infest the space.
Now while some are pretty obvious others are more subtle and damn.
Near convincing scams have to evolve in order to keep their business profitable so they’re adapting and have also been able to con users who may have thought they were immune to it are any of these scams just waiting for you around the corner well that’s exactly what this video will help you find out it’s the ultimate guide to crypto scams as well as my top five list of those you have to watch out for i’ll also give you some top tips in order to avoid falling for scams hacks and other dirty tricks so be sure to stick around [Music] before i get cracking gotta do a bit of yapping although i am an upstanding and strapping chap i am.
Not a financial advisor sorry folks just.
Never took that test hence everything that i say in this video should be considered educational only also if this is your first time here welcome to my humble abode my.
Name is guy and over here at the bureau i cover everything crypto videos like guides analysis reviews.
News overviews and you too can be a part of that all you.
Need to do is hit up that subscribe button and turn on those.
Notifications that way the youtube overlords will let you know the moment i release another video finally i know that you folks are busy so i’ve placed all of these handy time stamps over here use them to jump around to the sections that interest you most i promise i won’t be offended okay folks let’s dive into that murky world of crypto scams the first and perhaps most pervasive scam i want to talk about is the ponzi scheme this is actually older than crypto itself goes back to the 1920s fun fact it was.
Named after charles ponzi an italian who defrauded investors using the method that bears his.
Namesake the basic premise of a ponzi scheme is really pretty simple an operator will usually pay out existing investors with money that’s been brought in from.
New investors basically robbing peter to pay paul the business is.
Not making any legitimate income it creates the illusion of income which may convince many of those who have invested that it could be legit this will continue for as long as there are always.
New investors to bring in capital oftentimes these schemes will also ask the user to refer people this is why it’s sometimes referred to as a pyramid scheme.
Now although the basic mo of a ponzi scheme is pretty straightforward some of them can be hard to identify some ponzi schemes can last for years and dupe even the most sophisticated investors case in point bernie madoff ran one of the longest running and most deceptive ponzi schemes ever his victims were.
Not your average retail investor but sophisticated hedge funds mutual funds and high.
Net worth individuals everyone thought the same thing bernie’s in high demand there are waiting lists to invest with him look at all those other rich folks who trust bernie the emperor really does have.
No clothes anyways there have been a lot of such schemes in the crypto space this is because they are generally easier to set up an exit scam than with a fiat ponzi scheme they also take on a whole host of different guises or fake business operations that allow them to justify those returns they often try and choose seemingly believable methods in order.
Not to raise too many questions i can’t go through all of the examples.
Now but here are perhaps the most well-known front business operations for a ponzi scheme crypto lending platforms with these you’ll supply capital to some platform and they will pay you out a regular stream of interest the mo is that there are borrowers on the other side of that equation who are paying that interest on the face of this it seems like a legitimate business model however the devil is sometimes in the detail if this is a centralized lending service with annualized interest rates that seem completely out of whack it should set your alarm bells off for example in the bit connect heyday they were paying out monthly interest that exceeded 40 this seemed ridiculous and unsustainable particularly for a project as opaque as it was of course we all know what happened to bitconnect another typical crypto ponzi mo is cloud mining the scheme will tell you that the money you invest is earning a steady return by mining cryptocurrency of course the money that you invest does.
Not go towards any sort of mining equipment but just to sustain the scheme there have been a couple of these in the past but perhaps one of the most well known is the bit club.
Network they ran for over five years and were able to take over 720 million dollars from investors there were many people who suspected them of being a ponzi but at the time it was quite hard to prove definitively that they were.
Not investing the cash into mining equipment of course the fbi had access to personal communication and eventually sank that ship another well-known crypto ponzi mo is of course some sort of an investment scheme either they will claim that they can trade the crypto markets or that they have some sort of trading bot that can generate regular returns these are the kind of ponzi schemes that are pretty easy to avoid the reality is that any service that claims to have some amazing trading strategy or trading bot would.
Need your money they could just make money with their trading strategies it’s just a ploy to get money from you in order to pay out earlier investors there have been quite a few of these in the crypto space as well one of the most recent examples is amphix they managed to take in almost 60 million dollars by the middle of this year that was until they pulled an exit scam with the money so.
