The blooming of blockchain in recent years has contributed to the prosperity of the cryptocurrency market. Investing crypto token is both of high profit and high risk. To better prepare you for investing cryptocurrency, we list 3 sorts of the scams that are commonly seen.
Spam Messages
Scammers have invented countless ways of phishing. When you open your phone, spam messages flood in. When you open your email address, the trash bin in your email box is always full.
These messages usually give you a website link or try to persuade you to write them back. The websites are usually cryptocurrency related services like virtual wallets, exchanges and others. Sometimes they even claim that something is wrong with your existing wallets and accounts and ask you to reset passwords or more. Whatever, the victims are always led to a phishing website that require them with more detailed personal information. And the scammers could use these information to stole tokens from the victims.
You may laugh about these old-fashioned scams but you cannot ignore the fact that still more and
more victims is losing money due to these traps.
What’s more, make sure you are 100% sure that you are using the correct website address before entering user account and password because scammers are really good at imitating original websites that the phishing websites may even look more official than the real ones.
Cryptojacking
This is a tricky one. It invaded your computer so quietly that you may not even realise its existence.
Cryptojacking usually happens in two ways. One is the mining code is sent to the victim’s computer through emails so when the victim clicks the link the worm is planted into his computer and starts to run mining programs quietly. The other is the codes are written into a website so when the victim view the website it infects his computer.
Most of the cryptojacking codings don’t cost you your money directly, only slows down your computer. But some malicious malware could steal your web accounts and credentials and finally cost you more lost. One example is a malware named FacexWorm, a malicious Chrome extension. It was first uncovered by Kaspersky Labs in 2017, at first it was only an ordinary cryptojacking extension that exploit your computer to mine cryptocoins without notifying you. However in 2018, Trend Micro found that it has evolved and can steal accounts and credentials of FacexWorm’s websites of interest. It also redirects would-be victims to cryptocurrency scams, injects malicious mining codes on the webpage, redirects to the attacker’s referral link for cryptocurrency-related referral programs, and hijacks transactions in trading platforms and web wallets by replacing the recipient address with the attacker’s.
Fake ICO
ICO scam is one of the most commonly seen crypto scam.
To explain this in a simple way, first we will talk more about ICO. ICO, which is the abbreviation for Initial Coin Offering, is the most trending way for a crypto project to raise funding in their initial stage. The founder develop a new type of crypto token and sell these token to fund the development of their project, which, most of the time, is a platform. Then they will promote their project online and ask for crowdfunding. At this stage, because the project has not been carried on, the token is only a symbol but with no actual value. ICO promoters promise the value of their token beforehand and if the investors believe in what they promise, they will pay for the token. The token that buyers paid for can be viewed as proofs of shares of profits after the project is successfully launched.
Then the problem comes. If the project is not successful, the investors will turn out to pay for nothing. Or it may turn out that the teams claimed that they plan to do a great blockchain project and even prepared a fancy white book in advance, but in fact they have no intention to do anything in practice or the plan does not even exist.
There have been a lot of such scams happened in the past few years. After successfully raising a huge amount of money, the sponsors vanished with the money of the investors. If we look back into the history of ICO, PinCoin scammed $660 million USD from 32,000 people, believed to be the largest ICO scam ever by the time of this writing. Also, there are also other astonishing scams, for example, AriseBank is said that raised $600 million USD and turned out to be a total scam and OneCoin, rumoured to have stolen over $300 million USD globally before collapse.
HashCoin (HSC), the token of Hashworld ecosystem, was released in early 2018. Hashworld aims to educate blockchain knowledge through games. The core members of Hashworld are from Tsinghua University, one of the top universities in China. They build up a virtual parallel world, and allow the users to play interesting games to obtain digital assets, purchase lands and put their own slogan. It is said the game has attracted more than 1 million users in just 3 months. It maintains good partnership with OKEX and Huobi and would probably been listed on these exchanges soon.
We believe blockchain is truly a promising technology and worth investment. However, we would like to point out the truth that eventually, it is only technology underlies all fancy appearances that determines the future of a crypto project. It is important to look deep into the project before you throw your hard-earned money into it.