Cryptocurrency’s popularity has not only attracted investors but has also attracted fraudsters who leave no chance to exploit the opportunities that revolve around scamming individuals and enterprises. Scams involving cryptocurrencies have exploded in recent years because of the cryptocurrency boom. “Therefore, it is very important for an investor to educate himself and think twice before getting involved in any project that seems too good to be true”, says Advocate P.M. Mishra, Managing Partner of Finjuris Counsel FZ-LLC, UAE, Finlaw Associates, India, BCH Consulting, Europe.
As per Adv. P.M. Mishra, Crypto scams are broadly classified into Social Engineering Scams and Investment Scams.
Social Engineering Scams: In this type of scam, scammers employ psychological manipulation and deception to obtain access to sensitive account information. People are led to believe that they are working with a trustworthy institution, such as a government agency, a well-known corporation, tech support, a concerned citizen, a coworker, or a friend. Obtaining trust is the essential aspect of scamming in such a situation. Following are the categories that fall within the ambit of social engineering scams:
- Phishing: Scammers who use this method to scam people usually send an email that directs recipients to a custom-built website where they must submit private key information. Once the hackers obtain this information, they proceed to steal the cryptocurrencies stored in the…
