Crypto and Coinbase Scams To Watch Out For In 2021
Crypto and Coinbase Scams To Watch Out For In 2021
Cryptocurrency has had a huge year. The most recent crypto bull market-style surge was the biggest in history and saw Bitcoin reaching heights of just under $65,000 in late April 2021. Considering that a single Bitcoin (BTC) was only worth $2 in 2011, countless passive investors and so-called “computer geeks” from a decade ago are now sitting on small fortunes. Who’s laughing now?
Whenever there’s something as big as cryptocurrency, though, you can bet your bottom dollar (or your bottom altcoin, in this case) that there are going to be scammers to take advantage of it. In fact, crypto scams are everywhere these days.
From extortion to fake support emails and investment fraud, scams are everywhere. Today, many scams are centered around Coinbase, the largest crypto exchange in the United States. Others may request your crypto wallet address or steal your passwords… Scary, right? Especially seeing as crypto funds aren’t insured like the money in your bank.
So, with all of that being said, we decided that it was time to write a tell-all guide on the most common crypto scams in the industry so you don’t get duped by scammers. Along the way, we’ll also show you some of the best ways to keep yourself (and your investments) secure and safe. Let’s dive in!
Why Do Scammers Like Crypto So Much?
First, let’s address a major question that’s been asked over the past few months as crypto scams have been on the rise, “Why crypto?”
Well, there are a few key reasons why scammers love crypto. And before we begin, we are in no way smack-talking crypto. We love crypto too! Blockchain technology is undoubtedly here to stay and we think it’ll eventually revolutionize the way that the world does business.
But back to the topic at hand…
One of the more obvious reasons that scammers like crypto is because it’s unregulated. While the SEC and other global financial organizations/governments have made initial efforts to regulate crypto, there’s a long way to go until it’s fully regulated, tracked, and accounted for. Some would say that this will never happen, but the verdicts still out on that one.
Another reason is that scammers love crypto is that most of the crypto wallets and funds on the blockchain aren’t insured. If somebody were to fraud you out of money from your bank, there’s a good chance you’d get it back thanks to the fact that most banks are insured by the FDIC.
Lastly, it’s almost impossible to track crypto since most wallet addresses aren’t associated with names or locations. They’re just long hash codes floating around in cryptospace. So, once your funds have been sent, there’s no way of tracking where they went, where they were transferred to, or who really has your money.
Top Coinbase/Crypto Scams To Keep An Eye Out For:
As you can see, cryptocurrency is a very attractive way for clever scammers to exploit you for your money. This is why it’s vital that you keep your internet traffic and data secure using a high-quality, reputable VPN that’s encrypted with 256-bit AES encryption.
So, that being said, here are some of the top coinbase and crypto scams that you need to keep a close eye out for.
1. Phishing-Style Emails: One of the most common scams also happens to be one of the oldest on the internet. Phishing scams are emails that are designed to extract personal information from you, such as your username, password, phone numbers, or security questions/answers.
For example, you might receive a phishing email from somebody claiming to work with your crypto wallet, Coinbase, or even a government agency, saying that they received your request for help, and just “need some details to verify your identity.”
Keep in mind that reputable wallets and exchanges like Coinbase will NEVER ask for these personal details over email. If you see an email asking for these details, there’s a 99% chance that they’re a scammer. Report them to the FCC and block future emails.
Here’s an example:
2. “Tech Support” Phone Scams: Just as some scammers try to hit your email with phishing probes, others may try to hit your phone number claiming to be “tech support” or some other seemingly trustworthy individual trying to verify or access your account.
Again, true crypto wallets and exchanges will NEVER ask for these highly sensitive details over text, email, or phone calls. For example, Coinbase handles all of these details using secure two-factor authentication and SSL-encrypted web pages.
3. Investment Fraud: Investment fraud was rampant throughout 2017 and 2018, as thousands of new cryptocurrency and blockchain-based companies came out of the woodwork.
Many of these new companies offered promising ideas, hosted fundraisers, and showcased whitepapers detailing how first and second-tier investors would be able to get huge (often unrealistic) returns on their investment once the company launched.
