How to Stay Safe and Avoid Scams with Online Tokens and Cryptocurrencies

According to the FBI, cryptocurrencies scam and safety costs Americans more than $5.6 billion in 2023 alone. Roughly half of these concerned investment fraud, with other dirty tricks including extortion, identity theft, and tech support ripoffs.

Here’s how you can avoid falling into similar traps.

Safeguard Your Private Keys

First things first, before we even think about potential scams, you should understand some simple cybersecurity concepts, like public and private cryptocurrency keys.

The security of your assets is inextricably linked to how safe you keep your private keys. If anyone gains access to them, it’s game over. As such, they should ideally be stored in a safe and kept apart from your cold storage hardware.

Use a Secure Cold Storage Wallet

On that note, taking your cryptocurrency offline is a top priority. “Not your keys, not your coins” has become a cliché for a reason. You must have self-custody of your assets. Or, in other words, keep them in cold storage.

It’s a major risk centralized exchange, they are at risk. It’s that simple. Should the exchange be hacked, you can lose the money. Alternatively, they could suddenly deny any withdrawals, as we saw in the case of FTX.

Read up on the most reputable cryptocurrency wallets and invest in some hardware to keep your digital assets as safe as possible.

Avoid Get Rich Quick Schemes

Okay, let’s talk in more detail about avoiding crypto scams. The FBI reported approximately 69,000 such cases in 2023, around half of which were related to investments.

It’s incredibly easy for scammers to use social media platforms like Facebook to push fake adverts promising quick returns on investment. Often, they’ll try to use famous people in the world of technology, such as Elon Musk, to promote them.

Even if they’re not using celebrities, it’s not difficult to set up legitimate-looking profiles on LinkedIn or other platforms, to create the image of a reputable business person. Make sure you research the people involved throughout and find testimonials from real people.

The bottom line with “get rich quick” investment opportunities is this: if it looks too good to be true, it almost certainly is.

Avoid Urgency

If the person contacting you is trying to apply pressure – perhaps with an “exclusive” or “limited time” opportunity, it’s important to take a step back. That is a common trick when someone is running a scam.

They’re trying to make you abandon your senses and stop thinking critically. Always take plenty of time for any decision that involves sending cash or cryptocurrency. Speak to your family, business partners, friends, or colleagues, and take the time to do proper research first.

Verify Company Information

Part of the due diligence process is to verify any information provided to you directly with that company. For instance, if you’re telephoned by someone claiming to be from your bank, take their name and title, then end the call.

Look up the relevant number and call it yourself. Ask to speak to the named person in the department they claimed to be from. This way, you can be sure you’re not falling victim to a hoax.

If you’re not already familiar with the company, you’ll need to put in some research. If you’re not finding much information, it’s most probably a scam.

Do Your Research

This is true of anything involving money. You must investigate the people and companies who’ve contacted you properly, performing thorough due diligence.

You’re aiming to establish whether the company and people who contacted you are real. And whether or not you can find people who’ve already been successfully involved in whatever is being proposed.

Don’t Believe Everything You Read

When performing your research, you must speak to real people that were already involved. It’s not enough to simply read a testimonial, as plenty of what you’ll see online isn’t real.

Around $8.2 billion is spent annually on affiliate marketing in the US alone. This is where a third party, or “affiliate” of a brand, pushes products and services on behalf of the company.

You’ll read a review of a product, for example, that makes you think it’s worth purchasing. Then you click a link to the relevant website and complete the transaction.

The problem is that content creators are financially incentivized to exaggerate, or even lie completely about what they’re selling. For example, an iGaming writer could intentionally overlook a casino’s security failings, getting you to focus on the generous welcome bonus or fun games.

With that in mind, it’s hard to trust what you read online. It’s much safer to speak about a possible investment with a real person who has already been involved.

Ignore Extortion Attempts

Extortion is responsible for a significant chunk of those 69,000 cases of cryptocurrency fraud, according to the FBI. Yet these scams are almost always extremely easy to spot.

Watch out for seemingly detailed, but very vague emails, for example. They tend to focus on subjects that many people are likely to have taken part in, making it seem very personal.

Extortion attempts usually claim to have compromised your device and logged your activity, often on adult sites or something equally embarrassing. But they never specify any hard facts, such as times, dates, or locations.

They will, of course, demand payment in cryptocurrency. But these scams are just the modern-day equivalent of the Nigerian prince, and can easily be disregarded.

Don’t Give Out Your Credentials

This should be obvious, but people consistently fall for it. One of the most obvious tell-tale signs of a phishing scam is when you’re asked for a username or password. Never, under any circumstances, hand over your usernames or passwords.

If you receive an email that links to a web form, check the URL carefully. Make sure that it’s not a homograph attack, where letters are subtly switched.

For instance, the address might use the Cyrillic letter а instead of the Latin a, diverting you to a fake site that will trick you out of handing over valuable information. These incredibly subtle tricks are much easier to fall for.

Dominic Field

Dominic Field is an experienced writer, editor and translator, whose main areas of expertise are cryptocurrency and iGaming. Based on the island of Boracay in the Philippines, he creates compelling content in both English and Tagalog (Filipino).

Follow us :