It is no surprise that the crypto market is swamped with newcomers who are hoping to make money from it. They invest in a variety of cryptocurrencies and Initial Coin Offerings (ICOs). Anyone with internet access, anywhere in the globe, can buy, trade, and hold cryptocurrency and reap the financial benefits of their investments. While this is beneficial to all market players, there are many newcomers who are unfamiliar with the market’s, community’s, and hence ecosystem’s workings.
They are vulnerable to attacks and thefts as they are uninformed of the vulnerability of their cryptocurrency holdings to hackers and criminals and lose a lot of money in the process. This article talks about the types of scams prevalent in the crypto industry and how to avoid them to keep your assets safe.
What Is SIM Swapping And How Does It Work?
I’m frequently asked about emerging cyber risks and how to keep online activities, including cryptocurrency, safe. The SIM-swapping scam is one area that has gotten a lot more coverage recently.
SIM split, SIMjacking, SIM hijacking, and port-out scamming are all terms used to describe a SIM-swapping attack. This post explains how the scam works in detail:
“You might try to log into one of your bank accounts using text-based two-factor authentication. This is when you first log in to your account using your login details. Then your bank provides you a code to continue the authentication and authorization on your mobile device.
Fraudsters, on the other hand, can replace the SIM card associated with your phone number. This gives them authority over the mobile number, allowing hackers to gain access to funds and financial information.”
By providing the cyber attacker’s access to your messages or phone conversations, this strategy defeats two-factor authentication. The bad guys must persuade your mobile operator that the demand to transfer SIM cards that are issued in your name.
The FBI urged financial and crypto firms to check the source of emails and keep an eye on newly created accounts, while those purchasing bitcoin and cryptocurrencies were advised to use multi-factor authentication — which means they should have access to at least two or more devices or accounts connected to the platform—avoid install requests, remote access apps, and any unauthorized firm communication channels,” according to the FBI.
Europe SIM swapping: 10 detained in Europe for €82.4 million scheme to hijack celebrities’ phones,” ran another headline from earlier this year: “Ten persons have been arrested in Europe for allegedly stealing phones from high-profile personalities in the US. Sim switching” can be done by deceiving the phone provider with “social engineering tactics” or by utilizing a “corrupt insider,” according to Europol.
How To Protect Yourself Against SIM Swapping Attack
In case you’re wondering, no, this isn’t a new subject, but it is becoming more of a threat as more people adopt two-factor authentication.
“Here are three more indicators that you may have been a victim of SIM swapping.”
You can’t make or receive phone calls or texts. When your telephone calls and text messaging don’t go through, it’s clear evidence that you’ve been a victim of SIM shifting. This indicates that a fraudster has deactivated your SIM card and is utilizing your phone number.
There’s been activity elsewhere, and you’ve been told. If your phone carrier alerts you that your SIM card or mobile number has been reactivated on another device, you’ve been a victim.
You are unable to log into your accounts. You’ve probably been taken over if your login passwords for services like your bank or credit card accounts no longer work. Make urgent contact with your bank and other agencies.
“By adding a PIN passcode to your wireless account, you can reduce the odds of someone getting access to and stealing over your phone number.” Trustworthy platforms allow you to add a Passcode to your phone.
“In 2018, Andrew Schober was electronically robbed of almost $1 million in bitcoin. Schober believes he has identified two young males in the UK who used a smart piece of electronic clipboard-stealing software to siphon his crypto assets after working with prosecutors for several years.
Types Of Scams In The Crypto Industry
Demanding Crypto-Only Payments
It’s most likely fraud if a seemingly trustworthy person or retail business declares they don’t accept any payment other than Bitcoin. Because bitcoin and other altcoins are such a new asset class, analysts believe that reputable institutions will not take crypto without also accepting U.S. dollars via wire transfers, cheques, credit/debit card payments, and cash.
Anyone requesting payment in Bitcoin may be attempting to store it and profit from its increasing value. Blockchain, unlike banks, lacks standard know-your-customer (KYC) processes. This means that consumers can access their wallets without needing to show legitimate identity, a Social Security number, or their address and telephone number information. Despite the fact that blockchain is accessible to the public and creates permanent, public records, individuals can transact on it anonymously, making it easier to defraud you, take your money, and flee.
