Account and asset security are of extreme importance to cryptocurrency traders. Without certain protections, they are vulnerable to malicious attacks. This article is a warning from the exchange Bybit in its quest to provide the fairest trading environment; it will list a few common cryptocurrency scams and explain how to avoid them.
Cryptocurrency Scam--- A warning from Bybit
Have you ever received any suspicious emails or read news about a hack that stole a large amount of money? That is because Cryptocurrency scam exists in various forms, such as phishing, ICOs, fake exchanges, and market manipulations. They are tricky but not unavoidable.
The first and golden rule is: If it looks too good to be true, it probably is. Now the tricky part is that cryptocurrency did provide many too good to be true opportunities to many, but that does not mean that you should jump right in eyes closed, always remain cautious.
One of the best knows scams, Phishing is usually conducted through emails that are disguised as official emails from your crypto exchange or wallet provider. The inside of the email may contain a link that will take you to a site that looks almost the same as the exchange or wallet you usually use. Once you enter your account information on the scam sites, your assets and account information is stolen. Such practice also exists in other areas so you might have already been familiar with ways to avoid it.
What Bybit suggests is to double check the link within the email to see if you are visiting the actual official site and to always doubt the authenticity of anything you receive that requires your information. Don’t ignore the risk reminder from your computer system, no matter how attractive the content of the emails is.
On ScamBitcoin, one user stated his case in details. He claimed that the scammer took all his money from a fake email about an account upgrade. They also tricked him into clicking ads and said that he will get some money for each click. This man has learned his lesson but at the cost of all of his money. Bybit offers customer support through emails and live chat on their website and they send official emails to let users know some important changes or events, but whenever receiving an email always make sure that the address comes from an official email address from Bybit. Check the website address starts with https, not http, and mind the email sender’s account. Also note that Bybit will not ask your private information, as such do not provide them by email.
A similar scam as the one mentioned above is fake exchanges and wallets. They look like a reputable exchange or trustworthy wallet, but their purpose is to steal your money. Bybit suggests you not to rush into registration and to do thorough research of the exchange and wallet. They also recommend browsing their social media accounts like Twitter, Facebook, Medium to confirm their company history and are these accounts well operated, which indicates how large is the crew behind. Further research could be done on Google or other search engines to make sure that the exchanges have been online and active for some time. What’s more, don’t randomly pick a wallet. Make sure to download them from legitimate wallet providers.
Another common scam is market manipulations, which also come in different types. We will choose two of the most comment and explain what they are: pump & dump and wash trading.
Pump and dumps are made by traders with a large amount of money and assets. They gather together to place a vast number of buy orders to drive up the price on an exchange, attracting existing users, more outsiders from other exchanges, or those that are new to the trading world to follow the trend. When the price reaches their expected selling points, they start to dump their coins to gain huge profits from those who continue to wish to enter the market. In this case, the price will rise and fall to a great degree in a short time, causing lots of positions to be liquidated. Several exchanges with a relatively small trading volume have experienced such manipulations. This led to some exchanges taking preventive measures against such manipulations to protect traders interests. For example, on Bybit, they apply a dual-price mechanism to protect the trading environment. On this platform, Liquidations are triggered according to the current spot price, which is extremely hard to be affected on purpose. The exchange guaranteed a fair trading environment and they managed to keep their promise.
Lastly, many traders choose exchanges with a large trading volume because they think these exchanges are harder to manipulate. Actually, the trading volume can be faked, and many exchanges currently do so in cryptocurrency. For example, some exchanges do wash trading, by enabling themselves and others to buy and sell between the same account. Such an act of market manipulation is essentially a fraud to traders, so the integrity of exchanges faking their volume should be doubted.
This concludes today’s article giving you a Bybit warning against common cryptocurrency scams and precautions that can be taken. We hope you learned a lot, enjoyed the read, and stay tuned for more great content.