Published by FrankNez Team.
It can be devastating and even embarrassing to fall for a crypto scam. However, it happens to a lot of people.
In fact, in 2021 alone crypto scams cost Americans roughly $1 billion dollars in loss, with more than 46,000 people affected.
In this helpful guide, we’ll share the basics of what a crypto scam is and the steps to take if you’ve fallen victim to it.
What Is a Crypto Scam?
Crypto scams can take many forms.
In short, they are when someone is deceived, leading them to invest money in a fraudulent cryptocurrency or scheme.
In some cases, the scammers may never have any intention of investing your money for you.
It’s possible they could just take the money you transfer to them, and then stop replying to you.
The methods to win over your trust can include:
- Establishing a fake website;
- Imitating a legitimate cryptocurrency;
- Falsifying celebrity endorsements;
- Guaranteeing a profit on your investment;
- Speaking to you over the phone.
- And more.
For You: How to Invest in Crypto for Beginners
Proving You Were Subjected to A Crypto Scam
Crypto scams are a crime and should be reported to the relevant authorities.
For example, US residents can file a complaint with the Internet Crime Complaint Center, amongst other regulatory bodies.
Even if you are not a US resident, you can still report the crypto scam to which you have been subjected to these same bodies.
Whilst there is no guarantee you will get your money back, reporting a crime such as this can help prevent it from happening to others.
Some authorities will only act on a report once a certain number of people have made a claim against the same scammer.
Here’s how to provide the necessary evidence for the case.
Screenshot Your Correspondence
You will need to provide evidence of the financial loss you have suffered as a result of the scam.
For instance, you may have initially been contacted by the scammers via email or text message.
Make sure you do not delete this correspondence.
Save Proof Of The Transactions You Make
Additionally, it can be helpful to have proof of any money you transferred to the scammers.
Whilst these financial records may be available online or on your banking app, certain information may be deleted or lost over time.
When taking legal action due to a crypto scam, the process can take longer than your digital financial records last.
To make sure they are safe, obtain a hard copy.
Printing them out is a good way you could do this.
Reach Out To Other Victims
Certain social media platforms may have groups made up of individuals who have been subjected to similar scams.
Some of these individuals may also have had money taken from them by the same fraudsters as you.
You may be able to get in touch with these victims and encourage them to come forward.
This may encourage the authorities to take more urgent action due to the widespread nature of the scam.
Related: List of 4 Best Crypto Exchanges for Beginners
How To Avoid Falling Victim to Future Scams
It pays to be vigilant when it comes to cryptocurrency investment.
There are many impersonators who will try and prey on the unsuspecting online.
Anybody can be deceived by crypto scam artists.
For example, a pyramind scheme scammed investors from all over the world to a total of $300.
The Federal Trade Commission (FTC) also reports that the total lost to crypto scams amounts to over $1 billion since the start of 2021.
The median loss comes to $2,600.
There are certain things you can do to reduce your risk of suffering financial losses in other crypto scams.
For instance, you can:
- Contact the company – Trust your instincts and do this if you think something feels amiss. As well as doing so through channels such as telephone and emails, it can be helpful to also contact them through a more public and transparent platform such as social media.
- Withdraw your investment – You should be free to back out of any legitimate crypto investment. If the company refuses to let you, this should be interpreted as a red flag. You should also never agree to pay any fees to withdraw your own money from a cryptocurrency company. Legitimate crypto organizations will not ask you to do this.
- Seek legal assistance – An attorney can help you when looking to reclaim the finances taken from you as a result of the cryptocurrency scam.
- Trust carefully – Following the advice of someone you have never communicated with in person can be risky. When possible, seek the guidance of someone you can converse with in real life.
- Boost your cyber security – It’s also important to make sure your cybersecurity is kept up to date. Outdated and inadequate security software can make it easier for hackers to access your accounts for nefarious purposes. A VPN is a good way of boosting your cybersecurity. You can download a VPN here to protect your sensitive data.
Act Quickly and Take Protective Measures
Hesitating before reporting a cryptocurrency scam is not advised.
Alerting the relevant authorities to what has happened to you can be more effective when done so as close to the event as possible.
If you wait too long before taking action, then the scammers may be able to cover their tracks.
If they cannot be traced, the odds of reclaiming the money that has been taken from you can diminish.
Make sure to follow the safety tips above to protect yourself from scams in the future.
Once you build your cybersecurity ecosystem, you’ll safeguard your sensitive information from hackers and snoopers.
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