LAS VEGAS (KLAS) — As cryptocurrency gains popularity, it also becomes a prime target for scammers, making it crucial to take precautions and avoid falling prey to scams.
Associate professor Deniz Appelbaum, who teaches a blockchain course on cryptocurrency and finance, explains that, unlike traditional investments, in which money is safely stored in a bank account, crypto requires constant monitoring and awareness of market fluctuations.
"It acts like a penny stock, where really you have to know when to buy, when to sell," Appelbaum said.
Digital currencies have no intrinsic value; their worth is purely determined by market demand. Since they operate independently of central authorities like banks or governments, their value can be highly unpredictable.
However, millions of people are learning about and adopting these currencies. While the underlying Bitcoin algorithm has never been hacked and remains secure, vulnerabilities arise in wallet management and off-chain transactions, where fraud is more common.
People should be aware of pump-and-dump schemes. This type of scam works by artificially raising the price of a stock, or cryptocurrency, by increasing its popularity.
Meme coins, like those recently released by President Donald Trump and the first lady, often see sudden price spikes driven by hype, making them susceptible to pump-and-dump schemes. While they aren't promoted as good investments, it's important to remain cautious.
"I feel eventually it will become more centralized and controlled by the government out of necessity," Appelbaum said.
Cryptocurrencies are nonrefundable, and one cannot stop a payment once it has gone through, so it is vital one never sends any money to a source one cannot verify is trustworthy.
While many believe they would recognize a romance scam, plenty of people will fall victim to investment scams without realizing the fraud behind it until it is too late.
Investment scams are the leading cause of financial loss for crypto users. These scams often involve fraudsters posing as high-profile figures, luring victims with promises of guaranteed high returns.
Another common tactic is blackmail scams, in which scammers claim to have compromising information and attempt to extort cryptocurrency payments through fear. However, these threats are usually baseless.
It's important not to engage with scammers and to report the message to the platform or the authorities immediately.
Source:
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English (United States) ·