There has been a spike in the amount of crypto-related frauds in tandem with the meteoric ascent of cryptocurrencies in recent years. Scammers are always coming up with new ways to defraud people out of their money, such as phishing and false investment opportunities. Here are five tips to keep in mind as you explore the crypto realm to avoid falling victim to scammers.
Understand How Scams Work:
Knowing the main methods used by scammers is one of the best ways to protect you from being a victim of a crypto scam. Spend some time learning about the many scams out there, such as phishing, Ponzi schemes, and false Initial Coin Offerings (ICOs). Knowing the mechanics of these cons will help you see warning signs and avoid being a victim.
Many crypto exchange platforms have integrated identity verification, escrow transactions, two factor authentication and others. However, scammers use tricks to lure you into unsuspecting scam such as introducing you to untraceable third party payments. Some scammers ask you to send Bitcoin into their wallets so that they could offer you cash in USD or Euros.
You can avoid this by only making these BTC to USD conversions on a reliable platform. When you use a crypto exchange platform, it could be easier to trace if the transactions did not complete but third party payments are beyond reach from the sites.
Verify Everything:
Do your due diligence on a cryptocurrency project or investment opportunity before becoming involved. Investigate the history, credentials, and performance of the group under question. To determine the project’s reliability, you should read through official announcements and participate in online forums. Any guarantee that seems too good to be true probably is.
Secure Your Accounts: Use Strong Security Measures
Scammers in the crypto world frequently target unsuspecting victims. You should use different, robust passwords for each crypto-related account you have. Whenever possible, enable two-factor authentication (2FA) to further tighten security. Do not log into your cryptocurrency accounts while connected to a public Wi-Fi network, as these networks are often the target of hacking efforts.
Beware of Phishing: Double-Check URLs and Emails
Scammers continue to use phishing to get access to personal information. Be wary of clicking on links in emails or messages without first verifying their legitimacy. Scammers frequently employ deceptively designed phony websites that look like the real thing in an effort to steal sensitive information. Be very wary of any message or email that claims to be from a bank or other financial institution and asks for personal information or requests a financial transaction.
Stay Cautious in Online Communities:
While cryptocurrency-related online forums and social media groups can be a good resource, they can also be hotspots for fraudulent “pump and dump” schemes. Conspirators boost the price of a small-cap cryptocurrency using fraudulent means, only to dump their holdings at the peak, leaving innocent buyers carrying the bag. You should think twice before acting on hastily recommended investments or recommendations that sound too good to be true.
Endnote
In sum, the cryptocurrency market is ripe with potential, but it’s also fraught with dangers, most notably from scammers targeting the naive. To avoid harm from these dangers, you should arm yourself with knowledge, work hard, and be cautious. The probability of falling prey to crypto scammers can be greatly reduced by familiarizing oneself with common scams, validating the integrity of projects, safeguarding one’s accounts, avoiding phishing efforts, and exercising caution when engaging in online groups.
