 2022, the Squid Game token scam raised millions of dollars by promising a new cryptocurrency inspired by the popular TV show. The creators disappeared with the money, leaving investors with worthless tokens.

Recognizing Warning Signs

To avoid falling victim to these scams, keep these tips in mind:

1. Unrealistic Promises: Be wary of guarantees of high returns with no risk. If it sounds too good to be true, it probably is a scam.

2. Pressure to Invest Quickly: Scammers often use high-pressure tactics to rush you into making decisions without a proper research.

3. Pressure to protect your savings: Banks will never call you to withdraw and transfer money to crypto a account.

4. Lack of Transparency: Legitimate projects will provide detailed information about their team, technology, and roadmap. Scams often have vague or missing details.

5. Unsolicited Offers: Be cautious of unsolicited messages or social media contacts offering investment opportunities.

6. Poor Online Presence: A legitimate crypto project will have a professional website, active social media profiles, and positive reviews. Scammers often have poorly designed websites and minimal online presence.

Preventing Scams

1. Use Safe Surfing feature: This feature in Redamp.io application can filter out malicious URLs provided by scammers.

2. Verify the Platform: Before investing, check if the platform is registered with financial authorities. Look for reviews on independent sites, and be wary of offers that seem too good to be true.

3. Check with Financial Authorities: Visit websites of financial regulators like the Czech National Bank (ČNB). Call your bank directly using a number you know is genuine.

4. Consult Trusted Sources: Websites like CoinMarketCap and CoinGecko provide information on cryptocurrency projects.

5. Ask for Professional Advice: Speak to a financial advisor before making significant investments.

6. Reporting Suspected Scams: If you suspect you’ve encountered a scam, contact your local consumer protection agency or report it to organizations like the Czech Trade Inspection Authority (ČOI).

7. Educate Yourself: Learn about common scam tactics and stay updated on the latest fraud schemes. A very good source of those information is our blog.