Cryptocurrency: It’s been the word in everybody’s mouth, whether they are wholeheartedly sold on digital currency or questioning why anyone would convert their cash. Although there are fans who believe crypto is our future, it’s also smart to put on the brakes and assess the pros and cons of using a digital wallet. Scams abound just as far as opportunities.
The benefits of crypto are advertised far and wide across the web: It’s fast, convenient, anonymous and, in many cases, an investment. When people talk about “investing in crypto,” they’re hoping the value of their purchase goes up so they can sell it – an even more alluring prospect than the money itself, assuming it successfully self-propagate profit. Like any investment, there is of course no guarantee.
It all seems like a great prospect, however, since the dawn of the Internet there has never been an online opportunity in finance that cybercriminals haven’t sought to exploit.
The Trouble With Crypto
Scams to steal money are nothing new, but the forms they take constantly change with new technology and user habits. Therefore, slowing down and assessing new situations before giving out personally identifying information will help you avoid many cyber-threats, even when they appear like legitimate offers at first. For an industry that’s still relatively new compared to the Internet itself, there’s plenty of unexplored territory yet to discover.
- Beware unexpected emails about downloading new apps for your digital wallet, checking your balance, and other offers or warnings about your funds.
- ONLY access your funds from secure devices to reduce the risk of picking up malware that compromise credentials.
- “Pump and dump” scams refer to any illegal promotion of a stock the perpetrator has invested in, so that when more people invest, they sell their stock for a huge sum. This occurs a lot with crypto because it’s unregulated, unlike most stock exchanges you may be familiar with.
- Pig butchering is the term for a scam that usually starts as a catfish on a dating site, who claims to have made money from certain investments. They convince the victim to send more and more money to fake websites before eventually disappearing with all the coins that they’ve sent.
- In a rug pull scam, the cryptocurrency creator advertises heavily to get people to invest in their tokens, and then they disappear with all the funds. The tokens become effectively defunct, and are often accompanied by specific code that prevents outsiders from selling the token to anyone else.
These are just some of the crypto-related threats plaguing digital wallet holders today. Billions get stolen in cryptocurrency every year; the more you know about what threats you face, the less likely it is that you’ll fall victim.
There’s also, of course, the risk of simple mistakes occurring; since people tend to transfer cryptocurrency payments directly, there’s no bank intermediary where you can call up customer service with complaints and problems. Sending money to the wrong person, losing access to your digital wallet, stolen funds, or the website you primarily use to exchange funds going down are all issues you might have to face alone.
How to Avoid Cryptocurrency Theft
Just like any other online activity, those who deal in cryptocurrency run the risk of becoming the target of a phishing or social engineering scam. Avoiding these threats requires plenty of the same steps.
- Use strong DNS and spam filters
- Regularly back up your data to secure storage, and check that the files are recoverable and readable too
- Regularly update the devices you use to access your digital wallet so as to maintain the best possible security
- Choose tech support you can rely on for troubleshooting in a pinch
Keep an eye on your digital wallet to make sure you know about every transaction that goes in and out. When someone reaches out about an incredible new investment opportunity, slow down and do some research before transferring over any funds.
As much as we all hope, there’s no such thing as easy money. If a proposition seems too good to be true, it most likely is. Whether you’re just starting out on your crypto career or a seasoned digital trader, practice caution with your currency.
Cybercriminals who have their eyes on your finances will come up with new fronts to try and trick you out of your log-in credentials or private information. Some scams will be easy to recognize as fraudulent, but others will be carefully crafted or even targeted toward you specifically. These can be harder to detect, and require a keen eye and knowledge of what to look for. That’s why staying on top of industry news matters too, as well as helping you craft a support network online.
Without mass regulations or a specific help line to contact in an emergency, it may also be difficult to recover lost cybercurrency after a successful breach or scam. Preparing a strong defense prevents hackers from getting into your accounts. Pair that with your new know-how, and you can continue buying, trading and investing in cryptocurrency with peace of mind.