What To Know About Cryptocurrency and Scams?

What is cryptocurrency?

Cryptocurrencies, often referred to as digital currencies, are only ever available electronically and the most convenient way to purchase cryptocurrency is with your phone or computer using an ATM cryptocurrency store. Bitcoin and Ether are two well-known cryptocurrencies; however, new types are constantly emerging. Kangs Solicitors is an established and dynamic crypto investigation solicitors firm with branches in London, Birmingham and Manchester. Proud recipients of the highly esteemed Legal 500 Criminal, Fraud and Licensing Law Firm of the Year’ National Award since 1997, we specialize in all areas of criminal law from serious fraud such as VAT/MTIC fraud to money laundering cases as well as significant blue collar criminal matters throughout the US – handling some of the largest legal proceedings ever seen here in recent years.

How do people use cryptocurrency?

Cryptocurrency can be used for various reasons, from fast payments and avoiding bank transaction fees to providing anonymity. Some individuals even hold cryptocurrency as an investment hoping that its value increases over time.

How do you get cryptocurrency?

One can purchase cryptocurrency via an exchange, application, website or cryptocurrency ATM. Certain people also earn cryptocurrency through “mining,” which requires sophisticated computer equipment to solve complex math-based puzzles and earn it this way.

Where and how do you store cryptocurrency?

Currency will be stored in a digital wallet that could exist on the web, your personal computer or even external hard drives. A digital wallet is simply an address for its wallet that usually includes letters and numbers; should there be an issue with either your cryptocurrency accounts (for instance if an exchange platform closes unexpectedly and requires you to transfer to someone unintended or your password for your digital wallet is lost or stolen) nobody will be able to help recover it from you.

How To Avoid Cryptocurrency Scams?

Scammers are constantly looking for new ways to take your money using cryptocurrency, so to stay safe in this space there are a few things you should keep in mind in order to prevent frauds in this industry.

Scammers typically demand payments in cryptocurrency as this allows them to avoid traditional banking systems and secure funds faster. Any legitimate business should never require you to transfer cryptocurrency before doing business – such demands are always frauds!

Only fraudsters will promise high returns or profits. Don’t trust any claims that claim that cryptocurrency markets can help you quickly and effortlessly make money.

Avoid mixing online dating and investment advice together. If someone you meet on a dating app asks how you should invest in cryptocurrency or for you to give them crypto, that could be fraudsters trying to con you into giving over your crypto assets to them.

Cryptos may not always be easily detectable as targets of frauds. Therefore, any cryptos-related schemes that appear suspicious should be carefully investigated before being undertaken by anyone.

Scammers employ time-honored scam techniques, but now they’re asking victims for payments in cryptocurrency. Investment scams are among the most prevalent ways scammers use to convince victims to purchase cryptocurrency before sending it off to fraudsters. Scammers may also pose as businesses, government agencies or even lovers when conducting these schemes.

Investment scams

Scams for investment often promise that you can “make lots of money” with no risk, often starting on websites, social networks and apps such as online dating services or apps. Scams usually involve sending an unexpected text message, email or even phone call which claims that cryptocurrency will help both investments as well as payments methods.

Here are the top investment frauds and how to spot them, along with tips for how to recognize these types of schemes.

“Investment managers” contact you from out of nowhere with promises to grow your funds by purchasing cryptocurrency and depositing it into their online account. While the website they take you to appears authentic, their claims and investment account are both entirely fraudulent; you are unable to withdraw your funds even with payment of fees imposed.

Fraudsters often pose as popular celebrities to increase the value of the amount you give them; but, without communicating through social media. If you click an unknown link that sends cryptocurrency directly to a celebrity’s QR code or into an unknown wallet account, all of it goes straight into scammer hands and disappears quickly.

Web-based “love interests” who ask you for money or crypto in order to help invest can be dangerously misleading; any time someone meets through an app or dating site requests money, or gives advice regarding investing, be wary. Any offer to assist in investing crypto will most likely end in deceitful theft; should you transfer them any cryptocurrency, it will likely disappear without trace, leaving no traceable trail for recovery.

Scammers make grand promises about making money quickly or offering huge profits with guarantees of returns – none can guarantee this in real-time and there’s no “low risk” cryptocurrency investment available to people who make such claims, therefore any firm or individual claiming they will generate profits is likely engaging in fraud, even if their claims include endorsement from an influential person and testimonials from satisfied investors that could easily be faked.

Scammers frequently claim they offer “free money”, usually cryptocurrency or cash; however, these promises of unearned income are usually false.

Scammers make grandiose claims without providing sufficient proof or explanations, and when making investments it’s wise to research their process and inquire as to where your money is being sent. Honest investment professionals or advisors will gladly share their knowledge while backing it up with specifics and details.

What Makes Cryptocurrency Investigations Challenging?

Law enforcement officials and accountants alike have found investigating cryptocurrency investigations to be extremely complicated due to its newness, unregulated nature and rapid transfers between accounts – as well as frequent innovations within this field emerging rapidly.

One of the more challenging and important components of cryptocurrency research can include using strategies such as P2P networks and encryption technologies to shield identities of parties involved in transactions by hiding identities through privacy currencies or nested exchanges.

As discussed previously, tracking cryptocurrency back to its owner can be challenging; new methods developed for increased anonymity only complicate this investigation process further.

Types of Cryptocurrency Fraud

Fraud in the cryptocurrency industry is an ever-expanding field, with various scams related to cryptocurrency popping up all the time. Common types include:

Financial Crime

Money-laundering, tax evasion and other types of financial misconduct.

Fraudulent Initial Coin Offerings (ICOs)

First time anyone sold cryptocurrency via an initial coin offering (ICO), known as an initial public offering (IPO), fraud was committed.

Market Manipulation

Targeted attempts to manipulate markets for profit.

Ponzi Schemes

Uninformed investors may become victims of Ponzi schemes.


Cryptocurrency theft includes hacking into wallets and creating fake exchanges to launder funds stolen in this manner.

Fake Crowdfunds

When launching a cryptocurrency, their creator may choose to crowdfund to raise money and collect contributions for it. Unfortunately, it’s possible for this money to disappear overnight and create fake crowdfunding opportunities that are never realized.

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