Games and Digital Collectibles
Skilled coders now have the potential to construct new videogames and entire imagined worlds on the blockchain, as we saw with the “Squid Game” fraud. And to accomplish it before the next Netflix sensation takes off.
Getting eager blockchain beginners to purchase a type of newly produced cryptocurrency or tokens for a game is a simple way to defraud them. If enough people push up the price due to supply and demand, the original con artists can sell all of their assets and vanish in a move known as a “rug pull.”
On the blockchain, unlike banking accounts for government-regulated currency, there is no fraudulent protection or FDIC insurance. The only method to get your funds back when it’s stolen on the blockchain is for the receiver to pay you directly. That’s exceedingly unlikely on a decentralized platform. While big crypto exchanges have greater fraud security procedures than lesser-known exchanges, investors are still at risk of losing their funds.
Schemes For Investing In Cryptocurrencies
New types of cryptocurrency are continually being created, and when new currencies are released onto the blockchain, it’s referred to as an initial coin offering. However, ICOs can also be used to perpetrate fraud. A corporation or a person may claim to have a once-in-a-lifetime chance to invest in a new kind of cryptocurrency with assured 1,000% returns. They may then try to persuade you to deposit a large number of fresh coins into a digital wallet that has been hacked, or to “pump and dump” by buying the cryptocurrency and selling when the price skyrockets.
Scams In The Romance Industry
Crypto frauds abound on dating apps. According to the Federal Trade Commission, around 20% of the funds lost in romance frauds from October 2020 to March 2021 were transferred in bitcoin. Long-distance or digital connections are used in frauds like this, in which one party presses and persuades the other to buy or provide money for a new cryptocurrency that is really simply a technique to rob people.
Fake Apps For Mobile Devices
Fraudsters also use bogus apps accessible for download on Andriod Play Store and the Apple App Store to deceive cryptocurrency traders. Although investors can typically immediately identify and delete bogus apps, this doesn’t imply the apps aren’t having an influence on many businesses. Thousands of individuals have downloaded bogus cryptocurrency applications already.
While Android users are at a higher risk, every trader should be informed of the possibilities. Are there any glaring spelling errors in the copy, including the app’s name? Is there an illegitimate look to the branding, such as odd color or an erroneous logo? Take note of this and think twice about downloading.
Inappropriate Tweets And Social Media Posts
You can’t be sure you’re not following imposter accounts if you follow famous people and businesspeople on social media. The same is true in the cryptocurrency world, where malevolent, impersonating bots abound. Don’t believe offers from Facebook or Twitter, especially if the outcome appears to be unattainable. Fake accounts can be found all over the internet.
If you provide someone on these networks even a modest bit of your cryptocurrency, you’re unlikely to get it back. Don’t assume that because others are responding to the offer, they aren’t robots. You must exercise extreme caution.
Giveaway Scams
Scammers are making use of social media to spread their giveaway schemes. They upload screenshots of fabricated company and management correspondence advertising a giveaway with links to bogus websites. Fake profiles will then reply to these comments, confirming the legitimacy of the hoax. After then, the bogus websites will ask you to “verify” your address by transferring cryptocurrencies to the scam giveaway.
Under the premise of address verification, don’t ever send cryptocurrencies to giveaways.
All promotions and deals found on social media should be taken with a grain of salt. Pictures in reply messages should not be trusted since they might be falsified and manipulated.
Do some homework on any entity that is courting you on social media using your search engine of choice. If an offer appears to be too worth a try, it most likely is.
Here is a list of four such techniques that every crypto trader should incorporate into their daily routine to ensure that they have covered all of their areas.
How To Avoid These Scams?
Install An Offline Wallet
To use an online wallet service, which is commonly supplied by an exchange, is among the most common blunders newcomers make when entering the world of bitcoin trading. Since it is present on the platform, it is the simplest to establish and use, but it is also the most vulnerable to hacking.
The reason for this is that all bitcoin assets on an exchange are stored centrally, creating a honeypot of currencies. Making it appealing to hackers and, as a result, making clients targets. An offline wallet is the most secure way to store your cryptocurrency holdings. The offline wallet can be accessed via your computer, mobile device, or specially designed hardware.
