If anyone would have asked me last year where I thought crypto would be today, there is no way I would have answered with anything but glowing reviews and positive outlooks. Crypto not only had massive growth in its overall market cap value last year, but the number of new users was nothing short of phenomenal. At one point, the overall market value reached $2.5 trillion dollars – a new all-time high. It also saw 140 million active user accounts double to over 300 million by year’s end. Unfortunately, there were also hundreds of new cryptos being created daily. This is unfortunate because this activity hurt the crypto universe. Not only does it hurt the credibility of crypto as a potential asset class (because it would be impossible for over 15,000 different cryptos to all serve a viable purpose,) but the opportunity to scam others out of their hard-earned money is an easy draw.
Because crypto is extremely easy to buy, many users jump right in without knowing much of anything about what they are buying. Often, the research comes later when the purchased crypto doesn’t perform as expected (example: like turn into a million dollars within a couple weeks). Not only did it not shoot straight up like your source told you it would, but it went the other direction, down. Only now that you are on the losing end do you decide to investigate what it was you bought. Having that little understanding of what you are getting into is a recipe for disaster and scammers know it. Crypto is easy on the surface but has a lot of nuances to really understand the ins and outs involved. If you believe crypto has a real chance at mainstream adoption, you owe it to yourself to give it that chance by taking the time to actually learn it. While learning, give extra time to researching all the different scams and schemes that have happened and are currently happening in crypto. Knowing what to look for and what to avoid is key. This is the focus of this article.
People in crypto are dizzy right now from the rapid losses they have experienced in their portfolios. 51% of Americans that own crypto, have bought it within the last 12 months. This means that most of them, bought in during the hottest run that crypto has ever had. If the bulk of them held their portfolios throughout the year, they went for some crazy rides up and down that would make for one wild roller coaster. Take a snapshot of today and we’ve seen inflation sprint to the forefront of all things economically related. Here in the U.S., we are now experiencing inflation rates we’ve not seen in 40+ years, and that’s if you believe the figure is accurate. We’ve printed our money into debt oblivion and our Federal Reserve has been forced into action. The effort to save our financial system starts with pulling back the reigns on quantitative easing – and how is that done you ask? Raise those interest rates! This is causing contraction on a vast scale and although it should be, crypto isn’t immune.
Not only is it common for inexperienced investors to make irrational and emotional decisions regarding their holdings, it is expected. Right now, we are seeing a lot of that, but we are also seeing some of the big holders of crypto panicking as well. With all of this fear and a high volume of selling activity, people will be reacting rather than taking their time, understanding how they are positioned and then making any necessary adjustments to their portfolios. Scammers wait in the wings for you…
If you are involved at all with crypto.com, you will probably remember that in mid-January of this year, they prompted all their customers to upgrade their accounts to two factor authentication (2FA) for access to their holdings. This is fairly standard now in a lot of industries, not just crypto, so it wasn’t a major announcement. What crypto.com did not do a good job of, was preparing their users for the zero balances their accounts would show until the request was completed. If you tried to log in and had not yet completed this process your account showed $0. This can be disconcerting to those who know crypto and would probably cause downright panic to someone who bought on a whim or a tip. My account showed that zero balance. I immediately thought, what if it’s gone? What if I don’t get it back? Had I put more in than I could afford to lose? Many of those thoughts don’t ever go through your head…until you are faced with something like this. I downloaded an authenticator app and followed their instructions. Without going into the details of why it didn’t work for me, suffice it to say that I had to go out and research it further.
In my searching, I landed on crypto.com’s Support Twitter feed, or so I thought…
This is the response I got from “Support.” Please note that the text conversation began at 1:29 pm. I stated that the new authentication code was not being accepted to allow access to my assets. They asked how long ago, I said 2 hours and they responded that assets had been “lost in this attack.” What? This is an immediate red flag. I got a message upon entering the crypto.com app that all they were doing was upgrading security, nothing about an attack. In the span of only a few minutes they literally tried to scare me so I would react emotionally and then they kindly directed me to connect my wallet to some blockchain outside of crypto.com. Another huge red flag. Within a minute, another text and another, now telling me they’ve had two attacks and to treat this as a matter of urgency! Immediate escalation with the expectation of action – they were trying hard; I’ll give them that. It was another red flag. In the very next minute, they are again texting to follow their steps and that all assets are at risk. Then the support line suddenly and strangely became clogged up and lastly, they hoped that they had helped. When I didn’t react to the first suggestions, it was almost as if the last barrage of texts was to give that last hail Mary to see if I’d play along and if not, they were off to HELP someone else… I never heard from them again.
I wish this was a one off and I need not worry about it ever again, but we know that is a farce. Scammers have always been there; they are there now, and they will continue. The best advantage you can gain is awareness. On your journey learning crypto, learn as much as you can about the bad elements involved to give you the best chance at success!