Whether you’re new to etherium platforms or an old pro, you may have noticed that some sites are a scam. These scams can range from fake dapps that require you to give them access to your wallet in order to purchase tokens, to scams that use astronomical quantities of tokens in your wallet. Here are some tips to avoid scams on etherium platforms.
Sim-swap scams
Using a SIM-swap scam, a thief steals your phone number. This can be used to access your online accounts, including cryptocurrency wallets and exchanges. In fact, this form of fraud has been reported to have stolen more than USD 50 million from over 800 individuals since 2018.
SIM-swapping is not a new threat. In fact, many mobile phone providers have created compliance and internal education programs to combat this threat. However, a recent wave of coordinated attacks is targeting U.S. crypto holders and users of “hot” online crypto wallets.
According to the FTC, SIM-swapping fraud involves convincing mobile phone service providers to swap your number with another number. The thief then uses your personal details to impersonate you. The attacker can then contact the phone carrier, masquerade as an authorized party, and request access to your phone. This can be done by either a phone call or through an SMS-based MFA (Multi-factor authentication) method.
Exit scams
During the ICO boom of 2017, many exit scams popped up in the cryptocurrency space. These scams occur when the developers of a crypto token pull funds from their decentralized exchange pool. Those who invest in the token often lose everything. It’s crucial to recognize these scams to avoid losing your hard-earned crypto.
The infamous “rug pull” scam is a common practice on decentralized crypto exchanges. During a rug pull, the scammer uses a sophisticated feature on the exchange’s signature “swap” screen to manipulate transaction logs. This makes it appear that a popular crypto influencer has bought a large amount of token.
Imposter scams
Unless you’re a crypto guru, you’re likely to be a victim of imposter scams. These scams are designed to defraud you of your hard-earned cash. They are usually performed through emails or on popular social media platforms.
The most popular scams use the name of popular crypto figures such as Vitalik Buterin or Elon Musk. These scams will usually feature a double-back promise.
An imposter will offer to help you with a problem and ask you to send them some cryptocurrency. This is a type of transaction scam, but you will never see your crypto return. If you are ever asked to send crypto to a scammer, report the sender to the authorities.
Giveaway scams
Despite being a relatively new technology, cryptocurrency giveaway scams are an increasingly common form of phishing. Cryptocurrency users must be aware of these scams so they don’t lose their hard-earned money.
Giveaway scams are typically promoted through popular social media platforms like Twitter and YouTube. These scams use deceptive advertisements and false claims to lure users into transferring their cryptocurrency to the scammer’s wallet.
A giveaway scam involves a website that promises to double your ETH. Usually, it involves a limited time window in which to claim the giveaway. This creates a false sense of urgency.
Scammers often impersonate prominent figures or companies to lure victims. Some scams even include a fake tweet with the amount of crypto being given away.
Dapp requests access to astronomically high quantities of tokens in your wallet
Often a Dapp will ask for access to astronomically large quantities of tokens in your wallet. They may even promise a large APY for doing so.
There are actually two ways to accomplish this feat. The first is to purchase a mining voucher to gain access to the proceeds. The second is to pre-approve access to multiple tokens. You can do this by modifying your wallet’s allowances.
It’s no secret that most DApps ask for an infinite number by default. This allows the dapp to move tokens at will, as long as you give them permission. This is not a good idea, as bad actors can use the privileges to their advantage.
Casper scam
Earlier this month, Casper, an update to the Ethereum platform, was announced. The project is meant to make the platform faster and more secure. It is also meant to be scalable. Casper’s developers plan on shifting from proof-of-work to proof-of-stake over several iterations.
The company claims that its Casper protocol is a “correct-by-construction” system that is unique to the industry. This means that if a validator makes a mistake, they can easily fix it without having to publish invalidators ahead of time. The system also allows businesses to add new features without needing to worry about invalidating the entire network.
The Casper protocol is designed to take Ethereum into a new phase of scalability and usefulness. Casper is also meant to be an easy way for developers to get involved in the industry. Using the new technology, users will be able to create smart contracts and write competing applications to the Ethereum platform.