with the recent trend of high crypto scams, investors all over the world are getting scammed. Here’s why.
2021 witnessed an all-time high in crypto-related crimes, with scammers getting ahold of US$14 billion in cryptocurrency. The rise in fraud and scams correlates to the immense growth of activity within cryptocurrencies worldwide. Starting from Squid game coin to Ape coin airdrop there have been so many scams and still, now it is going on. Let's explore why crypto investors get fooled easily.
All About Squid Token Scam
A new crypto coin inspired by the popular South Korean TV show ‘Squid Game’ made rapid strides in the markets. Unfortunately, less than two weeks after its launch, the coin turned out to be a major scam.
Most recently, BBC news reported that a token named SQUID stole US$3.38 million from crypto investors in a large-scale scam. A crypto token is a currency similar to Bitcoin and Ethereum, but some of the projects are created to innovate and build new technologies, while others are there for fraudulent purposes.
The most significant loophole in the token was the absence of an option to sell the coin. While investors could buy the coin, there were no avenues to sell them. Given this, no matter how much the token gained, the investors had no choice but to opt for a cash-out.
The Worst Tragedy for the Investors
Before investors and experts could expose the scam, the creators drained all the liquidity from the coin and shut the shop. Nevertheless, some investors flagged the creators of the coin as having been seemingly rug-pulled on social media. It was only after this news made the rounds that it came to light that the website SquidGame.cash was unavailable. The concern grew somber when all social media accounts of the business were unavailable too.
What is an NFT Airdrop Scam?
What happened in this scam is that the hacker repurposed an old unused Twitter profile with a blue check, bought followers, then uploaded some Ape NFT pics.
Then they created a website, as anyone can do, especially with a less common domain extension like a dot. art, dot.biz, or dot.io. Anyone can set up a website as long as it hasn’t been claimed yet if it has, adding a hyphen can fix that too.
On that website, unsuspecting victims are prompted to ‘connect their wallet’, and if they do, their NFTs and any crypto funds are instantly drained and stolen.
Several crypto traders on Twitter noticed the scam had taken place as NFT and crypto transactions on the Ethereum blockchain are logged on Etherscan.
The scammed investor lost a Bored Ape Yacht Club NFT worth 102 ETH (US$316,000), a Mutant Ape Yacht Club NFT worth 23.4 ETH (US$72,500), and other NFTs, totaling over half a million dollars in losses.
Why do Crypto Investors Get Fooled Easily?
Cryptocurrencies, especially Bitcoin, Ethereum, and Dogecoin, have taken the world by storm, especially in the last year. It is becoming more mainstream, allowing users to buy goods and services with it, or trade them for profit, just like the real currency. Having said that, there have been several ups and downs as well as some critical questions around the future of cryptocurrency. One such question is whether these digital tokens can be stolen, hacked, or scammed. Just like fiat currency or cash, these can also be potentially stolen, so naturally, you need to take a few basic steps to keep yourself safe.
The fact that cryptocurrencies aren't regulated makes their users even more susceptible to scams and hacks, but there are ways you can always be sure if an individual or an entity is genuine in approach. The responsibility, mind you, is on you to ensure that you aren't scammed.