A Beginner's Guide to Avoiding Crypto Scams

With the current buzz and craze around cryptocurrencies, we see numerous articles and advertisements about them. The challenge is to filter the good from the bad. Many people are falling prey to crypto bucket-scheming or pyramid scams. The abundance of new users coupled with naivety has made it a fertile ground for scammers. The number of such schemes is growing every day, which makes it even more important for newcomers to be cautious when venturing into this space. Scams can appear in any form, like a free giveaway, an investment opportunity that promises high returns, or an online coupon that you can’t redeem. In this article, we list some ways in which you can avoid getting duped by crypto scammers:

Don’t rush into anything

Whenever you read an article that promises you wealth and riches, always pause and think before taking any action. Haste makes waste. Crypto scams can be sophisticated in nature and variety. Therefore, you have to be careful about the source and content of the information that you are reading. If the article has a misleading title, contains grammatical errors, or sounds like a sales pitch, be cautious. Scammers sometimes create fake news websites or use legitimate ones for their purposes. Similarly, if you come across any investment offer or ICO that promises you huge returns with very little information about the project, be careful. Scammers can use crooked marketing techniques to lure you into investing in a fraudulent project. They can promise you moons and stars but might not even have an actual product.

Beware of fake exchanges and wallets

Exchanges and wallets are websites where you can store your crypto assets. A crypto scam can involve an unscrupulous exchange or wallet website that steals your private keys or your money. Always check the reputation of the exchange or wallet website before signing up. Many of these sites are fraudulent and should be avoided. One way to avoid such scams is to go for reputed websites that have been in the business for a long time. If a new exchange or wallet website seems to be offering a really lucrative deal, be careful. If you are looking to trade on a new exchange, do some research and read reviews about that particular exchange to ensure that it is not a scam. A wallet scam can happen in two ways: - A wallet website can be hacked and your wallet can be emptied. - An unscrupulous person can create an exact replica of the wallet website and steal your funds. To protect yourself, you can use an official crypto wallet like MyEtherWallet or Ledger Nano S.

Double check the URL and wallet address

In order to avoid getting scammed, you must check the URL of the website where you are planning to open an account. Scammers can create fake websites that look exactly like the original ones and get you to sign up. Once you enter your details and click ‘Log in’, you can never go back. It is important to also make sure that the website URL matches the one mentioned on the ads or news articles. Similarly, when you are setting up an account for a crypto wallet, make sure you are using the correct wallet address. An incorrect wallet address can lead to the loss of your funds.

Research the team behind the project

The crypto world is full of bold claims and grand projections. Scammers often lure you into investing in a project by promising ‘huge returns’ or ‘low risk’. However, they might not even have an actual product or business model. Be careful about such projects, and do thorough research on the team behind the project. Find out who is the CEO or founder, and what is their experience in the field. Also, look at their past track record. If the project team has no experience, has no product, or is trying to raise funds for a vague idea, it is likely to be a scam.

Be aware of ‘too good to be true’ offers

Extremely lucrative and ‘too good to be true’ offers related to crypto assets or investment returns must be approached with caution. Scammers often use such ploys to draw you into their scheme. For example, an offer to double your money in a certain period of time is a major red flag. Similarly, if you come across an ‘ICO’ that promises to give you 10 to 100 times your investment in a small period of time, be cautious. Such offers are probably too good to be true. Similarly, any ‘free giveaway’ related to crypto assets must be approached with caution. Scammers often lure you into giving them your private keys or wallet address. Once you do so, you will lose your money.

Conclusion

Cryptocurrencies have gained immense popularity in the past few years, attracting people from different walks of life. The current buzz and craze around cryptocurrencies have made them a fertile ground for scammers. The abundance of new users coupled with naivety has made it a particularly challenging task for newcomers to be cautious when venturing into this space. Scams can appear in any form, like a free giveaway, an investment opportunity that promises high returns, or an online coupon that you can’t redeem. In order to avoid getting scammed, you must check the URL of the website where you are planning to open an account. It is important to also make sure that the website URL matches the one mentioned on the ads or news articles. Similarly, when you are setting up an account for a crypto wallet, make sure you are using the correct wallet address. An incorrect wallet address can lead to the loss of your funds.

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