How to Guard against Crypto Scam

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THE ATTACK

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On the 2nd of June 2023, the Leofinance discord server was invaded by a “group of discord hackers” who took control of a moderator’s account and moderator’s power with a view to extort the unaware community members. They posted an announcement and tagged everyone to participate in the scam Leo Airdrop in a website which they created: Leofinance.net.

According to them, you need to connect with decentralized wallets like Metamask or Trust Wallet that also has Ethereum (for gas fees) in it to process the transactions.

An uninformed or unprepared mind will easily take this information as authentic and go ahead to expose their public wallet addresses to these hackers. But the Leo Community stood strong and we were able to inform a good number of people via direct message on discord and tags on threads. Thankfully, this saved a lot of people as the hackers had one of the worst days of their lives, something we call: “bad market.”

This is just a scenario! And we were lucky that the Community repelled the attack. However, there are many more attacks where the hackers seemingly struck a gold mine.

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SCAMMERS ARE EVERYWHERE

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Undoubtedly, there is high increase in the rate at which scams and fraudulent acts are being perpetuated on daily basis. This increase is notably seen in various facets of human involvement especially those that are related to finance. For instance, we see scammers who try to cleverly retrieve the details of people’s ATM card and use for themselves; we see others who make calls to give fake information in order to retrieve sensitive information from people; and we see those who use emails and other social media to perpetrate their own act. It becomes clearer that with the recent advancement in the digital world, hackers and scammers have now devised more technical means to perpetrate their acts.

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CRYPTO SCAMS AND PREVENTIVE MEASURE

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The world of Cryptocurrency is not an exception as scams can come in various forms which are obviously deceptive but they come with mouth-watering offers such that if you are less informed you may fall victim. Thus, it is important that we equip ourselves with the necessary information to keep us well informed so that we do not fall victim to these scam offers or projects.

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1. PHISHING SCAMS

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The Phishing scam method is one of the oldest hacking techniques which involves creating a similar website of crypto platforms, exchanges or wallets so that when uninformed users enter their private details into the login area it takes their information and stores it in the database of the hacker. With this information, the hacker can use the private details of the uninformed user to gain full or partial control of their account. In some cases, such access may also include the possibility for financial transactions, and in this case, the hacker can steal all their funds.

This is the method that was applied by the hackers who took who created the fake Leofinance.net website in order to get hold of people’s addresses, from which they can perform their transactions.

In order not to fall victim to the phishing method, it is important to avoid visiting untrusted sites and clicking unverified links. Also, try to verify if you are in the right website and don’t reveal your private passwords easily.

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2. INVESTMENT SCHEMES WITH HIGH RETURNS ON INVESTMENTS (ROI) – PONZI AND PYRAMID SCHEMES

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There are some investment schemes that offer high returns on investments to those who invest or participate in them. Many of these schemes function as Ponzi or Pyramid and they heavily rely on the influx of new members investing in the system. The investment of the new members will be used to pay up existing members, and this means newer members are needed into the system to pay up those who are due to receive payment. The queue keeps increasing till there are no much new members to invest into the system, and thus, it signals the collapse of the system.

Many of these schemes claim to offer over 50%, 100% to 300% return on investments in few months, and they try to lure new members into their fold. However, believing such investments is at an individual’s risk. Thus, it is important to always watch out for investments that rely heavily on the influx of new members into the system. It is important that you weigh all the risks involved and only invest if you can accommodate the risks if it goes sideways.

In order not to fall victim to such investments it is important to watch your greed level by not getting carried away by the mouth-watering claims. Also, it is important to do your due research before investing in them.

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3. PUMP AND DUMP/RUG PULL SCHEMES

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The pump and dump or Rug Pull schemes are schemes where a team or group purposely inflate a low-market-cap cryptocurrency and hype it in such a way that make it attractive to new investors who may believe it to be a gem token. With this false hype, uninformed people may purchase or invest in the tokens hoping that the value will increase following the hype given by this crew. However, when the new investors pump in their money making the value to increase, the scammers will sell off their holdings bringing down the value to a very low level. When this happens, it becomes a loss for the users because majority of these tokens do not have use cases or future, so they will not survive such harsh fall.

It is very easy to get information on trending tokens from everywhere, especially those who claim to be great crypto analysts. However, it is very important to be mindful of the source of our news/information. On this note, it is important that we shouldn’t involve invest in a project solely based on the hypes or adverts, instead we should always ensure that we do our research – DO YOUR OWN RESEARCH (DYOR), and analyze every project before we invest in them. While analyzing, it is important to consider the whitepaper of the projects, its history, roadmap, technology, development team, use cases and the community as well.

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• Images are mine

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I AM KSAM

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_{I may not be your favourite author, but you can journey with me to help me develop my writing skills. I am always open to criticism, correction and learning 🥰.}