Now that you have a vague idea of how crypto ponzi schemes work how do you avoid them well the first and most important red flag that you can identify is if some scheme is guaranteeing you a certain amount of returns.
Nothing is guaranteed and these sorts of statements should have your [ __ ] alarm ringing and i know what you’re thinking your mate says that he got his regular stream of said income month after month and he most likely did this is the whole mo of a ponzi scheme to convince the investor that they actually work and hence want to commit more capital heck the investor may even decide to refer our friends and family oh and while we’re on this topic you can usually use this as another ponzi red flag if the scheme offers you bonuses and perks to refer others and tiers those referral levels you should steer clear this is multi-level marketing and it is dubious best.
Nearly every crypto ponzi scheme in the past use some sort variant of this you would have high profile promoters who would be at the top of the pyramid and make money off of those below them oh and don’t be deceived by advertisements or publicity for a particular platform bitconnect advertised on coindesk amphi x advertised on coin market cap and a whole host of other sites heck they even took out billboards ponzi schemes are ad buyers just like any other sort of project in fact they’re probably spending more on ads than legitimate businesses as they.
New victims in many cases advertising platforms media sites and influencers don’t take the time to analyze the product being promoted so yeah think of a ponzi scheme as an empty drum empty drums usually make the most sound on to our.
Next scam and this one is also pretty damn common the infamous giveaway scam quite simply the scammer is trying to convince you to send them money in order for them to send back your money multiplied send us one ease and we’ll send you back 10.
Now despite how silly that sounds these scams are pretty effective they usually frame the promotion as a giveaway by a project influencer or famous person of some type they use popular social media platforms in order to push these scams most of the time this is through impersonation although they do sometimes manage to hack accounts for example you’ll.
No doubt have seen that high-profile twitter hack earlier this year where scammers managed to get into the accounts of joe biden elon musk kim kardashian etc they tweeted the giveaway scam and were able to make almost 150 000 and if you think that was a lot of money it’s chump change compared to what some of the earlier iterations of these scams were able to generate before twitter started clamping down on the bot manipulation tactics scammers were making in excess of a million dollars in a string of these giveaway promotions the elon musk ones were my personal favorite they were sometimes so convincing that large.
News organizations would fall for them the twitter giveaway scams have become less common though as twitter has cracked down on them however scammers have found fertile ground over here on youtube i’m sure you folks will.
No doubt have seen all of those live stream giveaways where they’re featuring an interview of some sort encouraging users to participate users are directed to a website that gives some instructions about where to send funds and how their funds will be multiplied these have been quite effective and more recently they’ve even started using youtube ads to serve these videos this is actually one of the reasons that i don’t run ads on this channel i don’t want to take the risk of ads being served that could defraud users more recently it does appear as if youtube has got a handle on some of these scams however they may crop up in different places so it’s essential that you’re able to spot them and report them they will try and cloak the message in a different way they may use fake transaction evidence and time sensitive pressure tactics they will try to appeal to our emotional love for easy gains and quick promotions however you just have to take a step back and ask yourself this someone is offering to give me free money on the internet is this sensible i’m sure we all know the answer to that question the.
Next scam that i.
Need to tell you about is a phishing scam.
Now this is another attack vector that can be used in multiple different ways the end goal of a phishing scam is to get you to hand over sensitive data so that a hacker can use said data to get access to your crypto phishing scams are also.
Not unique to crypto and have also been used to get into people’s online bank accounts email accounts and other password protected accounts the usual tactic with a crypto phishing scheme is for them to get you to visit a website that you think may be a legitimate service they could be in exchange an online wallet or some other service that requires a password to access the scammers will usually try and use a domain address that looks very close to the official address of the site that you’re looking for either they will move a letter around place a hash alter the spelling or use a different domain extension dot.
Net dot info etc etc the real sneaky ones will even do things like replacing a letter with a.
Number for example here is ledger.com with an l and here is ledger.com with the l replaced with a capital i pretty convincing right the real sophisticated hackers will use what are called homograph attacks these basically use unicode characters from.
