Bitcoin’s price took a huge strike from $600 to $5,000 back in 2017. Such sudden and high valuation of Bitcoin has resulted in increased interest into alt coins and popularity of ICOs (initial coin offering). ICO brings potential for the companies that had limited access to investors to raise funds for any sort of functional and viable project. The more money is thrown into anything, the more attractive it becomes to frauds and scams. As so it happens ICOs are not exempted from it. The Financial Control Authority (FCA) has announced that some of ICOs could be a scam.
Companies launching ICOs accept cryptocurrencies in exchange for tokens or coins to raise funds for their projects. The coin can either be a share in the certain project or the voucher for company’s future services.
Typical Scams to be Aware Of!
- Fake Bitcoin Wallets
Due to high demand of bitcoin wallets, scammers create fake ones to mislead investors. False wallets bear a name very similar to the trusted wallet, or even shares resembling or same logo. As the result, users download the wrong wallet. The downloaded wallet works for a while and once the amount of cryptocurrency in it reaches particular threshold, it is moved out of the wallet.
Tip to avoid this scam: Download the wallets directly from the link given on the official bitcoin wallet provider’s website.
2. Fake Chat History
To implement the project and attract more investors, companies that launch ICOs use various social platforms. One of them is a chat group like Telegram or Slack. Scammers would copy the whole chat history from original ICO chat and create a fake one duplicating information, usually in different language group.
Scammers in these fake chat groups would display and actively promote their wallet’s addresses where investors, meaning to participate in the ICO, are instructed to send their funds to.
Tip to avoid this scam: Before using any sort of social platform verify if it truly is owned by certain company. In this particular case make sure that it’s the official chat group. You can contact the company’s representatives to get confirmation or relevant links.
3. Google AdWords & Facebook Ads
Crypto-criminals love to use Google AdWords to scam contributors. In order to protect their funds, people who tend to participate in the ICO, should at least research the company’s name on the Google. Users by clicking the fraudulent link are directed to the fake website that bears wrong project address. This way investors who are instructed to send their funds to faulty wallets lose their assets. Similar is the case of Facebook Ads. After pressing on the malicious advertisement link user is redirected to the fraudulent website.
Tip to avoid this scam: Read Google’s preventing & report phishing attacks guidelines.
4. Fake Social Media
Scammers design fake social media pages and domain names that tend to be similar to the genuine ones. In order to create websites as original and trustworthy as possible scammers design resembling social media accounts, purchase followers and make an entire look of fake website beyond question convincing.
Tip to avoid this scam: Before using any social media page, make sure that it is an official one. You can contact the company’s representatives to get confirmation or relevant links if you feel like something is wrong.
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