What are the Types of Cryptocurrency Fraud?

Since operations with cryptocurrency are not legal, this reduces the responsibility for fraudsters, which, of course, they are not averse to taking advantage of.

Among the most common cryptocurrency scams are:

• Fake sites;
• Market buildup schemes (pump and dump);
• Fake apps;
• Fake celebrity recommendations;
• Giveaways;
• Blackmail and extortion;
• Cloud mining scam;
• Cryptocurrency IPO fraud.

Of course, scammers are not limited to these methods, there are other options to deceive cryptocurrency users.

Types of fraud

Among the types of cryptocurrency fraud listed above, for a better understanding, you need to look at some of them in more detail - this will allow you to better understand their meaning.

The first way, and one of the most popular among scammers, is fake sites. Its essence lies in the fact that those who want to benefit create fake platforms on which cryptocurrency is traded. These sites often adapt to existing options, which confuse users. So, domain names are often very similar, which confuses their visitors.

The second way is market buildup schemes. This method is characterized by the fact that scammers deliberately promote one particular cryptocurrency (through email campaigns, as well as on social networks). As a result, in order to earn money, traders begin to buy this cryptocurrency, and, accordingly, it rises in price. After that, the scammers sell the existing assets at inflated prices, and the cost decreases sharply, which means that the cryptocurrency depreciates, and the scammers earn.

And finally, the third method, also very popular among scammers, is fake applications. Fake apps developed by scammers are uploaded to Google Play and the App Store. Since many users do not know that they are fake, they download them for themselves to work with cryptocurrency and, accordingly, incur losses in the process.

Is cryptocurrency safe

In order to answer whether a cryptocurrency is secure, a number of questions should be considered, for example, what is a blockchain  https://www.lition.io/ .

In translation, a blockchain is a chain of blocks, and it is continuous. Blockchain is also called ledger distribution technology. All information about transactions and not only will be stored by independent users, which means that it cannot be lost.

The very name and concept appeared in the Bitcoin cryptocurrency system. That is why the blockchain is associated with the ledger of transactions for cryptocurrencies. Thanks to such a system, data integrity is ensured, data duplication is eliminated, and security is increased.

With knowledge of such a security system, we can safely say that all transactions with cryptocurrencies have a reliable level of security that will ensure a seamless user experience. A direct proof of this is the huge number of cryptocurrency owners.