What is crypto?
Cryptocurrencies essentially are digital currencies that use cryptography to verify and secure transactions. They does not have central issuing entity or regulator authority to keep them in check, and usually — no baking in the real world.
There is a wide range of different currencies and tokens — Bitcoin, Ethereum, Solana, various projects’ tokens and so on — that you can trade on centralised and decentralised exchanges. As there is no central entity to control them and no baking, they are usually highly volatile. That makes them so attractive to traders and investors — you can trade from anywhere in the world and if you’re good at it, make high profits.
Crypto scams & fraud
There are various ways for someone to fall victim to fraudlent activity in crypto space. Let us describe some of them:
- Private keys theft. First and foremost — never give your private keys to anyone! Same goes for passwords and 2FA authentication. No support agent will ask for this — be it a project or an exchange. If someone is telling you that they will help sort out the transaction or anything and only need your private keys — run!
- Phishing websites. Fake websites flooded with bogus testimonials and promise of high returns or aidrops — or copycats of real websites with small differences in website address. If you see one of those — do not click on any links or approve any transactions. Better safe than sorry!
- Impersonation. See a known figure on Twitter promoting high returns or “send 1 ETH — get 10 ETH”? That is a scam. No sane person will guarantee any returns or profits — and giveaways like “sent 1 — get 10” is a simple scam to get money out of people. Report it as spam.scam and move on!
- Ponzi schemes and Pump and Dump. One of the oldest forms of fraudulent activity — create a pyramid (ponzi) scheme where new investors are basically paying the ones who came before them — and con artists running away with most of the money out of the blue. Or create a lot of fake accounts or create a group of shillers, buy a token at the lowest and promote it to increase the price — giving you the exit liquidity from new investors.
- Rug pulls. Rug pulls are on the more complicated side of crypto fraud — usually, malicious actors need to create website with the promise of the working product, deploy a token and create an image of the working project around it. When enough people bought the token (or invested in the project) — creators run away with the money.
How to protect yourself
- Understand the risks. Cryptocurrencies are volitile and trading them usually depend on speculation and news. Noone can guarantee you returns — and the main motto here it “don’t invest what you can’t afford to lose”.
- Don’t FOMO into something only because someone told you to. Scammers often create a false sense of urgency or limited-time offer to persuade you to buy something or send funds somewhere.
- Research and do your own dilligence. Do not blindly follow advice from the internet or some Twitter influencers — always check yourself.
- Do not share your keys/passwords. As we’ve already told — noone legit will ask you for them.
- Don’t click on suspicious links. Add all website to the bookmarks (after cross-verifying the address) and never click on suspicious links on social media or in strange emails.
