Cryptocurrency is a global phenomenon quickly gaining popularity and acceptance. However, it's also a wild frontier. As with most new technologies, there are people looking to take advantage of those who don’t know all the ins and outs.
To help you steer clear of cryptocurrency scams, we’ve put together this handy introductory guide. It will give you the knowledge you need to avoid falling prey to scammers who want nothing more than a quick buck from your digital wallet.
Always do your research
Before you invest any money in cryptocurrency, it’s essential to do your research. Remember that crypto is not a get-rich-quick scheme. Making wise decisions with your money takes time and research, but doing the necessary homework will help you avoid most scams. Here are three steps to get you on your way:
- Research the companies and people behind the coins and their products or services. Check the company's website and social media accounts to see how long they've been around, what its overall image is like, etc.
- Read reviews online to see if there are any recurring issues with the exchange or product you are considering. If it’s constantly getting bad reviews or complaints from users, it may be best to avoid it altogether.
- Look for readily available customer service. If you ever have a problem with your account or funds, it's vital that they can help — and fast! You should expect 24/7 support via live chat and phone lines and email or ticket submission options.Don't feel like you need to be a digital expert from day one. Just take some time to research where you're putting your money — and it’ll pay off in the long run.
Watch out for phishing scams
Phishing scams are a form of online fraud where criminals try to trick you into giving up your personal or financial information. They do this by pretending to be someone they're not, often in order to steal your money from a cryptocurrency exchange or wallet. For example, an email might look like it's coming from a legitimate company but actually be sent by a hacker trying to steal your username and password.
Another common phishing scam involves fake websites with a URL that looks similar to the website you want but with just one letter changed. These sites can copy the design of a legitimate site and even offer free trials, enticing people who want to make money on crypto trading platforms but don't know what red flags are worth looking out for yet. Similarly, beware of QR codes that might have been altered to appear legitimate but actually send funds elsewhere when scanned.
The best way to avoid falling victim? Be vigilant about what emails and links look like! If there appears any doubt whatsoever about whether something could possibly be real, don't click on anything until you've double-checked with another source.
Be wary of unsolicited giveaways
Scammers love to prey on the excitement of new crypto users, so it's important to be wary of giveaways that seem too good to be true. These phony giveaways or "airdrops" are often targeted at new users who don't know what they're doing, so they can be easily fooled into giving away their personal information or wallet address.
While some legitimate projects do offer free giveaways as part of their marketing efforts during ICOs (Initial Coin Offerings), these giveaways should be open only via official channels and never through unsolicited messages from strangers online. Therefore, if you think something is suspicious and doesn't check out with the research you've been doing, it's probably a scam — so don’t click!
Here are some visual examples of how scammers have interacted with CryptoSpend’s social media posts.
CryptoSpend Quick Tips:
- Look for the blue verification tick next to the CryptoSpend profile name to confirm account legitimacy
- Facebook/Meta, Instagram, and Twitter are some of the common social media platforms scammers use to contact and deceive CryptoSpend users and followers
- If someone reaches out via Facebook/Meta, saying that they can make you a lot of profit, it’s a scam
- If a service asks for you to make a deposit before they release your funds, it’s a scam
- We never send you links to your phone or reach out to you on social media to ask you to deposit funds
Get a cold wallet for your crypto
You're doing your research, and know not to click on phony links, but there's more work to be done. Cryptocurrencies are only as secure as the wallet where you keep them, and lagging in this department leaves you particularly vulnerable to being compromised. The most effective solution to this is storing your funds in a cold wallet — that is, one not connected to the internet.
Cold wallets (also referred to as hardware wallets) resemble an external hard drive or USB stick, and though they are less convenient than other storage methods, they are far less vulnerable to cyberattacks and viruses due to their offline nature. If you're new to crypto or just looking for somewhere to store your coins safely, there are many different options available, each with unique benefits and advantages. The most popular and proven cold wallets include:
- Ledger Nano X ($249)
- Ledger Nano S ($149)
- Trezor Model T ($268)
You can get Ledger products directly HERE
It’s worth noting that cold wallets require more setup than other forms of storage — but for those who plan on investing in cryptocurrency for years to come, a cold wallet is well worth the initial effort and cost.
Protect yourself through multi-factor authentication
In a world where scammers and hackers are always trying to steal your data, it's important to use multi-factor authentication. Multi-factor authentication (MFA) is a security process that requires two or more forms of identification — analogous to two pieces of a puzzle — before granting access to an account.
Basically, someone trying to access your cryptocurrency wallet would need both your password and another form of identification — like a one-time passcode sent via text message or generated by an app like Google Authenticator. If a hacker tries to log in with just one piece of the puzzle, they won't get anywhere because they don't have access to any other data required for authentication — which makes this kind of protection pretty effective against attacks!
Combined with proper research, a vigilant lookout for scams and proper crypto storage, any scammer looking to get access to your funds will need more than a couple puzzle pieces — they won't even know they're looking for a puzzle in the first place.
When it comes down to it though: just be vigilant and cautious when dealing with cryptocurrency. Don't invest in anything unless you know what it is and who is behind it! And, of course, if you're not sure what it is? Ask! The cryptocurrency community is thriving, and it's full of people who are genuinely interested in helping others learn about the space and avoid falling prey to malicious actors.
If you have any questions or concerns, feel free to reach out to our live-chat support team within the app or website.
**All information in this article is for informational purposes only. You should not construe any such information or other material as legal, tax, investment, financial, or other advice. Nothing contained herein shall constitute a solicitation, recommendation, endorsement, or offer by CryptoSpend to invest, buy, or sell any coins, tokens, or other crypto assets. Any descriptions of CryptoSpend products or features are merely for illustrative purposes. Past performance is not a guarantee or predictor of future performance. The value of crypto assets can increase or decrease, and you could lose all or a substantial amount of your purchase price. It is essential for you to do your research and due diligence to make the best possible judgement, as any purchases shall be your sole responsibility.