24 March,2022 12:10 PM IST | Mumbai | BrandMedia
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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 for scamming in such a situation. Following are the categories that fall within the ambit of social engineering scams:
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Investment Scams: Investment scams usually take place when a business opportunity sounds too good to be true. Profit mongers usually fall in this trap because they are made to believe that they would gain guaranteed returns on investing a huge sum of money in the business. Many crypto related Ponzi schemes function in this manner. Investment scams include:
Scammers will definitely continue to target the crypto ecosystem as it grows in size and complexity. You'll be able to spot a crypto-related scam early and avoid it from occurring to you if you know the typical ways fraudsters try to steal your data and money. Therefore it is very important to know about how the crypto markets function in a legitimate way and how to not get lured by attractive investment schemes.