How to protect yourself from cryptocurrency fraud?

How to protect yourself from cryptocurrency fraud?

What are the risks that the cryptocurrency world hides? And how to protect yourself?

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You probably know that cryptocurrencies and blockchain technology have many advantages like fast and easy payments with little additional costs.

Yet, there`re also many fraudsters lurking in the dark side of these new technologies.

Cryptocurrencies have a highly transferable nature, and this along with the complexity of how blockchain technology works create a risky environment for investors. Last but not least, the sector is quite new, so it`s still unknown and unregulated. Unfortunately, this makes it easier for fraudsters to push forward their cryptocurrency scams that are often very hard to verify by users.

Let`s dive into some of the most common cryptocurrency scams, as presented by Rose Marie, Project Lead/Content Director at @IAGON who published the list on Medium:

1. Twitter/Telegram

Ever heard of scammers hijacking Twitter accounts? Yes, it is a thing on Twitter. Often the fraudsters use a number of bots to develop statements that appear to be published by actual Twitter personalities. And also they make the scam even more believable by making public “successful” sharing information that shows how other users are having success with receiving the cryptocurrency. However, these responses are also produced by bots that assist in making the scam more successful, as the article explains.

Do yourself a favor and strictly avoid submitting any personal information/sending any cryptocurrency to wallet addresses that were given to you on social media.

2. Cryptocurrency phishing scams

Cryptocurrency phishing scams “clone” an exchange website by hosting it on a domain that looks like a replica of the original, as the publication in Medium makes clear.

How to avoid falling victim to phishing scams? Don`t provide your private keys to anyone and always check several times that the URL you are using is correct and having the green “secure” emblem.

3. Initial coin offerings (ICOs)

ICOs can have many nice things to offer. But, oftentimes they are just a scam that tries to steal away money from investors. It should be a red flag if an ICO sells worthless tokens to their investors, disappearing the very moment their investment goal is reached.

How to protect yourself against these frauds? Look for suspicious signs like a lack of a whitepaper, exaggerated promises of profit and returns guarantees, a lack of an MVP, roadmaps, and a product, and a lack of an advisory team. In general, exercise caution when investing in ICOs, if you decide to put your money in them.

Do you have experience with scammers or any advice on how to protect ourselves against them? Please share it in the comments below.

Image Credits: Pixabay