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Never Heard of the Honeypot Crypto Scam? Here’s What It Means
Honeypot Crypto Scam is a technique or scheme that uses a cryptocurrency wallet, token, or smart contract to lure its victims. Unsuspecting users voluntarily decide to invest, transfer, or trade their tokens, only to be robbed.
Honeypot Crypto Scam: The Scheme That Uses Smart Contracts, Tokens, or Wallets to Defraud Its Victims
The Honeypot Crypto scam is one scam scheme used to attract new victims, with the prospect of stealing their funds.
Specifically, in this type of scam, the bad actor uses a cryptocurrency wallet, token, or smart contract to lure unsuspecting users into investing, transferring or exchanging tokens and cryptocurrencies.
Basically, what characterizes the Honeypot Crypto scam is a promise of substantial profits to unsuspecting victims, who voluntarily transfer their funds to the scammer’s crypto wallet.
Only later will users realize that it is actually a scam and that they have therefore lost their tokens and cryptocurrencies.
There is also a possibility that this type of scam can occur even when scammers pose as inexperienced users looking for help.
But let’s get into more specifics: here are the crucial points to identify when you come across a Honeypot Crypto scam.
Honeypot Crypto Scam: how does it work and how is it structured?
In general, the Honeypot Crypto scam takes place in three distinct phases. The first phase sees the scammer distributing their own smart contract that appears to have a design flaw and allows any user to mine contract tokens.
Here we are in “honeypot” phase, which is that moment in which the instinctive greed of users is exploited, given that it is at the center the promise of substantial future earningsIn reality, the malicious smart contract will require the victim user to send it a certain amount of cryptocurrency first.
Here is the second phase, or when unsuspecting users send the required deposit in crypto, and attempt to exploit the vulnerability to cash in. Right here, at second vulnerability will intervene to prevent victims from withdrawing the initial deposit and the contractual reserve.
Finally, the third stage involves the scammer cashing out the funds from the malicious smart contractincluding the deposit of all Honeypot Crypto scam victims.
As mentioned, this type of scam can also occur when scammers pose as novice users looking for help. In this case, the attacker will first contact users on social media, pretending to be an inexperienced user who needs help cashing out or transferring their fake large crypto funds.
To be more convincing, the scammer could share their private keys with the unsuspecting victim and promise them a portion of their tokens in exchange for their help.
With this premise, in order to proceed, the victim will be forced to deposit the native token of the blockchain on which the wallet operates in order to withdraw the tokens.
And it is precisely here that the funds will end up in the hands of the scammer, since once reached, they will be immediately redirected to another wallet, via automatic scripts.
How to stay away from scams in the world of cryptocurrencies
Being a cryptocurrency user today requires knowing and implementing some fundamental behaviors to stay safe from ongoing cryptocurrency scams or frauds.
In fact, in addition to the Honeypot technique, there are many others that continue to increase and specialize more and more to defraud users of this magical sector.
In this regard, in this jungle, every cryptocurrency user should consider following a series of valid rules for their safety.
For example, first of all, it is necessary to protect your wallet where your cryptocurrencies are stored.
In this case it is always better to rely on hardware crypto wallets like Ledger, or decentralized crypto wallets where the user owns the private keys and not the online platform.
Another behavior is to stay updated on the various scam techniques present in the sector. There are various reports that reveal the current trends and characteristics of each crypto scam.
In addition to the Honeypot, in fact, there are the techniques of phishing and approval phishing, but also “access control”, “rug pull”, “oracle issue” and many others.