Staying Vigilant: 5 Crypto Scams to Avoid in the Bull Run Market

The number of crypto users is skyrocketing, with Statista projecting over 800 million investors this year. Crypto coins attract investors thanks to their increasing value and widespread acceptance. In the UK, major brands like Argos, Barclays, and Pizza Express now accept Bitcoin payments.

Beyond retail, digital currencies have also made their way into online entertainment. Many of the UK online casinos to compare now support crypto deposits and withdrawals. This means players can enjoy their favourite table games or try out popular slots online with cryptocurrencies.

Presently, the crypto market is on a bull run, fueled by the approval of Bitcoin ETFs and Donald Trump’s election. As an investor, this is an opportunity to take advantage of the potential market surge that is bound to happen in the coming months. But while doing that, it’s important to highlight some of the risks involved. In this article, we’ll help you identify and avoid crypto scams that could make you lose a fortune during this exciting period.

#1: Phishing Attacks

Phishing threats have always been part of the crypto industry, and it’s time to accept that they are here to stay. A scammer can trick you into revealing sensitive information like private wallet keys and seed phrases. Even worse, attacks could scale up this year, thanks to AI.

Still skeptical? A report by the FBI’s Internet Crime Complaint Center revealed 69,000 phishing-related crypto attacks. USDT was the most targeted digital asset, recording more than $112 million in losses. On top of that, token transfer attacks had a 62% success rate.

Thankfully, phishing attacks are easy to spot and avoid with these tips:

• Don’t click or open ‘urgent’ emails/messages.
• Don’t click links that direct you to malicious websites.
• Don’t share your crypto wallet information with anyone.

#2: Ponzi Schemes

As the market continues to flourish, scammers will develop several Ponzi schemes. These are scam projects that promise investors high-yield returns. For example, in March 2024, South Korean authorities arrested two scammers who orchestrated a $4.1 million fraud.

You can stay safe during the bull run by thoroughly investigating any crypto project before investing your assets. Be cautious about projects that claim to provide high-yield or guaranteed returns. Also, avoid projects that pressurize you to invest immediately.

#3: ICO Project Scams

ICO (Initial Coin Offerings) are legit crypto fundraising methods for new projects. However, millions of investors lose a fortune on fake projects. A 2018 study by Satis Research Group investigated 1,500 ICOs, of which 78% were scams. That’s a collective value of $1.3 billion.

So, how do you identify an ICO scam or fraudulent token sale? It’s simple: stay clear of ICO projects that promise unbelievably high returns. Also, any ICO project with unverifiable members or background is a red flag. Moreover, legitimate projects have a detailed whitepaper outlining their objectives.

#4: Pump-and-Dump Projects

Pump-and-dump schemes have become widespread in the crypto market. In this scam, fraudsters spread misleading information about a crypto project to trigger a buying frenzy. This approach can inflate (pump) the price of an asset before selling it off at inflated prices (dump).

You can identify pump-and-dump schemes by looking at these red flags:

• Sudden or unexplained value increase of an asset.
• Aggressive promotion of a crypto asset.
• Pressure to buy an asset quickly to avoid missing out.

#5: Fake Crypto Wallet Apps

Scammers are creating fake crypto wallets and using them to steal crypto assets and information. For example, in January this year, a fake OKX wallet plugin was found in the Firefox browser store. According to OKX, the exchange platform doesn’t have any Firefox wallet plugin.

So, to be safe, avoid wallet apps or extensions unavailable in official app stores. Carefully read user reviews and ratings to avoid installing a fake wallet app. Also, legit wallets don’t ask for important information like seed private keys and passwords.

Conclusion

These are some crypto scams to avoid in the current bull run. Please educate yourself on these scams and many others to learn how to spot and stop them. Plus, have a risk management strategy like diversifying your investment or setting profit targets. Don’t let your guard down!