Stay Safe, Stay Informed: A Comprehensive Guide to Protecting Your Crypto From Scams

Published: April 24, 2024 at 1:00 am Updated: April 23, 2024 at 8:00 am

Edited and fact-checked:
April 24, 2024 at 1:00 am

In Brief

In 2024, scammers have adopted new scamming tactics, users should be armed with information so as not to fall victim to fraudsters.

Unfortunately, the staggering growth of Web3 projects has created a fertile ground for scams. According to a report by Chainalysis, while crypto scamming revenue fell significantly in 2023, with total illicit revenue down 29.2%, in 2024, scammers have adopted new scamming tactics. As major Web3 platforms continue to experience exploits, crypto users should be armed with information so as not to fall victim to fraudsters.

Referring to History

From Ponzi schemes to deceitful exchanges, crypto scams have capitalized on investors’ enthusiasm and trust, resulting in substantial financial losses in their wake. These incidents serve as a stark reminder that the crypto industry is susceptible to deception and the actions of fraudsters.

OneCoin

Established in 2014 by Dr. Ruja Ignatova and Daniel Dabek, OneCoin was marketed as a genuine digital currency. Yet, it swiftly became apparent that OneCoin was merely a colossal Ponzi scheme. Law enforcement intervened in 2017, leading to the apprehension of major players, although Dr. Ruja Ignatova remains elusive. This scheme wrought havoc, leaving approximately $25 billion in damages in its wake.

$SQUID

Influenced by the South Korean series “Squid Game,” the $SQUID token emerged as a play-to-earn cryptocurrency, purportedly linked to a forthcoming video game inspired by the show. Promoted heavily on social media, its value surged dramatically, reaching a peak of $2,861 before collapsing entirely. This sudden crash, known as a “rug pull,” involved the swift withdrawal of funds by the creators, resulting in investors suffering losses totaling $3.3 million. The identities of the developers remain undisclosed, and no one has been brought to justice for this egregious deception.

For investors and enthusiasts alike, maintaining vigilance, conducting comprehensive research, and proceeding with caution are paramount before engaging in any investment venture. By drawing lessons from past scams and advocating for accountability, we can work towards fostering a crypto ecosystem that is both safer and more reliable.

Here are guidelines to help you identify and avoid crypto scams, ensuring your safety:

Do your personal research prior to investing in any crypto or participating in ICOs. Scrutinize everything from the project to the people who work on it to the company, seeking transparent information, a robust whitepaper, and a reputable history. Do not hesitate to spend an hour or two just to know what you are investing in.
Utilize trusted crypto exchanges and wallets. Be watchful over unfamiliar platforms lacking a proven track record of reliability.
Beware of phishing attempts where scammers pose as legitimate crypto entities or individuals to steal sensitive information. Make sure to confirm the legitimacy of emails or websites prior to sharing any personal or financial information.
Exercise caution with schemes or projects promising unrealistic or guaranteed returns. If an opportunity seems too good to be true, it likely is.
Enhance security for your crypto accounts and wallets by implementing two-factor authentication. This additional layer of protection requires a secondary verification step, such as a unique code sent to your phone alongside your password.
Never share your private keys under any circumstances.
Stay informed about the latest crypto scams and fraudulent tactics. Follow credible sources like official crypto news websites, forums, and social media accounts to remain vigilant against potential scams and safeguard your investments.

In 2024, keep an eye out for the following prevalent cryptocurrency scams:

Romance scams in the realm of cryptocurrency occur when scammers establish counterfeit profiles on dating platforms to cultivate trust and convince unsuspecting individuals to invest in fraudulent crypto ventures or transfer their digital assets.

AI and crypto scams involve the utilization of artificial intelligence technology to fabricate celebrity endorsements or simulate market forecasts in real time, misleading investors. Exercise caution with platforms that guarantee flawless predictions or present overly polished testimonials, as they may not be genuine.

Rug pull scams, also known as crypto MLM scams, amalgamate pyramid schemes with the unpredictability of crypto ventures. Perpetrators lure individuals to invest in a project and incentivize them to enlist more investors. Once a substantial amount of funds is amassed, the creators vanish, leaving investors facing financial losses. Genuine investments prioritize the asset’s intrinsic value rather than relying on recruitment tactics.

Social media crypto giveaway scams involve the creation of counterfeit profiles or unauthorized access to existing ones, where scammers pledge crypto giveaways in return for a nominal sum of cryptocurrency. Unfortunately, those enticed by these offers never receive the purported rewards. Genuine giveaways typically do not mandate sending your own crypto upfront, so exercise caution when encountering deals that appear excessively enticing.

Scams on Telegram are a prevalent issue. Despite its popularity among crypto traders, scammers exploit the platform by establishing groups or channels impersonating legitimate entities. These fraudulent actors might lure users with false promises of airdrops or warn them of fictitious security risks to extract private keys or funds. It’s crucial to validate the legitimacy of Telegram groups and refrain from disclosing sensitive information or transferring funds based solely on Telegram messages. Additionally, users can aid in combating such scams by reporting suspicious channels, which can then be labeled with a “SCAM” tag for increased visibility and awareness.

Phishing scams have been around for ages, utilizing deceptive tactics to trick individuals. Scammers craft emails or websites resembling legitimate crypto exchanges or wallet services with the intention of pilfering login details and digital assets. Be vigilant for suspicious email addresses, spelling mistakes, or unexpected requests for personal data. When uncertain, it’s safer to navigate directly to the official website rather than clicking on links provided in emails.

Always do thorough research, verify information, and exercise caution when dealing with cryptocurrencies.

Disclaimer

In line with the Trust Project guidelines, please note that the information provided on this page is not intended to be and should not be interpreted as legal, tax, investment, financial, or any other form of advice. It is important to only invest what you can afford to lose and to seek independent financial advice if you have any doubts. For further information, we suggest referring to the terms and conditions as well as the help and support pages provided by the issuer or advertiser. MetaversePost is committed to accurate, unbiased reporting, but market conditions are subject to change without notice.

About The Author

Zhauhazyn is a copywriter and sociology major. Fascinated by the intricate dynamics of Science and Technology Studies, she delves deep into the realm of Web3 with a fervent passion for blockchain technology. Leveraging her expertise in sociology methods and concepts, she brings a unique perspective to unraveling the complexities of the digital landscape.