9 Much-Needed Tips to Protect Yourself From Crypto Scams
The world's attention has been highly on cryptocurrencies for a while now. It has appealed to both seasoned and amateur investors. All are keenly racing to get a share of this digital money.
Many people now know about the world of crypto. It also raises the number of scams. They come in several forms:
Phishing attacks
Ponzi schemes
Fake ICOs
Fraudulent investment websites
and many others.
We will walk you through some steps to help you understand how to protect yourself from crypt scams.
Crypto Scams: What to Do About These?
Cryptocurrency is exciting!! No doubt!! But… it comes with risks. Especially when it comes to scams.
We at Crypto Accountants have done some solid research for you. It is all to help you protect your investments.
Let’s understand these strategies in detail:
1- Always Do Full Research
Never ever sit on the importance of good research before starting anything new.
Do your complete one-to-all research on the project before investing. Who is behind it, what is their record, what problem are they trying to solve, how are they going to achieve their goals, etc? Everything should be at your fingertips.
The legal projects are always transparent about their plans and provide extensive white papers.
Be wary of projects that:
Promise guaranteed returns
Lack detailed information
Full of secrecy
Read more: 10 Biggest Crypto Scams of all Times!
2- Always Use Reputable Exchanges
Only use well-established cryptocurrency exchanges with a solid reputation. Research the exchange's history, security measures, and user reviews before signing up.
Once you choose an exchange, enable all available security features, such as:
Two-factor authentication
Withdrawal whitelist settings
It provides extra protection to your crypto account.
3- Phishing Attacks Can be Out There
Scammers have fake websites and emails that make it seem like they are coming from actual companies.
Always double-check the URL and email address before you enter any sensitive information. Save the official websites of your crypto platforms to avoid fake ones.
Never click links or download attachments from unknown emails and messages, especially those related to your cryptocurrency accounts.
4- Secure Your Private Keys
Make sure your cryptocurrencies are in a hardware wallet. These are offline devices that keep your private keys safe. It generally makes it very hard to hack.
Never give your private keys to anyone. The private key is the most critical part of your crypto security. Misplacing it or having it stolen may lead to losing all your wealth.
5- Steer Clear of "Get Rich Quick" Schemes
Never fall prey to such unrealistic claims. Usually, most scammers dangle an easy way to make considerable profits in no time.
Protect yourself against any investment or opportunity that promises returns. Especially those that require recruiting others or making up-front investments.
If the only income model of the project is from recruiting new members rather than from selling a product or providing any service, most likely, it will be a pyramid scheme.
As pointed out earlier, these schemes are forbidden in many countries. It may result in financial losses for a lot of investors.
6- Verify the Legitimacy of ICOs
Check if the ICO complies with local regulations. A legitimate ICO is always very clear about its regulatory status and the legal framework in which it operates.
Investigate who is behind the ICO. All good projects will have teams that have credible experience and identification; active team members are often found engaging on social media and keeping up a professional online presence.
7- Stay Informed and Updated
You can stay informed by following authentic news sources and following the personalities in the industry.
It allows you to have a better chance of recognizing potential scams and suspicious deals early on.
Take part in crypto-related forums, social media groups, and other communities. These platforms can offer valuable insights into possible scams, warnings, and helpful investment tips from other investors.
8- Be Cautious with Social Media
Scammers like to talk like famous crypto space personas on social media. They typically announce fake giveaways or investments. Check accounts before you interact with them.
Steer clear of any kind of celebrity endorsement. Use caution if there are any claims that a celebrity or public figure is supporting some cryptocurrency or investment.
Forgers set up most such endorsements to create credibility.
9- Report Suspicious Activity
If you get scammed, report it immediately to the appropriate authorities, whether local law enforcement, financial regulators, or the platform through which the scam was perpetrated.
Tell your story in online forums or on social media to alert others about the possibility of getting scammed. This way, you will help yourself and contribute to a broader effort against crypto fraud.
Reach Out for Help!
You need to act cautiously if you are a newbie in the crypto world. For more information regarding crypto tax, due diligence and compliance, contact Crypto Accountants.