Cryptocurrency transaction volume reached $15.8 billion in 2021. While criminal activity accounted for less than 1% of that amount, there was a 66% increase in stolen crypto totaling $14 billion. As the adoption of crypto increases, it will not be surprising to see fraudulent schemes rise as well. Here is the second part of crypto scams every Monero and other crypto owners should be knowledgeable about.
Pump and Dump
A charity cryptocurrency token called Save the Kids was launched on June 5, 2021. Members of FaZe Clan, an American professional e-sports and entertainment organization, promoted Save the Kids to millions of their followers. The token’s website, which has been taken offline, stated that the project had “a mission to build a better world for kids” and pledged to donate a percentage of the proceeds to charity. These FaZe members are very influential and many of their followers bought the token. In about a week, the value of the Save the Kids token dropped from $0.0029 to $0.0012. The influencers allegedly “pumped and dumped.” Pump and dump schemes involve promoting a token or crypto, “pump” and then insiders will sell it at high prices, “dump.” Those involved will spread misleading information to raise the price of a crypto and then sell it simultaneously at a given time, leaving the rest of the investors in a lurch. Members who were involved in promoting the token have since been suspended or removed from the organization.
Protect yourself from a pump and dump by:
• Learning everything you can about the crypto you intend to buy. Find out the coin’s purpose, history, and its community.
• Starting small and see how things go before investing more.
• Taking an influencer’s or celebrity’s promotions with a grain of salt.
In 2017, OMGNetwork promised to airdrop OMG tokens to its customers, but they had to postpone it. Some people did not get the news that the company was not giving the tokens anymore. Scammers created fake sites and Twitter accounts asking people to share their private keys in order to get the tokens OMG promised. Victims lost 300 ETH before authorities were alerted. Airdrops are a marketing strategy used by some blockchain-based services. The platform will announce they will give away X number of a specific crypto coin if users will complete certain tasks. Fraudsters have found airdrops an ideal way to phish for information. They will lure crypto holders to give private information in exchange for crypto coins. Another way scammers fool people is by airdropping coins to a crypto wallet. Wallet holders notice these new tokens and try to sell or swap the tokens, but nothing happens. They then check the block explorer and see this message, “Fail with error ‘Claim ZEPE on Website FIRST -: www.Zepe.vip’” or something similar. The wallet holder then goes to the third-party site and the holder may be tricked into giving their secret recovery phrase or once you confirm a transaction on that page, it gives permission to take your tokens rather than give the holder tokens.
Protect yourself from airdrop phishing by:
• Never giving your secret recovery phrase to a website or to someone online.
• Steering clear of anything that promises a huge number of crypto coins or anything that asks you to send some crypto first before you can receive the reward.
• Taking care which decentralized applications you connect to and what permissions you give them.
Victims lost $2 million in a seven-month period from scams advertised by fake Elon Musk Twitter accounts. The false Elon Musk account urged people to send 1 BTC and get 10 BTC back. Crypto copycats are malicious accounts posing as real crypto companies, projects, entrepreneurs, or celebrities. They may peddle free crypto and once users click on links in the post, they are directed to another website that steals crypto, personal, or financial information.
Protect yourself from crypto copycats by:
• Ignoring and deleting any messages that instruct you to send crypto or enter any personal, crypto or financial-related information.
• Making sure the social media accounts of well-known people are authentic. The first thing to look for is the blue tick beside their names.
• Reporting a duplicate account if you see one to the social media company.
An additional measure of security is getting an online wallet from a trustworthy and reputable source such as XMRWallet for your Monero holdings. Signing up with a secure Monero wallet will keep you in complete control of your XMR coins and keys. XMRWallet allows you to use Monero without requiring you to download any software. It has multiple language support and is completely free. Take advantage of everything XMRWallet offers. Using XMRWallet for your Monero coins will expand the privacy and anonymity that Monero provides.