Cryptocurrency has become a good way to earn money on the exchange. Having these coins provides income to its owner, and with the help of cryptocurrency, users have learned to make quick money. Naturally, where there is money, there are those who hunt for it.
In developing fraud schemes on crypto exchanges, scammers have focused on such aspects as underground activities and the creation of fake investment funds. By working in these areas, scammers manage to lure victims and deprive them of their funds. Therefore, it is recommended to use verified and reliable crypto exchange resources, which can be:
- found on the internet;
- asked from acquaintances;
- learned about through advertising.
Crypto Exchanges
A crypto exchange is an online platform where digital currency is bought or sold. Moreover, there are many additional ways to earn money in the world of crypto exchanges.
The essence lies in the fact that on the exchange, clients can exchange one currency for another or virtual money for regular money, with possible conversions in various combinations, such as buying some cryptocurrencies for others or for currency.
The exchange rate of the virtual money being sold or bought is constantly updated on the crypto exchange. You can always find out the current rate of your asset.
Users often use various ways to earn:
- The main earning on a crypto exchange is the exchange of assets, which involves buying or selling cryptocurrency. This function is fundamental for crypto investments and trading.
- Additional functions include staking, which involves freezing a certain amount of currency to earn interest from it. Naturally, the amount that was frozen is untouchable for a certain period by the user, although during this time the exchange actively uses the frozen currency, allowing them to create new coin blocks.
- Lending has similar functions to staking, using a frozen part of the assets for other purposes, to provide loans to exchange clients. This allows the owner of the frozen assets to earn interest on it.
- A liquidity pool is a method where a client sends a certain amount of money, allowing them to earn additional interest on transactions.
Exchange Fraud
There are several common schemes created by scammers for cryptocurrency theft.
Fake service support - this method involves working with messenger accounts, creating duplicates where the scammer pretends to be the group administrator and performs verifications and activations, allowing them to obtain confidential information about seed phrases and private keys of victims' crypto wallets, providing access to funds and withdrawing them.
Crypto dust - small parts of cryptocurrency stuck in segments of the blockchain, where the scammer from active parts retransmits the addresses of these pieces, allowing them to monitor how cryptocurrency moves in the blockchain and engage in extortion activities.
Malicious and dangerous programs - this activity is called scripting, a special program located on a computer that allows the entry of an electronic wallet address. A malicious program, at the moment of entry, reads email addresses and obtains information on the wallet launch process. Even an experienced crypto exchange user might not immediately notice such a theft.
Cryptojacking - these are fraudulent actions aimed at inconspicuously embedding into the operating system of any user under the guise of a specially created site-code.
Trading Risks
Trading allows the cryptocurrency owner to earn additional finances. In the trading process, cryptocurrency trading occurs among traders. Their task is to purchase digital money when its price falls and be able to sell it in time when the cryptocurrency price rises.
Trading involves relative risks that an experienced broker can calculate in advance. Trading risks are referred to as the percentage ratio of losses to the deposit at the maximum size. No investor is insured against losing investments.
During trading, a technical failure or disconnection with the trader may occur.
There is also a possibility of being deceived by scammers during trading. They can lure investors to fake exchanges and offer profitable trades with the intention to deceive and rob.
How to Protect Crypto
Using cryptographic methods and technologies ensures crypto security. The main focus:
- Currency integrity;
- Access confidentiality;
- Authenticity of crypto data.
The use of secure encryption of accumulated crypto data, using mathematical algorithms creating unique keys, is widespread as one of the reliable means of protection.
Using strong authentication with complex passwords, digital signatures, and biometric data will help ensure protection.