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The rise of cryptocurrency scams: don’t get mugged

The rising interest in Cryptocurrency is leaving consumers vulnerable to scams.

cryptocurrencies

Wednesday, 16 October, 2019

Criminals are capitalising on the wave of unsuspecting crypto-novices by selling worthless currency. So if you’re thinking about investing in cryptocurrency make sure you do your research before buying!

How does it work?

Cybercriminals team up to inflate the price of a new crypto so unsuspecting investors buy at a high price with real money. As soon as the scammers have earned enough they abandon ship, the crypto price sinks and buyers are left with worthless ‘online monopoly money’.

[The] ethos is simple: Buy low, sell high. The implication is that investors outside the pump group will see the rapidly rising price and rush to buy in, anxious not to miss the next Bitcoin-style gold rush…

- Paris Martineau of The Outline

Fake news strikes again.

This scam is being covered in the news a lot at the moment. Buzzfeed’s investigation into it found the use of ‘Fake News’ or misinformation to spread the idea to invest in certain currencies. Rumours are spread over Twitter and popular forum sites like Reddit or 4chan. These ‘hot tips’ are usually traced back to small groups of scammers who masterminded the whole thing to their advantage.

In 2017 scammers even went as far as destabilizing the price of established cryptocurrency Ethereum! They did this by spreading a fake death rumour about it’s founder Vitalik Buterin. This volatile news led to mass sales of the currency. Then the criminals behind the rumours bought up the crypto dirt cheap and sold for massive profits once the value climbed again.

How to stay safe.

These sorts of tactics aren’t new. A lot of these methods are similar to those used by dodgy stock market players. This is why governments are working to similarly regulate this new market as fast as they can. However the rapid rise in new currencies is making this hard to do.

The best defense is always using common sense. Would you buy a car without checking that it’s reliable, in working order, not stolen and that the price is fair and competitive? No? Of course not! So take that logic and apply it to crypto.

Always check the source of your news about prices, make sure you understand what you’re buying and keep an eye on the market for any suspicious events!

Natalie Dunning author picture

By:

Natalie Dunning is a freelance writer and Media Psychology researcher based in Manchester.

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