The head of cybersecurity at Global Asset Management has issued a security alert in response to a rise in cryptocurrency investment scams. Released from the international headquarters in Seoul, Korea, the alert serves as a timely reminder for all online investors and brokerage affiliates.

While many investors of cryptocurrencies like Bitcoin, Polkadot (DOT), Chainlink, and Dogecoin have reaped substantial fiscal rewards, there are a host of cybersecurity issues unique to the crypto trading industry that need to be taken into account when investing in cryptocurrency or using it for online trade. Some of the most common scams affecting investors or users of cryptocurrency include bogus bitcoin exchanges, Bitcoin blackmail scams, and decentralized finance scams. Fraud activity can reach you via email, social media, mobile apps, and instant messaging.

Phony Bitcoin Exchanges

Most countries only allow Bitcoin purchases through a regulated exchange like Coinbase or Robinhood. If you are approached by an exchange that promises to sell you Bitcoin at a cheaper than market rate – or offers zero fees – beware. Recent scams involve fake organizations that pose as established or seemingly credible bitcoin exchange platforms, then disappear after you have purchased the Bitcoin. If you want to purchase Bitcoin through an exchange, make sure that it is registered and regulated.

Counterfeit Cryptocurrency Scams

With so many new cryptocurrencies on the market, it’s no wonder scammers have become adept at creating, launching, and selling new online coins. Developers with even the most basic coding skills can easily create new cryptocurrencies. But just as with counterfeit cash, these types of cryptocurrencies are fake. Scammers use targeted email campaigns and social media posts to lure in targets, often with the promise that it is the latest cryptocurrency launched, and that the entry level is affordable. Once transactions have been finalized these fake companies disappear, costing investors thousands.

Fraudulent Initial Coin Offerings (ICO)

Legitimate cryptocurrency developers do sometimes use an ICO to raise funds for the creation of a new online currency. But the majority of ICO’s are fake, so beware of these investment schemes. Especially be careful of any ICO’s touting that they are the “Next Bitcoin.” Even the most experienced investors should be extremely careful when considering putting money into an ICO. A full diligence check is imperative for any investments of this type.

Bitcoin Blackmail Scams

Cybercriminals have become skilled at creating blackmail scams that demand payment via Bitcoin. Usually these increasingly common scams involve threats to expose secret or clandestine activities the target may have engaged in or been involved with. The best thing to do if you are targeted by a Bitcoin blackmail scam is to ignore it or report it to your local authorities.

Social Media Scams

Online scammers will often use social media platforms like Facebook, Twitter, and Instagram to spread malware. They may interact on the various forums disguised as reputable companies. Some posts promise advice on cryptocurrency investment or free signup bonuses if you click on a link. The link will then contain malware. Posts will often include crypto hashtags and can appear to be legitimate. Never click on a link unless you are confident of the identity of its source.

Social Engineering Scams

Hackers use social engineering scams to manipulate their target to reveal pertinent personal identification details they can use to guess or steal passwords to gain access to cryptocurrency exchange accounts. They commonly disguise themselves as representatives of an online wallet provider to gather this information. Be careful who you trust, and never disclose passwords or pins to your online wallet to anyone.

Decentralized Finance Scams

Legitimate decentralized finance (DeFi) schemes lock in crypto funds over a specified period of time using a smart contract. While these schemes can deliver solid results, they are commonly targeted by hackers, who will empty the account before the investment reaches maturity. If you are considering investing in a DeFi smart contract it is imperative that you complete a full security check of the scheme first.

With the nature of cybercrime activity changing at rapid speeds, it can be impossible to stay informed of the latest threats to online security. However, there are some key things you can do to protect yourself from online scams and fraud. Never click on a link or open an attachment without being certain of its source. If you are interested in investing in cryptocurrency, perhaps consult with your Global Asset Management representative or trusted investment adviser.

If you have been targeted by an online scam or are the victim of online fraud, contact your local law enforcement. Document the name of the fraudulent company, the amount of money transferred, and the date the illegal transaction occurred.

Global Asset Management would like to remind investors never to share passwords online or by phone.

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