How to Avoid Bitcoin and Other Cryptocurrency Scams

The recent surge in cryptocurrency prices has reignited widespread enthusiasm and the corresponding sense of urgency or FOMO (fear of missing out). However, this renewed interest has also been accompanied by an increase in fraudulent activities, with scammers seizing the opportunity to launch fake tokens promising great wealth, only to leave investors with significant losses.

Cryptocurrency scam attempts are rampant, but it is up to each individual to take precautions to avoid falling into the hands of cybercriminals. It is important to understand the risks of dealing with crypto-assets, how to safeguard them, and what signals can alert you to a possible scam.

Cryptocurrencies gained a bad reputation when scams proliferated like ants on a piece of cake. Even today, many people associate bitcoin and other cryptocurrencies with frauds, while ignorance about how to invest safely remains the primary culprit for new scam victims emerging every day.

The popularity of Dogecoin, for example, which started as a joke and experienced a seventy-fold increase in value, has inspired hundreds of imitator cryptocurrencies known as memecoins. These coins often launch with grand promises, capitalizing on investors’ psychology who want to be part of the next big success story from the outset.

While most cryptocurrency projects have transparent intentions, criminals often find new ways to try to deceive someone, despite the legitimate use that many people make of cryptocurrencies like bitcoin.

How to avoid crypto scams?

So, if you want to know what you should do to avoid being scammed by someone who thinks they are smarter than you, take a look at this guide that provides various security tips.

Work with Established Cryptocurrencies

The first thing to verify, especially for those entering the cryptocurrency market for the first time, is that the cryptocurrency being traded is established in the market. While there are numerous cryptocurrencies, only a few have a sufficiently large trading volume to invest with some degree of certainty. Bitcoin and Ethereum are prime examples.

What’s the First Step to Avoid Cryptocurrency Scams?

Education. Always start with the basics. If you want to delve into the world of cryptocurrencies, it is vital to educate yourself first: read about what a cryptocurrency is, what bitcoin is, how it works, how you can acquire it, what wallets or cryptocurrency wallets are available, and how you can exchange and spend them.

Moreover, always educate yourself from websites that do not require any investment: the Internet is free. Your education, beyond the costs of connectivity, should be free unless you want to access a more specialized course from a university. The more you know, the less likely you will be deceived.

What Do You Need to Know Before Getting Started with Cryptocurrencies?

Research. No matter what the project is: if you are going to invest in it, you need to know every detail, from its operation to who its administrators are. If it has a Whitepaper, do not skip reading it. When a Whitepaper is just a copy of any other, the project is most likely a cryptocurrency scam or simply has no future.

Now, if it is a service like an exchange or a payment platform, research it as well. Look for reviews, complaints, recommendations, or read the reviews provided by reputable sources. Also, stay updated with the news: many exchanges on the verge of bankruptcy after a massive hack choose to keep their users’ funds, for example.

How to Identify Cryptocurrency Scams?

Don’t believe everything you read. Even if it looks legitimate, leave room for doubt and pay attention to details. In the case of phishing, spelling errors are common, so check how it is written when you receive an email.

Some phishing scams replicate every last detail of other legitimate pages, but they cannot copy their exact address or domain. Also, if they guarantee astronomical profits in a very short time, they are definitely lying. The cryptocurrency market is volatile, and nothing is guaranteed.

If you read a very positive news, don’t believe it until you find the original source. Check if it is reliable or not. Go beyond social media, as not everything you need to verify the truth of a news is usually found there. Check the official pages of the companies or organizations involved.

If social media is flooded with positive comments about an unknown cryptocurrency or a new service giving away money, don’t get caught up in a trend. Reread and compare the different information you get.

How Do I Protect My Cryptocurrencies from Scammers?

Keep your private keys out of sight. Your wallet’s private keys should not be digital or in the cloud, as hackers could exploit a vulnerability in your computer or a service and obtain those vital security data. Nor should they be shown to anyone who requests to see them for any reason. Legitimate cryptocurrency exchange and wallet services will never ask you for this information.