Unfortunately, many of these were “pump and dump” schemes where executives would artificially increase the value of their coin to encourage investment, and then dump all of their holdings, taking all of their profits with them. Some were straight up fraudulent companies where companies took every dollar invested and ran.
This is why you should only invest in cryptocurrencies and blockchain companies that are listed on registered exchanges. To be listed on an exchange, most coins have to go through verification to ensure they’re legitimate and worth trading.
4. Public Wi-Fi Hacks: Another common attack can come from hackers who are scouring public wi-fi networks. Whenever you’re at your local coffee shop using the public wi-fi, all of the data sent over that network is unsecured. It’s great for doing some schoolwork, but you want to avoid sending sensitive data or logging into personal accounts from it.
These types of hacks can be almost entirely prevented by using a VPN like NordVPN, though. The VPN will re-route all of your internet traffic through external servers located in different regions. These external servers should be highly encrypted (if you’re using a good VPN, that is), making it impossible for hackers to see the data you send over public networks.
5. Crypto “Giveaways”: Crypto giveaways are another popular scam… You may be contacted via email, text, or even social media with a message saying that you’ve been selected for a giveaway. They’ll then proceed to tell you that you need to send them a one-time small payment so they can verify your wallet’s address…
Guess what? You’re probably never getting your money back or the promised giveaway. These scammers often hit thousands of people at once, earn a few grand in small $5 or $10 increments and then drop off the face of the planet.
6. Extortion Scams: One of the uglier crypto scams on the internet are extortion scams. These are scams created by hackers who claim to have valuable, private data on you. Perhaps it’s a message you sent on a dating site or maybe they claim to have hacked your webcam and have explicit videos of you…
Sometimes, their claims are true and they do have valuable information. However, most of the time it’s a bluff designed to scare people into compliance. Either way, you should avoid negotiating with these scammers as they’re some of the most dangerous individuals on the web. Once you bite the hook, it’ll be almost impossible to let go.
7. Job Offer Scams: If you ever get an online job offer asking you to submit a few dollars to verify your crypto address, there’s a good chance that it’s a scam. As with the “free giveaway” scam we discussed above, they’ll take your small payment, filter it through other wallets, and run.
How To Protect Yourself From Cryptocurrency Scams
So, now that you have a better idea of the various crypto scams out there, here are some of the best ways to protect yourself from them.
Always Use A VPN While Accessing Your Crypto Wallets/Accounts
If you’re accessing ANY sensitive information or data on your devices, it should always be encrypted with a secured VPN. Not only will it prevent hackers from accessing your data and accounts but it will also provide you with total anonymity while you’re browsing.
If you’re not sure where to start, check out our list of the top-10 most affordable VPNs here!
Use Two-Factor Authentication For All Transactions
If you’re using an exchange or wallet such as Coinbase or others, make sure that you go into your settings and enable two-factor authentication. This will prevent any unauthorized transfers out of your account, even if a hacker does get access to your credentials.
Make Sure Your Devices Are Protected With Anti-Virus
Sometimes, hackers can gain access to your passwords and credentials by embedding viruses and keyloggers into your PC. Make sure that you have a reliable antivirus software and run daily scans for malware to ensure there’s nothing lurking under the surface stealing your data.
Use Strong Passwords
Make sure that you use strong, hard-to-guess passwords for all of your major accounts. Utilize passwords with upper and lowercase letters, numbers, and special symbols. Don’t use your pet’s name, your birthday, your name, or other personal data that could be easy to guess.
Lastly, trust your gut. If you receive a totally unexpected message, email, or phone call from somebody claiming to be somebody you can trust, there’s a good chance that you shouldn’t trust them. If Coinbase or another wallet were to contact you, it would be planned, legitimate, and absolutely NO personal credentials or information would be discussed over the phone or sent via email.
As long as you’re wary and keep a sharp eye out, though, you shouldn’t have to worry about being a victim of a cryptocurrency scam. Stay safe friends!