Crypto, or cryptocurrency, has become very popular in India. It’s exciting for many people because they hear stories of people making lots of money in just a short time.
But like any new and shiny thing, there are always people who want to take advantage of others.
In the world of crypto, scams are everywhere. So, let’s talk about how crypto scams work and how you can avoid them.
How Crypto Scams Work in India?
Scammers know exactly how to play with your emotions. They lure you with flashy investment schemes that promise huge returns.
They use every possible platform to reach you, encouraging you to invest before you think twice.
The trap is set, and victims often don’t realize that they are just a click away from losing their hard-earned money.
So, how do these scammers operate? Let’s break it down and understand the tricks they use to deceive you:
1. The Promise of Quick Money
Imagine scrolling through your phone, and you see a post saying, “Invest ₹10,000 today, and get ₹50,000 back in just a week!”
It sounds great, doesn’t it? You’re thinking, “Wow, that’s an easy way to make money!” This is the hook, and it’s how most crypto scams begin.
They promise you huge returns on your investment – returns that are too good to be true.
These scams play on your desire to make money quickly. They make it sound easy, but in reality, they’re just trying to get you to send your money to them.
2. Ponzi Schemes
A lot of crypto scams work like a Ponzi scheme. This is an old trick, but it still works today. Here’s how it works:
Let’s say someone starts a crypto investment platform. They tell you that you can earn huge returns on your investment, like 20% a month.
Sounds amazing, right?
But here’s the catch: they’re not investing your money. Instead, they use the money of new people who invest to pay older investors.
It works for a while, but eventually, the scammer can’t keep it going. When they stop paying out, everyone loses their money. This is what happens in a Ponzi scheme.
In India, one such scam, ₹6,600-crore GainBitcoin scam, was recently exposed by the ED. The moment the scam collapsed, people lost lakhs of rupees, and the scam operators disappeared.
3. Fake Crypto Coins and “ICOs”
In the crypto world, there’s something called an ICO (Initial Coin Offering). Just like an IPO in the stock market, this signifies a launch for a new cryptocurrency.
Legitimate companies use ICOs to raise money for their projects. But scammers also take advantage of this.
They create fake cryptocurrencies and sell them to people, saying, “This is the next big thing!” They make fake websites, fake whitepapers (which explain how the project works), and pretend like they are a real business.
Once people invest, the scammers vanish with all the money.
An example of this was the “Squid Game” crypto scam, which took place in India, too.
People thought it was a fun crypto project based on the popular Netflix show, but it turned out to be a complete scam. The scammers took all the money and ran.
4. Pump and Dump
Here’s another trick: it’s called the “Pump and Dump” scam. This one is sneaky. Here’s how it works:
First, scammers pick a small, unknown cryptocurrency. They start talking about it all over social media – on WhatsApp groups, Twitter, Instagram, and even YouTube.
They say things like, “This coin is going to explode! Buy it now!” They get hundreds or even thousands of people to invest.
As more people buy, the price of the coin goes up. The scammers wait for the price to go high, and then they sell all their coins.
Once they sell, the price crashes, and everyone who bought in last loses their money.
It’s like a trick where the scammers make money while everyone else loses.
5. Fake Crypto Wallets and Phishing Scams
Crypto wallets are like bank accounts for cryptocurrencies. You use them to store your digital coins. But scammers trick you into downloading fake wallets.
Once you do, they steal your login information and take all your coins.
Phishing scams are similar. Scammers send you fake emails or messages pretending to be from a real crypto exchange or wallet.
They ask you to click a link and enter your details, like your wallet key or password. Once you do, they have access to your wallet and can steal everything.
In India, many people have been tricked by phishing scams, thinking they were getting a reward or a special offer from a popular crypto platform.
How to Protect Yourself from Crypto Scams
Now that you know how these scams work, it’s important to learn how to protect yourself. Here are a few simple tips:
- Don’t Trust Promises of Quick Money: If it sounds too good to be true, it probably is. Real crypto investments take time and effort.
- Research Before You Invest: Always check the project or platform before you send any money. Look for reviews, talk to others, and make sure it’s legit.
- Use Trusted Platforms: Stick to well-known, trusted exchanges and wallets. Platforms like Binance, CoinDCX, and WazirX are popular in India and have security measures in place.
- Be Careful with Links and Emails: Never click on links in emails or messages from unknown sources. Always go directly to the website to log in.
How to Report Crypto Scams in India?
It is always better to protect yourself from falling into the trap of scammers by identifying how crypto scams work. However, if you have been unfortunate and lost your money in any one type of crypto scam mentioned above, then it is time to act.
Register with us and get complete assistance in filing a report. Our team will guide you in following the right protocol that increases the chance of recovery.
Conclusion
Crypto is exciting, but it’s also full of risks. Scammers are constantly coming up with new ways to trick people into losing their money.
By staying informed and cautious, you can protect yourself from falling victim to these scams. Remember, if someone promises you easy money, it’s likely a scam.
Stay smart, do your research, and don’t let the fear of missing out (FOMO) cloud your judgment. Your hard-earned money is worth protection.
