5 Ways of Crypto Scams You Should Know

The world of crypto assets certainly cannot be separated from the targets of bad players. As told by one of the crypto influencers, Dami-Defi when 3 of his friends fell into a crypto scam trap. He said that his friends' wallets were hacked, and $25,000 disappeared quickly.

For this reason, Dami-Defi, in this case, describes as many as 5 crypto scams that often occur and how to 'scrape' or avoid them

Honeypot Scheme

Honeypot schemes are a way in which fraudsters track large wallets, and send fraudulent tokens to trick trackers into investing in bogus projects. These transactions are marked as “received”, which is tempting for investors.

To protect themselves from Honeypot schemes, traders or investors are advised to avoid investing in small amounts of tokens, especially in the range of US$ 200 to US$ 5,000, unless there is a valid reason.

Additionally, users should exercise caution when dealing with “received” tokens unless the amount is significant or is part of an over-the-counter (OTC) transaction.

Giveaway Scam on Social Media

Social media platforms have become hotbeds of giveaway scams, where fake accounts promise bigger returns in return for sending crypto.

In this case, scammers often carry out their actions by connecting victims and their wallets to suspicious applications under the pretext of attractive prizes.

In order to avoid this type of scam, it is very important not to send assets to anyone who promises large returns. Also, avoid connecting wallets to suspicious platforms, claiming to facilitate prize draws.

Pump and dump scheme

The scheme that often occurs is pump and dump, namely when someone with a big name or influencer buys an asset and touts it on social media. It is the fear of missing out (FOMO) on the part of followers that is commonly exploited, to incentivize them to invest thoughtlessly, and cause a spike in the value of the coin.

When the price is high because many people are buying these assets, then the perpetrators will sell all of their asset ownership. This of course resulted in significant price reductions and losses for those who bought.

To avoid this trap, users are advised to be wary of any influencers, especially those that specifically encourage users to buy and "HODL" (hold) up to a certain price point or market cap.

Initial Coin Offerings (ICO) Scam

ICO, is considered as an opportunity to invest in new coins at a discount before they are released to the public. But unfortunately this also becomes a loophole, even a nest of fraudulent activities. Some ICOs promise unrealistic returns and don't live up to their promises at all.

To avoid fraudulent ICOs, potential investors should do their research by checking social media accounts of a project, community engagement and reviewing their roadmap and tokenomics. Quality partnerships can also be an indicator of a legit ICO.

Fake website/app

One common scam is fake websites or apps, which mimic popular decentralized exchanges (DEXs) like UniSwap. These scammers trick unsuspecting victims by connecting their wallets to this rogue platform. From this platform, the perpetrator will gain control of the victim's account and drain their funds.

To avoid this kind of scam, traders are advised to visit a trusted source such as CoinGecko, and access exchanges under the Exchange section.