The world of cryptocurrency offers some exciting possibilities for many people. What that should mean is great trading and investing opportunities, as well as a chance to make the most of new developments in turning crypto into a means of paying for real-world goods and services or converting it into fiat currencies.
Unfortunately, some see a different reason to be excited. Like any new development in trade or finance, especially when technology is involved, there are crooks out there who smell an opportunity to make a dishonest gain.
Getting scammed is a risk we can face in all sorts of ways. From private landlords advertising properties that aren’t real and who demand deposits before would-be tenants can get a viewing, through to everyday purveyors of phishing emails and texts demanding payments for packages allegedly stuck in warehouses, there are many of them out there.
Why Crypto Scamming Is Inevitable
This being the case, it was only ever going to be a matter of time before criminals started turning their attention to crypto and there are now several ways they will try to scam people. To tackle this, it is important to be familiar with common scams, both of the kind that might be encountered in other areas of business and finance and those specific to crypto.
Those who use crypto accounts for business purposes may be very aware of a lot of ways some will try to scam them, often with ransomware attached (an issue the National Cyber Security Centre has highlighted in partnership with the Association of British Insurers).
Ransomware involves hacking data and then demanding payment to unlock it, but first there must be enough of a security breach to enable the crooks to access the account. Thankfully, our XRPL security system is designed to be extremely robust and make this exceptionally hard for crooks to do.
However, while phishing, ransomware, hacking and so on may be common risks for businesses whether they are using crypto or fiat currency, especially if the scammer claims to accept crypto as a means of payment, a particularly notable risk involves investing in the first place.
Beware Investment Scams
This was highlighted in an article by the Financial Conduct Authority last year, which warned of a large rise in investment scams given a veneer of legitimacy by being made to look professional, or allegedly endorsed by celebrities (who will almost always have nothing to do with them).
Common features of these scams include people or firms being contacted suddenly, urging people to make very quick investment decisions, and promising unrealistic returns. They are often to be found advertising on social media or with ads optimised to ensure they are found by those using search engines to seek out investment opportunities.
An approach that has caught out many people is the pump-and-dump approach. This was epitomised by the launch in 2021 of the Squid Game cryptocurrency, named after the Netflix series.
This generated a lot of hype and interest, but the creators then sold their holdings at a large profit, with this large-scale divestment panicking other investors into doing likewise. As a consequence, the value of the Squid Game coins plummeted to almost nothing, making its creators rich and leaving others out of pocket.
This kind of scam is mainly aimed at those taking their first steps into the crypto world. In other cases, the crooks will aim at those with established accounts, using existing platforms and holding a stock of crypto.
In this case, attacks will be aimed at getting people to compromise their data through phishing or ‘airdrop scams’ that tempt people to give up critical security details – enabling the scammers to access their wallets.
The Xtra Protection Of XRPL
However, However, some elements of XRPL security provide extra protection. Not only does it use Blockchain, but the fact it is an open ledger means all transactions are publicly visible.
This means money laundering, frauds and scams being attempted or undertaken can be quickly spotted, identified and halted by exchanges and server providers. Consequently, you can be sure the crooks will look elsewhere to carry out their criminal activity undetected.
Of course, you should always be careful with your own security in crypto like in anything else. That means following some golden rules.
Don’t give out your pass numbers and code words, keep physical records of them so they are not stored online (and therefore beyond the reach of hackers), use two-part authentication and install up-to-date security on your phone or laptop to prevent malware attacks from taking place.
By taking these wise steps you can ensure maximum security, backed up by a crypto exchange system designed to create the least-friendly environment for criminals to operate in.