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Some Tips how to Avoid Scams

Cryptocurrencies have always attracted all kinds of criminals. There are many ways that fraudsters try to steal the assets of cryptocurrency holders.

Problems of centralized platforms

Although many crypto-enthusiasts believe that centralized exchanges (CEX) are safer, history often shows that they are quite vulnerable to attack.

The reason for the increased attention of various kinds of fraudsters and hackers is that centralized exchanges hold large sums of money in their accounts.

Due to the centralized storage of users' assets in the same accounts, such exchanges can be attractive targets for cybercriminals.

If an exchange's security measures are not good enough or are compromised, user assets can be stolen and irretrievably lost.

Another risk with centralized exchanges is the potential for fraud or improper management by their operators.

Centralized exchanges have a single management system, which makes them more susceptible to insider fraud or other forms of misconduct.

Such actions can lead to loss of funds or other negative consequences for users.

Over the past year, the collapse of large centralized trading platforms such as FTX and Celsius has led more and more users to choose to store their digital assets on their own in decentralized wallets or DeFi platforms.

Risky financial management and potential fraud committed on some platforms has caused many people to lose trust in them as safe places to store crypto assets.

Self-storage gives users full control over their assets and can potentially provide a higher level of security.

However, self-storage also has its risks, especially in the case of fraud.

Types of fraud and how to avoid them

  • Pig butchering

One type of fraud associated with cryptocurrency is called "pig butchering."

"Pig butchering" takes place when the scammer stays in touch to establish a relationship with his victims, promising them various benefits in order to persuade them to invest in pyramid schemes.

The scammer tries to get as much money out of the victim as possible, often using fake investment sites that promise great returns and using social engineering tactics such as intimidation to get more money out of the victim.

Social engineering uses psychological manipulation tactics to exploit human trust combined with curiosity, extracting money from users.

  • Hacking and taking control of the social media accounts of celebrities

Cybercriminals in the cryptocurrency industry often seek to steal crypto assets by hacking and taking control of the social media accounts of celebrities.

Between May and August 2022, hacking social media accounts on Twitter, Discord and Telegram led to a number of loud scandals. During these attacks, scammers post malicious phishing links to non-existent tokens or NFTs, compromising known social media accounts.

Once the scammers gain access to a highly rated account, they use the account to send phishing emails and viruses to a huge number of people, trying to trick them into transferring their personal keys, login credentials, or other sensitive information.

The ultimate goal is to gain access to the victims' assets and steal the cryptocurrency the person owns.

Subscribers to celebrity accounts can be scammed by clicking on malicious links that steal tokens from their wallets.

Fraudulent actions can be aimed at getting users to invest in a trading platform or other cryptocurrency project that is actually a pyramid scheme.

This often results in victims losing their deposits with no way to get them back.

The volume of scams, hacks, blackmail and other fraudulent activities has been growing exponentially over the past few years.

  • Ponzi schemes

Most of the platforms offering easy earnings and high profits are Ponzi schemes.

Despite their seeming diversity, such projects have the following features: they advertise non-existent profits, have referral incentives similar to pyramid schemes, or pretend to be legitimate trading platforms.

Fraudsters using such phishing tactics may encourage users to sign smart contracts that transfer their wallet assets without the user's consent.

  • Smart contract errors

Users can lose their tokens if the smart contract contains errors, vulnerabilities, or is designed to benefit only the owner of the contract. For example, if it allows its creator to take control of tokens in order to sell them, users could lose cryptocurrency by signing it.

In most cases, users don't know they've lost their tokens until it's too late.

Conclusion

Self-storing tokens in a decentralized wallet can be a great way to take control of your assets, but it's crucial to know and understand the risks and take steps to protect yourself from the risks and the vast number of scammers.

To keep yourself safe when using a decentralized wallet, it's crucial to use secure storage measures such as updating software, using licensed anti-virus software, and using unique passwords.

You should also use hardware wallets, such as Ledger or Trezor, to store your cryptocurrency. Hardware wallets are physical devices that store your private keys offline. It means a hacker needs to get physical access for certain interactions with the blockchain, which makes them less susceptible to hacking.

Non-custodial wallets are one of the best ways to secure your monetary investments. One of the best non-custodial wallets is OWNR WALLET, which attracts not only security, but also ease of use and a large number of supported cryptocurrencies. 

Remember your passwords are in your hands, and it's up to you to keep your passwords and the funds you have on them in a safe place.

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