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Cryptocurrency Scams: How You Can Detect and Avoid Them

Similar to any investment, there are risks trading poses on the crypto market. For those who enter the crypto market, understanding Bitcoin and other cryptocurrencies can be challenging, which makes them the perfect target for scammers.

There is a rather massive space for fraud and manipulation, and potential investors must educate themselves regarding the volatile character of cryptocurrency and when they are getting misleading information. Throughout the years, many issues have been brought forward with regards to the cryptocurrency and ICO markets, particularly concerning the lack of investor protection compared to traditional markets.

How to Detect a Crypto Scam

Here are a bunch of useful tips to assist new or potential investors in detecting bitcoin website scams:

  • Verify whether the website connects securely with the https (not http) extension. If the address starts with ‘http’ rather than with ‘https,’ the information you send to the website is not secure.
  • Ensure you can see the term ‘secure’ or a padlock icon in your web browser’s address bar – this shows that the site is indeed secure. If the URL has observable spelling errors, the possibility that the website is fake is high.
  • Also, if you find bad grammar, awkward phrasing, or spelling mistakes on the site, proceed with caution.
  • If the website pledges to offer you abnormally high profits, again, proceed with caution. This may not always mean there’s a scam, but it could be a red flag.
  • Find the ‘About Us’ page and check if there’s any info on the people who work for the firm or whether the company is registered. If there is little or no information, proceed with caution.
  • Verify if other decent websites link to the platform you’re on – this will indicate that the website can be trusted and is reliable.
  • Always look for reviews or testimonials from users. The cryptocurrency community often spreads the news about scams really fast.
  • Beware of websites that claim various celebrity endorsements – numerous investment scams fake celebrity support.
  • Learn as much as you can about cryptocurrency exchange platforms and how they work. The cryptocurrency market is complex – before you consider investing, do the research.

Three Main Crypto Scams You Should Beware Of

Phishing

Phishing is the most ordinary of all Bitcoin and crypto coins-related scams. This fraudulent activity usually happens when an investor receives an unrequested email that claims to be coming from the bank or your crypto exchange platform or even the wallet provider.

The email includes a link that takes you to a website that looks exactly like the exchange or wallet you usually use. As soon as you enter your account details on the page, the scammers have what they need to log into your real account and steal your assets.

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Fake Exchange Platforms and Wallets

Beware of Bitcoin exchanges – some will lure new investors with promotional offers that sound idealistic, others pressure users to create an account on the website and deposit funds, and some even offer promotional bonuses. There are also complex fake wallet applications, enabling the user to download and register on it. These apps are developed to steal essential account data.

Fraudulent ICOs

Numerous investors are interested in getting high returns from the crypto market. For those who want to get in on the ground floor, the simplest option is to purchase coins or tokens on an ICO.

Scammers have started to create fake ICOs and convince new investors to purchase a cryptocurrency that doesn’t exist. This is why it is crucial to read testimonials and reviews to check the legitimacy and understand more about the ICO.

The Bottom Line

We recommend you to do as much research as possible into any cryptocurrency and project you are interested in. Crypto coins are speculative, intricate, and involve significant risks. Performance is sometimes unpredictable, and there is no guarantee that high-returns will be made on every try.

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