With rising inflation and skyrocketing prices, it’s no wonder folks are looking for ways to maximize their money, including cryptocurrency investments. According to reports, digital currencies experienced massive growth over the past decade, with nearly 60 million U.S. users in 2021.

Unfortunately, where there’s money, there are scammers ready and poised to take it. Today, we’ll review a few common investment scams and how to avoid becoming a victim.

Fake Brokers

A fake broker scam involves an imposter posing as a legitimate investment manager, broker, or other investment authority. The fraudster will often solicit their services unannounced, with promises of significant investment growth once you transfer cryptocurrency over to them.

To entice unsuspecting consumers, scammers present fake reports showing triple-digit returns over a short period. Often, these scams originate on social media or dating sites, so use caution when contacted about crypto assets on social media platforms.

For an additional layer of protection, seek independent legal advice or financial advice from a legitimate, licensed financial advisor before making investment decisions.

Fake Crypto Exchanges and Crypto Wallets

Beware of online advertisements promoting inexpensive cryptocurrency exchanges at rates much lower than the current market rate. These fraudsters will double down with promises of huge savings when you buy through their site. However, in order to “exchange” your cryptocurrency, the scammer will require a hefty fee with the promise of larger returns on your money. You may not even realize you’ve been scammed until you try to withdraw funds, only to find out they, along with the scammer, have vanished.

General Investment Scams

Cryptocurrencies aren’t the only investments exploited by scammers. More traditional investments can also attract fraudsters. Investment schemes involve getting you or your business to send money with the promise of a questionable financial opportunity. A scammer claiming to be a stockbroker or portfolio manager reaches out to you regarding investment opportunities with large returns and will typically direct you to a fraudulent website. The bait-and-switch is the promise of big payouts, quick money, or guaranteed returns with little or no risk. Of course, there is no return, and you may not even know it until it’s too late.

How to Avoid Crypto Scams

Like many fraud deterrents, awareness is key. Here are several easy-to-follow tips to avoid getting scammed.

  • Don’t respond to unsolicited contact. Never give out sensitive information over the phone.
  • Don’t click on hyperlinks or attachments from senders you do not know. Dangerous links may contain malware, computer viruses, or links to fraudulent websites.
  • Use reputable companies for your investment needs. Do your research and look up reviews from trustworthy sources.
  • Seek advice from a trusted financial advisor.
  • Look for the HTTPS in the website’s address to ensure a secure website. Website URLs have a lock or key icon that indicates a website’s security certificate has been authenticated. Without this icon, you may be at risk of being on a fraudulent website.
Look for a lock or key icon next to the URL address. This signals an authenticated website security certificate.

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