A Look at Cryptocoin Scams

bitcoin_smallScammers are taking advantage of the allure of new cryptocurrencies to trick people who want to get in early on the next Bitcoin, according to Naked Security. Criminals set up Initial Coin Offerings (the cryptocurrency version of an Initial Public Offering, or IPO) and invite people to invest in their new currency while it’s still cheap. The scammers then set up websites that falsely show their victims’ cryptocurrency investments growing in value, while pocketing the money for themselves.

This creates a perfect environment for pyramid and Ponzi schemes. The scammers often impose investment period restrictions so the victims can’t withdraw all of their money at once. In some cases, the fraudsters will allow investors to withdraw a certain amount of their investment to make them feel like they’re earning something and to encourage them to spread the word. In reality, this money is either part of the money they put in or it comes out of the pockets of other investors.

Naked Security notes that unlike IPOs, there are barely any regulations around Initial Coin Offerings. In order to avoid being scammed, investors should be wary of offers that seem too good to be true, and they should seek advice from a knowledgeable source who isn’t already involved in the scheme. If you’re at all in doubt, play it safe and assume it’s a scam. New-school security awareness training can give your employees a sense of skepticism so they can avoid losing their money to scams.

Naked Security has the story: https://nakedsecurity.sophos.com/2019/11/22/why-do-cryptocurrency-scams-work-and-how-do-you-avoid-them/

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