You’ve probably seen it before: a website promising instant money on small cryptocurrency investments. It appears authentic with all the satisfied customer testimonials, fear of missing out (FOMO)-inducing promises, and familiar financial dashboards. The site’s interface and content look legit, convincing, and user-friendly. Unfortunately, behind this authenticity, not everyone knows that it’s a scam.
With strong demand for cryptocurrencies and a growing market, frauds have exponentially increased. Investors must protect themselves from bogus crypto exchanges and tokens. While no crypto or blockchain-related platform is guaranteed to be authentic, the measures listed below can assist you to avoid falling into the hands of a scammer.
Verify The Website
To begin, there are several considerations. Inspect the URL for HTTPS links, the ‘s’ indicates that the connection is secure, whereas HTTP alone is not. Moreover, spelling errors in the domain are unacceptable. These are red flags that you need to be wary of. Likewise, if someone claims to have dropped ‘the next great thing that will earn you mega-profits in a week’ beneath a Reddit post, have your doubts. Always keep in mind that too good to be true promises are usually what it is.
Stay Ahead Of Scammers
It’s all about due diligence here. Begin with Google, Increditools, and other websites that can check the credibility of crypto exchanges, trading bots, and other software, then keep digging for valuable information. Feasibility, reliable facts, and transparency should promote confidence.
Trading cryptocurrency takes time and thinking you’ll make a lot of money quickly is the easiest way to lose money. Crypto trading, like many worthwhile endeavors, requires patience, understanding, effort, and calculated risk.
Meanwhile, if you use a trading bot to trade crypto, here are some suggestions to avoid being scammed:
- Traders shouldn’t blindly trust people and platforms without a proper legitimacy check.
- Trading bots are trading algorithms, not wallets. Don’t buy anything marketed as a trading bot unless you’re well-versed in the subject. Do your homework and ask for trade records. Checking online reviews is a useful approach to assessing a bot’s credibility. See sample reviews of the popular trading bot called 3commas to see what it looks like.
- As much as possible, stay away from open-source solutions because they are more vulnerable to hackers since they are open to information, trading data, and trends.
- Avoid ready-made trading bots because some companies will offer you one along with empty promises. The goal is to lure you in and get access to your accounts. So, beware.
Check The Whitepaper
A crypto whitepaper is a document released by developers to explain cryptocurrency and its purpose. It contains vital data, such as statistics, diagrams, and formulas. For a company starting up in the crypto industry, a white paper is proof of legitimacy and credibility. You can determine the status and authenticity of a crypto company through this.
So, when you’re analyzing a whitepaper, you should have the knowledge to understand it and immediately spot if it’s a scam, aiming to victimize you.
Furthermore, if the crypto company can’t produce whitepaper, don’t bother investing.
Even the most profitable initial coin offerings (ICOs) and cryptocurrencies have been accused of being driven by speculation. It’s easy to become excited about a hot new idea. But you should keep an eye out for new ICO and crypto investment options. Projects that promise easy money with fewer efforts are all lies. Always remember that developing any investment, like cryptocurrency, takes time and effort. Take trading seriously and study hard to learn everything there is to know regarding it.
Before investing in a project, examine its legitimacy with other sources and ask questions. Crypto and ICOs provide amazing opportunities to individuals who do their research and make wise investments.
Be Wary Of Online Ads
Be skeptical of internet and social media advertisements promising significant returns on investments in crypto assets or crypto asset-related products, and be wary of unsolicited investment opportunities which can be done via cold call, email, or social media.
Celebrity endorsements, for example, are a typical way to deceive victims. Professional-looking online advertisements, emails, and websites will be created to encourage fraudulent investments, including cryptocurrencies. To make the investment appear genuine, fake testimonies are often backed by a celebrity.
Few Types of Cryptocurrency Scams
Here are a few of the most typical crypto frauds that are circulating nowadays:
- Impersonation Scams. When a cybercriminal impersonates a trusted source, they try to persuade victims to perform a cryptocurrency transaction. This can be government agencies, credit card companies, banks, or even a service provider who will contact you via email and seek payment in cryptocurrency.
- Pump-And-Dump Scams. Pump-and-dump schemes have existed since the beginning of the securities market. The objective is to buy a rarely traded asset like a penny stock at a low price. They started spreading good news about the assets. But positive news is frequently manufactured. As more buyers buy the asset, the price rises. Once the price is sufficiently ‘pumped,’ the scammer sells their interest to the remaining customers. They own a large percentage of the outstanding shares, plummeting the price.
- Phishing Scams. Crypto phishing attacks frequently target online wallet data. Hackers target crypto wallet private keys, which allow access to funds. Similar to earlier phishing attempts and the phony websites outlined above. They send an email that directs victims to a website that asks for private key information. The criminals then steal the crypto stored in such wallets.
The old adage, ‘prevention is better than cure,’ also applies in this scenario. Being cautious enough to prevent yourself from being scammed of your hard-earned money should always be your priority. This article will guide you through the tips mentioned above by making you wary of red flags and fraudulent schemes that vicious scammers are using to lure you into their trap.