If you are new to cryptocurrency, you may be unaware of the many scams out there. Many scammers target cryptocurrency enthusiasts and newcomers because they believe they’re investing in a legitimate asset class. However, these scammers often don’t use their real names. Instead, they use an alphanumeric string for their cryptocurrency wallets. In other words, you won’t be able to contact them by name, social security number, or address.

Younger people are more likely to be scammed

While adults are often more familiar with scams, young people are particularly vulnerable to the schemes. They have grown up using computers and smartphones and tend to be more trusting than the average group. Unfortunately, this makes them easy targets for criminals. According to the FBI, there were 14,919 scam incidents in 2021.

A new study has revealed that people in their twenties and thirties are more vulnerable to crypto scams. The results of the study indicate that people between ages 18 and 34 are twice as likely as those aged 50 and up to be scammed. And while older people generally lose more money, younger people’s losses are less severe and easier to recover from.

Younger people are also more susceptible to romance scams. According to FTC reports, people in their thirties suffer 35 percent of the losses caused by these scams. On average, people in their thirties lose almost $12,000 in romance scams. And the amount of money lost per fraud is also rising.

Social media

The popularity of cryptocurrency has spurred massive increases in scams, and social media has become the prime hunting ground for these scammers. As cryptocurrency transactions are generally irreversible, the lack of legal protections makes people more susceptible to scams. Fortunately, there are a number of ways to protect yourself from these schemes.

Among other ways to protect yourself, you should always be cautious about posts about cryptocurrency, especially on Instagram. These posts are often fraudulent and may not be verified. Despite these precautions, it is still possible to be scammed. A recent FTC report shows that more than half of crypto-related scams originate from social media platforms. Last year, a large number of victims lost $1 billion in this way, and the amount is on the rise. It doesn’t appear that the trend will slow down any time soon.

In addition to creating fake profiles on social media, scammers are also spreading misinformation through legitimate giveaways. Generally, these scammers will impersonate prominent companies or celebrities. They will also spread fake giveaways of cryptocurrencies and NFTs. If you’re suspicious about a crypto giveaway, it’s best to report it to the relevant social media platforms and to the FTC.

Google ads

Crypto scammers are increasingly using Google Ads to target users searching for cryptocurrencies. The ads, which appear on the top of search results, pose as popular sites and redirect users to malicious sites, where they steal their login credentials. This is similar to the classic phishing approach, where an attacker sends an email or text message posing as a legitimate website, to lure users to provide their credentials.

Many of these scammers target the unwary public by redirecting users to a website that asks for a passphrase – the password for a crypto wallet. These websites will ask the passphrase for a new crypto wallet or for an existing wallet, and most likely ask the victim to enter it for the first time on a notepad.

Psychological manipulation

Psychological manipulation is a common strategy used by fraudulent individuals to take advantage of their victims’ trust. Fraudsters are known to manipulate their victims to believe they are offering something they cannot. Their actions not only lead to financial loss but can affect victims’ physical and mental health. A recent study explored the manipulative qualities of fraudsters and compared 34 of them to 31 healthy participants. The researchers evaluated the levels of emotional manipulation, psychopathy, and emotion recognition. The results showed that the fraudsters were less accurate at identifying their victims’ happiness than the healthy participants.

Crypto scammers also use psychological manipulation to lure victims into investing in their fraudulent projects. Interestingly, these scammers target tech-savvy individuals who have invested in various cryptocurrency projects. They spend weeks cultivating their relationship with their victims before bringing up the topic of cryptocurrency. Many scammers use social engineering techniques to trick their victims into investing in a fake cryptocurrency and then wipe their accounts clean.

Extortion

Cryptocurrency is the currency of choice for extortionists, whose use is increasing due to its anonymity and ease of tracking. Criminals often pose as legitimate companies or recruiters to gain access to an individual’s financial details. These impersonations often offer a lucrative remote job and ask for cryptocurrency payments in exchange for training. Some of these scammers are North Korean IT freelancers who try to take advantage of remote job opportunities by presenting impressive resumes and claiming to be based in the U.S. During the recent cyberattack at Wormhole, $320 million worth of cryptocurrency was stolen.

A common method used in extortion emails is to request money from the victim for a compromising video or confidentiality fee. The attacker may even claim that it is a legitimate job and compare it to debt collection. The attacker will then threaten to release a compromising video of the victim unless he or she provides cryptocurrency payment.