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How do Kiwis spot a crypto scam?

  • by: Dasset
  • On: 5, May 2021
8 min read
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Cryptocurrency scams are on the rise and targeting Kiwis. Are you or a family member looking at a crypto investment and wondering if it's a scam? Maybe you're already certain of an investment you're going to make. Knowing what to look out for will give you the tools to help your friends and family stay safe. Read below to see how Kiwis are being targeted and what you can do to protect yourself and your loved ones.

If you were around during the early days of the internet you would think that everyone was a Nigerian Prince in need of help. Over time we have become wary of these scams.

When it comes to the new world of cryptocurrency it's important to be skeptical, especially when evaluating new crypto projects, investments, and people you have met through the internet. Below you'll find some of the warning signs and simple rules you can use to protect yourself, your family, and your wealth from this new generation of fraudsters.

Types of scams

Romance scam

A romance scam usually starts with someone you have met online, through social media or a chat forum, and have never met in person.

You are likely a victim of a scam if someone you have befriended online instructs you to sign up for an account on Dasset and send bitcoin or crypto somewhere. They may ask for your government ID so they can do it for you, and they may ask for your username and password to your Dasset account, email address, or bank account.

Never, ever, ever give your Dasset username and password to anyone. Especially someone you've never met in person. Never let anyone else transfer money to your Dasset account, even if it's from your own bank account.

Lottery scam

A lottery scam usually starts in the same way a romance scam starts, on a social media platform with one or a group of people who claim a lottery has been won. A tax or duty must be paid to collect the winnings or proceeds. If you pay the tax, the lottery will be split between you and the other members. 

If you met someone or a group of people online who said they've won a lottery, stay away. It is highly likely a scam.

Investment scam

Investment scams usually come from an overseas business that promises to invest in crypto on your behalf. The challenge is identifying companies that have your best interests at heart versus the ones that are trying to take all your money.

Investment scams often go to very far lengths to prove their legitimacy, even forging company documents, and taking the identity of legitimate businesses. They may say they are located in a country such as the US, UK, or Australia. The most common way of communicating with these scammers is through messaging apps, such as Whatsapp, or on the phone.

This is a very common scam that we see. Sometimes an initial review of the business may seem legitimate. If you are going to send cryptocurrency to a business overseas make sure you know exactly whom you are sending crypto to because the crypto will never come back if it's an investment scam.

If they walk you through signing up with a Dasset account so that you can send them funds, then it is likely a scam. Remember, never, ever, ever give anyone else your email, bank, or Dasset account username and password to anyone you've met online.

In New Zealand, it is illegal to promise guaranteed returns on investment. It's illegal because it's impossible for anyone to guarantee a return on an investment.

Try local. There are plenty of legitimate investment businesses in New Zealand, even in crypto. It's much easier to vet the business and hold the business accountable using New Zealand rules.

Duties / tax scam

A tax scam is when a person or group of people asks you to pay for duties or taxes to release funds or an item. If someone you met on the internet is asking you to pay for duties or taxes to release an investment, lottery, funds, or items in customs, then you are likely a victim of a scam.

Boomerang scam

A boomerang scam is when a celebrity or personality on social media asks you to send them crypto to an address, and they'll send you double back. Often on Twitter, but sometimes on a website or other social media platforms. If you see Elon Musk asking for crypto and he will send you double back, run for the hills.

Ransomware

Ransomware is a virus on your computer that locks (encrypts) all the files on your device and demands that you send crypto to an address to access and unlock your files. Ransomware may also come as an email attempting to blackmail you.

Ransomeware is on the rise. In the last year, ransomware scams have increased by over 350%. Always make sure to backup your device and hold the backup offline, not connected to any other computers.

Ponzi schemes

A Ponzi is a scam that promises users investment. Rather than investing the funds on your behalf, the entity will pay out old investors with funds from new investors. If a cryptocurrency or investment has a scheme that encourages you to get all your friends involved, and promise income when they are involved, then it has a higher probability of being a ponzi or pyramid scheme.

Warning Signs

Fraudsters use various techniques to lure in potential victims.

Such methods include (but not limited to):

  •           Online ads highlighting or promising high returns and low risk;
  •           Pop-up ads that promote cryptocurrency giveaways or include fake customer reviews;
  •           Recommendations to invest or sign up for an account from a lover or close friend you've met on the internet;
  •           Use of complex documents and technical jargon;
  •           Phishing: this when scammers use a familiar website name (often with slight variations in the spelling, to lure you into entering your username and password.

If you are speaking to a person or group of people on social media or the internet you've never met about a crypto investment, tax payment, lottery, or promise of high returns, then it is highly likely that you are a victim of a scam.

If someone you met online is asking you to create a Dasset Account so you can transfer crypto to them then you are a victim of a scam.

If someone you met on social media or the internet is asking for your Dasset email and password, or bank account username and password then you are a victim of a scam.

If you have given someone any of the above, then you need to change your passwords immediately.

If you met a “UK” or “international broker” online, via phone, or social media it is likely that you are a victim of a scam. 

If someone on the internet or social media is saying they won a lottery and want to share the prize with you, then you are a victim of a scam.

If someone you met online is asking you to send them crypto for an investment, to pay for taxes or winnings, then you are a victim of a scam. 

I have been a victim of a scam. Now what?

If you’ve already fallen victim to a scam and have lost funds or about to lose funds, you need to do the following:

  1. Secure your computer, phone, and online accounts immediately. People may continue stealing funds from you until you have secured your accounts. Your email, bank, social media, phone, or Dasset Account credentials may be compromised. Change the passwords to your accounts immediately, starting with your bank, email, phone, and Dasset Account. If you have reused a password somewhere else, change the password to those accounts as well. It is critical that you enable two-factor authentication (2FA) for your email and Dasset Account. You can do so by visiting the general, password, or security settings of most email and social media providers.
  2. File a police report. With a police report, you have evidence of the event. While it is unlikely that the funds will be recovered, having the documentation may help the authorities track down the culprits.
  3. Inform your family so that they can provide support. If you are comfortable with being more public, let your friends know about what happened as well so that they know to be vigilant. You don't want the same thing to happen to your friends and family!
  4. If you used our platform, let us know as soon as possible, by contacting our customer support team. We're here to help and we want to make sure you're buying and using crypto for the right reasons. 

More signs

If someone on social media or the internet is asking you to send them crypto and they will send you twice as much back, then you can be sure this is a scam.

If an investment business or person is promising or guaranteeing returns on your investment run for the hills. It is illegal and impossible for any person or company to guarantee returns on investment. Life is uncertain and so are investments. 

If someone online needs your help to pay taxes, release winnings, access income, pay for goods held in customs, then you need to walk away.

You can protect yourself by doing your research, checking to see if the person or business is registered and crosscheck their details with official business registers. Checking to see if the URL (HTTPS address) is the correct one.

 

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