Over the last few years, the global financial space has been taken over by cryptocurrency, and at some point, you must have heard about cryptos. Bitcoin is the most popular, but a lot of other coins known as “Altcoins” have sprung up and are gaining attention. One of those coins is Ethereum. A lot of people continue to invest in these coins every day due to one single fact – it is believed that these coins have huge potentials to be profitable over time.
The risk in dealing with Cryptocurrencies such as Ethereum is not only its volatility; getting scammed is another risk. You can stay on top of the risk factors by knowing what Ethereum scams to watch out for.
1. ICO Fraud
ICO or Initial Coin Offering is used to introduce a new cryptocurrency. ICO is a very risky venture in itself, and it is quite the breeding ground for scammers and fraudsters. ICO scams can happen in two ways:
- Scammers create a fake ICO, get people to invest, and disappear with the money.
- Scammers impersonate a real ICO and get investors to invest in them rather than the real company. This is very common as it happens to even big companies.
Before you invest in an ICO, do in-depth research. CoinDesk is a good place to check the legitimacy of ICOs.
Phone Porting, also known as Cell Phone Identity Theft is carried out by having scammers take over the phone number of an individual through the mobile service operator or provider. Once they have gained control of the phone number, they use it to reset the password to a digital wallet to gain access to the wallet. Once they have gotten into the wallet, they proceed with draining it.
To be safe, update your account with your mobile service provider to include a verification question and unique PIN. Also, in your digital wallet, make use of a third-party service like Google Authenticator.
3. Fake Wallets
You have to store your Ethereum somewhere, and it is very convenient to download a wallet application to your device. Sadly, one of the easiest ways to lose all of your Ethereum is through the use of digital wallets. A hardware wallet is more advised and if you must use a digital wallet, make sure it has been around for quite some time and has a lot of great reviews.
Malware is almost unavoidable when it comes to using computers. Recently, some malware has been infecting computers and specifically targeting cryptocurrency. This malware is only meant to steal Ethereum and other cryptos. They either steal your login details or take over your wallet completely.
To be safe, do a security scan of your computer frequently, install a good antivirus, and use a strong VPN connection during transactions.