Scams are a part of the crypto world, but they’re not all bad. In fact, learning how a scam works is a valuable way to protect yourself from being taken for a ride.
Attract crypto users with an initial coin offering (ICO).
An Initial Coin Offering (ICO) is a way to raise money for a new cryptocurrency project. You create a new digital currency and sell it to people who want to use the product or service you are building.
An ICO is an unregulated way of raising money for business ventures, and investors are often attracted by the promise of significant capital gains when they are successful (or claims about how much demand there will be for the currency).
Let crypto users do the work for you
One of the oldest scams in the book is also one of the most effective. The scammer will pretend to be a representative from some sort of organization and then ask you for more information about yourself. Then, the scammer will tell you they need this information to verify your identity or claim that they cannot verify your identity unless they have more information. What happens next is up to them, but scammers may be able to use this information against you later on down the road.
One example of this type of scam is when scammers ask users for their credit card numbers to charge an extra fee on top of their initial payment after it has been processed.
Another typical scam example would be when someone asks you to log into their website using Facebook credentials so that they…
