Cryptocurrency is dominating the world of finance. It is already a huge market, and scam losses are in the billions of dollars and likely to go much higher. New users should be wary.
Most crypto scams work on the same premise as traditional scams: a con artist tries to develop a rapport with you, tricks you into believing what sounds like a great opportunity, and then convinces you to either send crypto funds or give up your password, security code, or other means of access to your account.
How Can We Detect a Scam?
Although cryptocurrency can be complex, look for other signs such as these:
- Pressure to send money or provide access to your account.
- A guarantee that you will make big returns.
- A lack of supporting information about these big returns.
- A promise of free money.
- Someone called you and told you that your account had been hacked.
- Bad writing or plenty of grammar and spelling mistakes.
Tips for Avoiding the Snare
Now that we can detect the scams, how can we avoid them?
If it sounds too good to be true, it probably is. Buy your crypto through well-known, legitimate sites such as Coinbase or BlockFi. The site where you buy your crypto may have scam information as a courtesy to users. Read it. If you need customer support for a crypto issue, use contact information provided by the company you bought it from.
And now for a list of don’ts. Don’t share your private information, such as passwords, private keys (secret numbers used to sign transactions), or seed phrases. A seed phrase is a series of words generated by a cryptocurrency wallet that provides access to the cryptocurrency in it. Don’t give remote access to your computer unless the other person is known and trusted. Don’t give your login information to anyone. Don’t provide your passwords or security codes to third parties.