Beware of Crypto Scams-How To Avoid 4 Types
The Cryptocurrency Market is Secure but Watch Out for These Common Crypto Scams
The cryptocurrency market often get a bad name for the very thing that is so great about them: decentralization. People liken the lack of a supervising institution, to a lack of security, when in fact the blockchain allows for much more secure and seamless transaction records. Once a transaction has been made, it is stored on the blockchain (a digital public ledger) and cannot be altered or tampered with.
Despite this, there are still several things to watch out for in the cryptocurrency-ecosystem, such as scams. We’ve mapped the most important ones out for you below, with some helpful tips on how to avoid them.
CRYPTO SCAM #1: Fraudulent ICO’s
Initial Coin Offerings (ICOs) are a form of crowdfunding for startups in the cryptoworld. Typically, a team will present a white paper stating their intention, laying out their business plan and introducing you to the team behind it. They sell a token, you buy an “investment”. It’s a great way for the start up to fund capital, and potentially a great way for you to make money.
With an ever-increasing number of new buyers with limited understanding, this became the perfect breeding ground for scammers. Creating hype around a project only to disappear with the money post ICO, resulted in many people losing their money, a reported $1 billion in total.
CryptoFish Fraudulent ICO Tips:
- Always research a project thoroughly before purchasing tokens. Look out for the white paper, the team behind it, the purpose of the token, and the specifics of the token sale.
- Stick to trustworthy exchanges that feature only vetted companies
CRYPTO SCAM #2: Fake Exchanges and Crypto Wallets
Exchanges are where you buy your cryptocurrency and wallets are where you store them. As you can imagine, this is also opportune territory for fraudsters. There are a number of fake exchanges out there, enticing customers with large-deposit-bonuses and too-good-to-be-true deals, sometimes taking your money, or charging excessive fees to withdrawal. There are also several fake wallets – some of which have even been listed on Google Apps. These may take your money all together, or take your personal information from which they can do anything (and usually take your money).
CryptoFish Fake Exchanges and Crypto Wallets Tips:
- Always research exchanges and wallets before downloading and engaging in them, stick to reputable and well-known ones.
- Look out for who is behind the company, are they registered? Do they have good reviews?
We’ve put together several trusted wallets for you.
CRYPTO SCAM #3: Pump And Dumps
Pump and Dumps are large groups of buyers that target a specific altcoin with a low market cap. These groups collectively buy large quantities of the coin to drive up the price, and then swiftly sell to take advantage of the significant price rise. This can take place in a matter of minutes. Essentially it is a tool to manipulate the prices of altcoins, and is illegal in traditional security markets.
Several tools are now available to monitor the volume increase in a particular cryptocurrency, helping to identify such schemes.
CryptoFish Pump And Dump Tips:
- Be wary of low-market-cap cryptos that suddenly experience a sharp price rise
- Research any cryptocurrency before buying
- Keep an eye out for “fake news” on social media that hypes certain coins
CRYPTO SCAM #4: Phishing
Phishing is a familiar concept, particularly in the world of traditional banking. In the cryptoworld, exchanges or wallets may send you an unsolicited email with a link to a site that almost identically replicates the one you usually use. Once you enter your account details, the scammers have full access to your cryptocurrency.
CryptoFish Phishing Tips:
- Double-check the URL to make sure you are visiting the genuine site
- Never disclose your private key
- Instead of following links from emails, use your browser instead
As with anything pertaining to money, it’s always important to be vigilant and do your research. Thankfully with Google at our fingertips it only takes a few minutes to find out whether something is a crypto scam. If something sounds too good to be true, it probably is. We’ve put together a few more tips on how to keep you cryptocurrency safe:
Securely and Safely Buy Cryptocurrency with CryptoFish
CryptoFish provides the latest news, educational insights and a secure place to buy various cryptocurrencies.
At CryptoFish, we offer a very simple way for you to instantly purchase leading cryptocurrencies like Bitcoin, Ethereum, Litecoin, Bitcoin Cash and Ripple using your debit or credit card online.
CryptoFish does not store your credit card details, encrypts your personal information and is GDPR compliant, making it one of the safest and most secure options. You can trust CryptoFish to easily, securely, and instantly buy cryptocurrency.
If you have any questions, please check out our FAQ section on the website or visit our Educational Portal. Our super-friendly CryptoFish support team is also here to assist you. You can drop them an email or chat live on the website. To chat, simply type your question into the chat box on the bottom right hand side of your screen.