Non-latin writing systems like cyrillic or greek they can actually make a domain look exactly the same as the intended one here’s an example of where a security researcher has been able to recreate the apple domain using this random domain over here which i’ve linked to below you can actually check it out yourself by opening this domain in a browser like firefox it takes you to a domain that appears to be exactly the same as the apple domain it’s pretty crazy anyways these domains will usually host sites that look.
Nearly identical to the site you’re thinking visiting this is probably most likely a login panel for the service in question you think that you’re logging into your account when in fact you’re handing over your details to the scammer once they have your login details they’re able to access your accounts and of course do what they want with your coins there are precautions you can take of course one of them is to set up two-factor authentication oh and while we’re on that point make sure that you don’t use an sms-based authentication this is because the fact that hackers are able to launch sim swap attacks which allow them to overtake control of your phone use google authenticator or authy anyways phishing attack can sometimes be much more successful as the attackers sometimes also buy ad space there have been many occasions where they’ll run adwords with the fake domain and google will serve that in the search results just use my simple rule of thumb i.
Never click on the ads even if it’s.
Not crypto related call me jaded but i prefer to focus on those results google is.
Not being paid to present.
Now there is an interesting extension to phishing and that is private key phishing if you’re using a web wallet then this is pretty easy for the scammer however if you have a software wallet they’re going to have to get you to download a malicious wallet and that is a perfect segue into our.
Next scan often the scammer will use a phishing technique in order to get you to download a malicious wallet once you’ve done so they’ll ask you to decrypt the wallet with the private key which then of course means they have access to all your crypto perhaps the most devastating hack that i heard about this year was a poor bloke who lost 1400 bitcoin yep that’s over 18 million dollars it was basically because the user was fooled into downloading a faulty version of the wallet once a malware infected wallet was installed the hackers had remote control and stole the guy’s bitcoin you can read more about the exploit below essentially if you’re using a wallet on your pc make sure that you download it from the official site make sure it is on the exact domain that applies to said wallet don’t fall for those fake domain attacks for example a few weeks ago i saw fake exodus domains that were being presented as ads by google obviously these would have been malicious downloads however there is one more layer of security you can employ when downloading these wallet files and that is what is called a checksum basically this is where you can confirm the digital signatures the developer has uploaded with the software this is for the more technical users though who are comfortable with the command line i’ve linked to a guide below you should also.
Note that this is.
Not restricted to wallets that you download from the official site there have also been examples of fake wallets that have been uploaded onto centralized app stores case in point you had the recent examples of a fake meta mask wallet that was uploaded onto the chrome browser store the scammers will also produce fake reviews and comments to make the browser wallet look legit.
Now i know what you’re thinking guy i use a hardware wallet i’m.
Not susceptible to this hocus pocus well that may.
Not be entirely true you see if you hold a ledger device then there is a reasonable likelihood that you’ve heard about that ledger database breach basically hackers were able to get access to the data emails.
Numbers etc of almost 200 000 ledger users i.
Need to be clear here though this was.
Not a hack of the physical ledger device and there are.
No vulnerabilities in those however the information could have been used to launch a phishing attack on users of ledger devices the hackers sold the data on the dark web a few months ago fellow scammers bought the data and it was only inevitable that we would start to see those targeted phishing attacks called spear phishing over the past two weeks users have been getting emails and text messages telling them that they.
Needed to either update their ledger firmware or ledger live of course they’ll direct the user to a fraudulent domain similar to the ones that i described much like the case with the other wallet malware once you’ve downloaded the forge ledger live it will exfiltrate your seed words and steal your crypto faster than you can say satoshi as i’ve told people before in both my telegram channel and my weekly email the only place you should be updating your ledger is from within the app itself ledger will push all the updates directly to the app oh and apart from this particular spear phishing attack scammers have also used other tactics that i’ve mentioned for those.
New ledger users they’ve either uploaded fake ledger apps into the respective app stores or they’ve run adwords on ledger related keywords this is also.
Not specific to ledger by the way scammers have also tried to fish other hardware devices such as trezor and keepkey you are perhaps.
No doubt wondering whether hardware devices are still safe well i happen to think so they’re much safer than many of the alternatives and even in the case of the ledger breach this was.
Nothing to do with the device it was lacks data security over at ledger just as long as you’re aware of the attempts to fish then you’re already two steps ahead of the hackers on to the.
