Avoiding Crypto Scams – Editors select and review products independently. If you buy through affiliate links, we may earn commissions, which help support our testing.
Every year, when Thanksgiving dinner rolls around, many of us have to perform various feats to make it through the meal without incident. Whether it’s guiding the conversation away from politics, shutting down the airing of grievances, or nodding your way through someone’s long-winded description of a get-rich-quick scheme, remaining polite and beloved by your loved ones is the ultimate goal. Happily, this year my family and I saw very little drama at our dinner table, aside from a confused relative who thought the PC in was for “politically correct.”
Avoiding Crypto Scams
Aside from explaining what digital currencies are, showing my family members how to buy Bitcoin, and teaching them how to manage their cryptocurrency, I also found myself cautioning everyone about crypto scams. As with any hot new thing, some people want to make a buck from it by any means necessary. writer John Bogna goes into detail, noting that with just a few clicks, you can lose your life savings to a cartoon pup or a fraudulent coin tied to the latest popular streaming TV show(Opens in a new window) .
Crypto Scams: 8 Ways To Lose Your Crypto And How To Avoid That
Before you decide to put your money into a cryptocurrency, remember that those markets are volatile, and once your money is gone, it’s gone. The protections in place for fiat currencies don’t exist for cryptocurrencies.
It can be hard to ignore advice from billionaires and influencers online, but you should do your own research before investing when it comes to your money. Start with ’s guide to buying, selling, and managing Bitcoin. Don’t take any information online at face value. If an investment sounds too good to be true, it’s probably a scam.
Treat anyone who contacts you directly to ask for payments in cryptocurrency or offers you an investment opportunity regarding crypto with extreme caution. Don’t trust emails even if they appear to be from government officials, public figures—anyone who asks you to pay for anything using cryptocurrency.
You probably have stories about people who lost at least a few Bitcoins due to losing control of their virtual wallets. If you do own cryptocurrencies, never share your private key or seed phrase with anyone. Instead, we recommend storing that information somewhere offline.
Common Crypto Scams And How To Avoid Them
Use multi-factor authentication on your crypto wallet to try to keep the bad guys out. It’s not a sure-fire solution, as we learned after the Coinbase hack, but it gives you a fighting chance against many attackers.
Keep an eye on the URL for the websites you visit related to crypto. Many phishing scammers copy the URL of legitimate sites and swap out letters or numbers. You also want to ensure the site is secure, so look for the little lock symbol next to the URL.
Remember to turn on your antivirus software. The best AV we’ve tested looks out for phishing scams on your behalf and also blocks malicious URLs.
You may see crypto offers that require an up-front fee. Reject them all, and especially avoid “offers” involving a fee to be paid in cryptocurrency. Many of the investment opportunities in the crypto realm are scams. Before investing anything, you need to check the company’s website to find out how they protect their customers and look for reviews from other investors.
Common Social Media Crypto Scams
Changing from an online life protected by passwords to one protected by a security key can feel a little less secure. What happens if you lose your key? What if someone steals the key?
As senior security analyst Max Eddy writes, these are legitimate concerns about security keys. Most attackers online do not have the means to track down an individual and steal their security key. It’s not impossible, though, which is why you should also store strong passwords stored in a password manager. That way, even if a thief gets your key, they can’t get your passwords, and vice versa.
You could also just lose the security key, which is far more likely. Losing your security key is not the end of the world. Many services that support security keys require you to enroll multiple multi-factor authenticators, so you already have a secure backup in place. If that doesn’t help, find a device you are still logged into and unenroll the key, or add a new multi-factor authentication option.
How To Identify And Avoid Common Crypto Imposter Scams
As a security analyst, I report on security solutions such as password managers and parental control software, as well as privacy tools such as VPNs. Each week I send out the SecurityWatch newsletter filled with online security news and tips for keeping you and your family safe on the internet.
Before joining , I wrote about tech and video games for CNN, Fanbyte, Mashable, The New York Times, and TechRadar. I also worked at CNN International, where I did field producing and reporting on sports that are popular with worldwide audiences. Yes, I know the rules of cricket.editors select and review products independently. If you buy through affiliate links, we may earn commissions, which help support our testing.
If it’s good enough for Jack Dorsey, Elon Musk, and Tim Cook, surely you can win big in the crypto game, right? If you’ve got some money to burn, perhaps, and we have a guide for getting started. But you could be just a few mouse clicks away from losing your retirement funds to a cartoon dog(Opens in a new window) or a “coin” tied to a popular streaming TV show.
With changing prices, coin-based scams, and misinformation from influencers, cryptocurrency is a volatile market, and you need to be careful. According to the Federal Trade Commission (FTC), US consumers lost more than $80 million to cryptocurrency scams in the six months between October to March 2020.
How To Avoid Falling Prey To A Cryptocurrency Scam.
While some scams are pretty easy to spot, others aren’t as obvious. And because the protections in place for fiat currencies like the US dollar don’t typically exist for crypto, once that money’s gone, it’s gone for good. Here’s what to look out for and how to avoid getting scammed.
How can you protect yourself from crypto scams? Here are a few things to consider before going all-in on Bitcoin, Ethereum, or other digital currencies.
While some crypto scams are unique to the world of digital currency, many of them are twists on existing scams. Some target people looking to invest in cryptocurrency, while others rely on spreading digital cash to steal money without getting tracked.
If someone contacts you with a “once in a lifetime” investment opportunity, you should run the other way. They’ll often claim their company or app is the next big thing and that you can get rich if you get in on the ground floor. They’ll sell you hard on their product and couple that sales pitch with a sense of urgency, then disappear with your money.
Here Are 2 Popular Crypto Scams—and How To Avoid Them
Sometimes this scam takes the form of “investment managers” offering to help grow your assets if you hand them over to invest. They’ll set up what they claim is an investment account for your crypto, but you won’t be able to access your money unless you pay them a fee.
Other investment scams in the crypto space operate like pyramid schemes. The scammer will convince you to pay them in crypto for the right to recruit other people into their program, claiming you’ll make even more money once you bring in others. They claim the more you “invest, ” the more you’ll make down the line, but all you end up with are broken promises.
Sometimes a scam company will launch a new cryptocurrency coin or token, claiming it solves some critical unmet market needs. They’ll pitch you on their product and ask you to buy into their coin as an investment that will pay off a hundredfold later, then vanish.
When investing, check out the company’s website to see what they do to protect their customers. Be on the lookout for abundant grammatical errors and typos, which can signal a scam. Search for verifiable reviews from public sources. Searching the company name with “review” or “scam” is a good start.
Blockchain & Fraud Prevention: Strategies To Overcome The Cryptocurrency Scam
Where conventional phishing scams go for your email or banking login credentials, crypto phishing scams try to get the keys to your crypto wallet. These can also be labeled “technical support scams” since the person running the scam will often pose as tech support to try and get your information.
Representatives from fake companies—or claiming to be from legitimate ones—will contact you and offer to help manage your crypto if you give them your login credentials. They might also say they need remote access to your computer or other device or want you to send crypto to a suspicious wallet address.
Never provide sensitive information to people who make unsolicited contact, no matter how convincing or urgent they may seem. If they say they’re with a legitimate company, double-check their information. Coinbase, for example, tells people(Opens in
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