The most common crypto scams and how you can protect yourself from it

In hardly any other area, there are currently more fraud cases than in the crypto community. We introduce you to the most important ones here and tell you how to protect yourself from them.

1. Online Seed Generators
For some wallets (eg the IOTA Wallet) you have to set your own seed. In the case of IOTA, this is an 81-digit password that must consist of uppercase letters and at least one 9. Since some did not want to generate a password themselves, they resorted to online seed generators. These generate you by mouse click an 81-digit seed. However, as it turns out later, a few of these seed generators also stored the generated passwords, The stored seeds were then later used to steal the assets of the investors concerned. You have to know that the seed is something like the master key that allows all credits to be transferred. A thief does not even have to have access to your computer on which the wallet is installed. The seed is enough to access your balance on another computer.

What can you protect yourself? 
Never use an online seed generator! When generating an 81-digit seed, all you have to do is push 81 random keys on your keyboard.

2. Copies of Known Cryptite Sites Another
popular way to get credit is to copy known pages in order to get to the login data from the users. For example, the page Blockchain.info was copied to get to the logins. You have to know that Blockchain.info also offers a wallet service where Wallet could save your bitcoins. If Google users searched for “Blockchain info” in some countries, they ran a Google ad that led to Blockchaina.info, a cheat site that has nothing to do with Blockchain.info. The site was a 1: 1 copy of Blockchain.info and was only designed to get login information from users. There are also similar attempts to MyEtherwallet.com and other sites.

How can you protect yourself? 
Never click anywhere on a link to a page where you want to log in. The best way is to bookmark the pages and just go over the web pages. In addition, you should always look for the ssl encryption. There will not be a page that stores important data from you and is located at http: //. All pages should now be encrypted ssl and have a https: // domain (although the pages can also be accessed at http: // they will redirect to https: //). The ssl certificates will also show you every browser, for example by a small lock symbol.

3. Fake ICOs Again
and again there are ICOs that are only designed to get your money. Once the ICO is over then the pages are taken off the net and the makers of the ICO disappear with the money. The last case we reported was LoopX , but this is not an isolated case.

How can you protect yourself? 
Generally there is no 100% protection here. A good indication for a scam is always when no people are already presented in the whitepaper. Although everything is very superficial and promised a lot, but after reading the white paper is not clear how that should be possible.

4. Used Ledger Nano
At ebay and in other marketplaces there are always offers to buy the Ledger Nano a bit cheaper. This is particularly interesting now, where the Ledger Nano S is sold out and will be available again in one month. There have been cases in the past when users bought a used ledger on ebay and the seed from the ledger was already filled out. Anyone who has not owned a ledger to date will hardly register the difference. Of course, the previous owners have also noted the seed in these cases, which then allows them to get the credit that the new owner saves on the Ledger Nano S.

 

How can you protect yourself from this? 
If you want to use a hardware wallet like the Ledger Nano S, buy it directly from the manufacturer and make sure that it is still original packed. The enclosed note on which you can write down the seed should never be filled.

5. Wrong Twitter Accounts
A variant that has been very popular in recent weeks are wrong Twitter accounts of well-known personalities from the crypto world. These accounts have the same profile photo as the familiar original and a name (Twitter handle) that is very similar. For example, sometimes only an “i” was exchanged with an “l”. The accounts then usually promise the same thing that always sounds something like this:
“I give 10 BTC to my followers as a thank you. Please send me 0.01 BTC and I will return the first 10 of you 1 BTC. ”

How can you protect yourself from this?
If you want to use a hardware wallet like the Ledger Nano S, buy it directly from the manufacturer and make sure that it is still original packed. The enclosed note on which you can write down the seed should never be filled.

5. Wrong Twitter Accounts
A variant that has been very popular in recent weeks are wrong Twitter accounts of well-known personalities from the crypto world. These accounts have the same profile photo as the familiar original and a name (Twitter handle) that is very similar. For example, sometimes only an “i” was exchanged with an “l”. The accounts then usually promise the same thing that always sounds something like this:
“I give 10 BTC to my followers as a thank you. Please send me 0.01 BTC and I will return the first 10 of you 1 BTC. ”

 

Needless to say, the promised BTC or ETH will never be sent out. The texts got attention because they simply responded automatically to as many tweets as possible. This ensures that the texts are seen very frequently.

How can you protect yourself from this? 
Just do not believe that someone wants to give you 1 BTC or ETH.🙂

6. Pyramid
Systems These are also available in the crypto area. The most famous case lately was Bitconnect . The company has promised to get 1% profit per day for investors through special trading bots. This has then “worked” as long as new users have joined and the Bitcoin price has risen. In the end, however, most investors ran out of funds and the system collapsed.

How can you protect yourself? 
Just do not believe anyone who guarantees you certain profits. With one percent a day you could make a profit of 3,700% per year with 100 € use and the whole grows exponentially. It’s not that easy to earn money in the crypto sector.

7. Pump and Dumps
Especially with small coins, with a low daily trading volume, it happens that the prices are “pumped” again and again . So artificially inflated to attract new investors who also want to benefit from the price increase. The victims are then mostly investors who are blinded by the price increase and the “pumpers” then buy the coins, well above the normal price. A short time later usually the relapse to the old price level follows, since the demand can not be maintained.

Pump and dump example

How can you protect yourself? 
Always skeptical when the price rises too fast, especially with very small coins. If you can not find causes for it (for example, any important news about the coin) it’s always better to start with a pump and dump. In general, a pump and dump rarely takes longer than 1 hour Actually, it’s unbelievable how many different scams are currently taking place and the list is by far not exhaustive. So think about everything you do, if that can be serious. The anonymous payment traffic in the crypto area makes it very easy for fraudsters to get their money.