Cold wallets, contrary to hot wallets, are not linked to the web and hence are not vulnerable to cyberattacks. Keeping your secret keys in a cold wallet, also called a hardware wallet, is by far the safest choice because these wallets are encrypted.
The Japanese exchange BITpoint identified an unlawful $32 million withdrawal from its hot wallet in various cryptocurrencies involving over 50,000 customers in 2019. BTC, Bitcoin Cash, Eth, Ltc, and XRP were among the five cryptocurrencies kept in the exchange’s hot wallet.
Use Authentication On All Levels
When you remove your cryptocurrencies from an online wallet, you are reclaiming authority over their administration and security. Most internet wallets are password-protected, which means they can be easily exploited and passwords retrieved. So, if you’re going to utilize an offline wallet, ensure it has numerous stages of authentication before you can access your funds. The benefit of having numerous stages is that it takes lengthier to break them, which reduces the incentive to hack. Make every possible effort to protect your precious assets.
Remember Your Private Keys
If you’ve done everything right up to this point, you’re the greatest risk to your crypto assets and holdings. We all forget passwords and pin numbers, and there’s a good chance that you will as well. So it’s a good idea to have a backup of your passwords. And, as dramatic as it seems, keeping a tangible duplicate of your secret information and passcodes in a deposit box might not be a bad idea.
Diversify
You can spread your bitcoin investments by using numerous wallets because there are no restrictions on wallet creation. Use one account for daily transactions and another for everything else. This will safeguard your cryptocurrency assets and reduce the risk of a security compromise.
Along with the significant concentrations of volatility in the cryptocurrencies, there is also the possibility of a corporation that manages a specific cryptocurrency going out of business due to bankruptcy or other causes.
So, while trading in crypto coins, having a good understanding of what the market has to provide is a good idea. As a result, you’ve made potential investments in all of the market’s leading participants, enhancing your prospects of making a fair profit.
Make Use Of A Secure Internet Connection
Only use secure internet service and avoid social Wi-Fi networks when trading or conducting crypto payments. Use a VPN even when connecting to your home network for added security. Your Internet address and location are changed using a VPN, which keeps your internet behavior safe and confidential from bad actors.
Keep Your Personal Device Safe
To protect against newly identified vulnerabilities, ensure your personal devices is up to date with the newest antivirus software. To prevent hackers from exploiting the flaw by building programs to target the vulnerability, use a robust anti-virus and firewalls to increase your device’s security.
When it comes to security, the value of master authentication cannot be overstated. According to research, 3 quarters of millennials in the United States use the same passcode on more than ten different devices, applications, and social media platforms. The majority of them were also using the same password in over Fifty different sites, according to the report. Ensure you have a strong, complicated, and difficult-to-guess password that you change on a routine basis. If you have many wallets, use different passwords for each. For added protection, use 2-factor authentication (2FA) or multi-factor authentication (MFA).
Avoid Being Scammed
In the bitcoin industry, phishing attacks using harmful advertising and emails are common. When performing crypto transactions, be cautious and avoid any questionable or unknown links.
In a recent bitcoin theft, the cyber group “CryptoCore” used spear-phishing tactics to target cryptocurrency exchanges. Since 2018, attackers have targeted organizations in the United States and Japan, stealing cryptocurrencies worth $200 million in 2 years. Before launching a spear-phishing attack, CryptoCore conducted a research phase to discover the email accounts of the crypto exchange’s staff and security executives, according to ClearSky. Fake domains mimicking related organizations and employees were used in these assaults, as well as malicious links included in documents sent by email.
Final Thoughts
The crypto sector is always changing, and it is solely your obligation to safeguard your digital cash by safeguarding your wallet with necessary security features. Keep up with the most recent security news, attack methodologies, and defense strategies. SIM switching is gaining a lot of attention around the world as more high-profile events, often involving millions of dollars, come to light without a clear finger of blame being pointed at any single financial bank or online corporation. As passwords become increasingly obsolete in favor of identity management in the future years, we must all be prepared to construct security around the products we already own, such as smartphones. Contrary to popular opinion and media misinformation that phishing, theft, and losses are a feature of the bitcoin industry, cryptocurrency traders can take a number of precautions to protect their investments.
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