Next scan and this is another doozy rug pulls and exit scams are.
Not restricted to ponzi schemes but they have been used with great effect through fraudulent icos how these scams operate is.
Not really that hard to understand they try to convince a user to buy a cryptocurrency in an initial coin offering once they’ve done this they hope that it builds momentum and sucks in more users eventually once they’ve pulled in enough users they’ll cut and run leaving everyone else holding the bag the ico variants of these were pretty damn pervasive during the 2017 ico mania there were a.
Number of high-profile icos that managed to pull off daring exit scams however as the interest in icos has recently waned so too have the scammers chosen a.
New target given the craze that we’ve seen in the defy space recently scammers have migrated their tactics to these waters they’ll launch a.
New protocol usually a fork of a well-known one they’ll then offer their own token as a yield farming incentive in order to convince people to supply their capital to the protocol once they’ve reached critical mass the developers dump the token and escape with some of the locked capital.
Now being able to avoid these types of scams is also pretty simple don’t get involved in the first place there is a lot more junk out there than strong projects with good prospects even if an ico or d5 protocol is.
Not a scam there’s also a strong chance that there is a smart contract bug one that either leaves the protocol open to a hack or some other catastrophic failure i am extremely selective when it comes to choosing the right kind of projects to invest in or the type of protocols to yield farm i cover a lot of this in my comprehensive video on picking the right old coin you can watch that right over here so yes you should treat most of these hyped icos and projects as you would drugs just say.
No kids time for the.
Next scan some scams are pretty large in the sense that they target thousands of users this is the case with those ponzi schemes that i talked about earlier however sometimes scammers will give you personal attention they will spend more time with you and try to earn your trust and hopefully get access to your wallet the main mo of this scam is that there’s some individual who can either help you trade mine or earn cryptocurrency in some way there are a.
Number of ways in which they’ll try to get users to reach out to them this will either be through email or a messaging app like whatsapp or telegram for example if you’ve been scouting some of the comments on crypto youtube recently you’ll have.
Noticed a flood of scam comments these are usually inflated by bot likes and comments the comments either talk about some sort of a trader hacker or cryptocurrency they spread faster than covid and i can only imagine that this means they’re being successful it’s also pretty hard to stop the scammers because all they’re really doing is using an email or phone.
Number to convince you to hand over your crypto it’s a modern day variant on the.
Nigerian prince email scam those spam emails you’d get from a far-off prince offering to send you money that he wants to get out of the country similar to the case with the giveaway scam you have to ask yourself if it makes sense you are sending somebody money on the internet and they are offering to make more money for you what could go wrong that’s as much of the scams i wanted to cover today folks the truth is these are just really scratching the surface of all the scams out there the best scammers are those that are constantly innovating their dastardly schemes however they all follow a similar mo they’re either appealing to your greed or your fear they’re expecting you to make a quick decision without thinking things through with a fresh set of eyes the simple rule of thumb that i always use to cut through the crap is this does it sound too good to be true well if it does then you can be pretty damn sure it is when it comes to phishing and wallet scams you just have to be extra careful when downloading wallet software and visiting particular sites forewarned is forearmed and speaking of scams i’ve become aware that there are many of them out there that are trying to impersonate yours truly.
Now i know that imitation is the sincerest form of flattery but it’s.
Not cool when they’re trying to use my likeness to defraud you good people so tell those scammers to piss off and of course stay safe my dears that’s it folks my rundown of some of the crypto scams you.
Need to be very careful of but of course there may be many others out there so i’m keen to hear.
Now from you any other dangerous scams and if you want to highlight any questions you have for me feel free to fire them below also if you folks found that helpful then let me acquaint you with that like button down there turn that baby blue and don’t forget to subscribe i’ll have another video for you real soon thank you for being a loyal member of my community i want to give back to you lovely people to show my gratitude every week i share an email of my personal insights into the crypto market this covers everything from hot coin picks to market analysis and it’s where i also share the breakdown of my personal portfolio so do you want to join me smashing just head on over to the description and you will find a link to my signup form then you just insert your email and hit submit you will just.
Need to confirm your email and hey presto you are a member i’m working on my.
Next mailer as we speak