Avoid buying hardware wallets, like Trezor or Ledger, from online stores or second-hand sources. Trust only the methods offered by the manufacturers. If an intermediary has access to the device you purchased, you could fall victim to the theft of your cryptocurrencies. Think about the story of that Ledger user who once received a fake wallet, with swapped parts.

Don’t Leave Funds Online

At least, not for long. If you are going to trade cryptocurrencies on an exchange or deposit them in a market, make sure to do so only when necessary and do not leave any residual amount there. These platforms are not bitcoin wallets: your funds may be at risk there, either due to hacking or eventual exit scams.

Only Deal with Trustworthy Individuals and Companies

There is a variety of scammers disguised as exchanges, bitcoin wallets, traders, or other services. Therefore, it is important to only deal with those who have proven themselves to be legitimate during their time in the cryptocurrency market.

Do not download files from websites you have not verified. Fake apps abound on the Internet today. One useful practice could be to download apps or any other software from official GitHub repositories.

Use Common Sense

If something seems too good to be true, it probably is. Key phrases to identify scams include “100% guaranteed,” “100% real,” “daily profits,” “No scam,” “The new Bitcoin,” “blockchain will make you a millionaire,” “technology that nobody knows,” “1000 free coins for joining,” “minimum investment,” “earn cryptocurrencies easily,” “I’m giving away cryptocurrencies,” “multiply your bitcoins,” “risk-free,” or “earn without investment.”

No one gives money to strangers just because, no investment is guaranteed, and if someone insists that something works and is “100%” real, it is probably because it is not. Likewise, no business operates without an initial investment, so “earning without investment” actually implies a referral system (pyramid) or hidden costs later on.

Always ask the standard questions. If something seems suspicious, do not provide any information or money until you have thoroughly investigated. If you want more information, check out this article on the most common bitcoin scams.

Beware of Dating Apps and Business Calls

In this case, we’re not going to recommend that you close yourself off to love with people you meet through dating apps or that you don’t answer calls on your phone, but caution is advised. Scammers are increasingly using their ingenuity to deceive people and take over their cryptocurrencies.

Dating apps, in some cases, are the focus of scams known as Romance Scams. Therefore, it is important to identify a stranger who swears eternal love to you and offers investments in BTC or some cryptocurrency with which you will multiply your funds. It is safest to assume that it is a fraud.

Another of the most innovative methods for committing scams is through calls from supposed companies or government agencies, called Vishing. Under this modality, the attacker asks for payments with cryptocurrencies, either to pay for a service or supposedly safeguard your crypto-assets.

Purchase Cryptocurrencies Through a Trusted Platform

Cryptocurrency transactions, whether it is a direct purchase on a cryptocurrency exchange or speculation on their prices through CFDs on an online trading platform, to be safe, must be done through a trusted exchange and/or broker. How can you check if the professional is legitimate? There are some indicators for a first approximation:

• The website has an SSL security certificate. Never operate with pages that lack it.
• The website includes legal information and the license to operate in this type of business.
• The existence of customer service phone numbers will also contribute to giving that image of reliability. Providing more information will be positive.
• Do not trust the face of celebrities unless their collaboration is really confirmed. And if there are spelling or concordance errors on the website, it would be best to abstain.

All these factors do not filter 100%, but they do eliminate a large part of the scams.

Do Not Download Apps Before Dealing with the Platform

Some cryptocurrency purchase apps may be fraudulent. The main problem would be phishing, which could pose an additional problem because it steals personal data. It is possible to find that someone else is operating through your passwords and bank accounts.

Check Reviews Online

Checking online reviews is a valid requirement twofold. On the one hand, because it will serve for the cryptocurrency in question; on the other, because it will help choose the most reliable platform.

Today, it is as easy as using Google to find out the reviews of an operator and know what reputation it has in the market. This allows adding a more accurate judgment element to the reliability we have talked about before.

Do Not Accept Gifts or Discounts in Cryptocurrencies

A reliable platform will not offer gifts or discounts in cryptocurrencies. It may offer some discounts for services or not charge commissions for a time, but you should be wary of anything that resembles a last-minute sales pitch. Professionals do not work this way, so keep that in mind.

Buying cryptocurrencies without the risk of scams is easier if you have a professional who can help.