Are You Being Scammed? Take the Crypto Scam Quiz

Scammers use all sorts of tactics to lure investors into a false sense of security in an attempt to compromise your accounts, identity, or outright steal your digital assets.

Learn how you can identify the red flags of a potential crypto scam attempt by taking our quiz below:

Crypto Scam Quiz

How to avoid crypto scams

Cryptocurrency scams, like other financial scams, prey on the user to make the mistake which enables them to compromise your credentials and assets.

Learning how scammers operate can help you identify when something is suspicious or out of place, minimising the successful attempt of a scam in the first place.

Below are some key things to keep in mind:

• Scammers will often claim guaranteed profits or returns. Do not trust anyone, individuals or organisations who claim they can guarantee or make profit quickly with your assets.
• Be wary of excessive marketing. While all businesses promote themselves, an overly excessive marketing campaign – especially one that makes extravagant claims is a sign of a potential red flag. It’s best to do your own research before proceeding.
• Lack of credibility in the whitepaper. The whitepaper of any crypto project serves as the blueprint for its purpose and roadmap for the future. If a crypto project doesn’t sound convincing, ambiguous, – or worse, doesn’t exist – take that as a red flag and tread carefully.
• Anonymous or unnamed team members. This is an easy one to find out. With most reputable projects or businesses, the key team members behind it are often transparent and publicly available. Scan their website and search for an active presence on social media, to see who’s running the project. If they are credible, they shoulnd’t have anything to hide.

How to protect yourself from crypto scams

As crypto scams are getting more and more sophisticated, it’s recommended you take preemptive measures to protect yourself.

• Secure your crypto wallet. Your digital assets are stored in your crypto wallet. Whether you choose to store crypto with an exchange – or even better, a self-custody wallet – never share your private keys with anyone.
• Protect access to your wallet. Your wallet and private keys serve as the only access point for your cryptocurrencies. Be sure to activate additional security measures such as 2FA (Two-Factor Authentication) and if possible an additional hardware security key such as Yubikey, which will require your live authentication before granting access to your account.
• Do your own research. While this sounds obvious, it’s also the most important one. If a crypto project sounds unfamiliar, take time to step back and research their whitepaper, community support, any institutional backing, social media presence, and more. Reputable crypto projects will make this easy, while suspicious ones will make it hard or ambiguous – in which case you should tread carefully before proceeding.
• Invest in a hardware cold wallet. A cold wallet stores your private keys in a hardware device that requires your authentication before executing a transaction, accessing your assets, and more. It also secures your keys in an offline environment, disconnecting it from potential malicious attacks. Consider cold wallets from trusted brands such as Ledger and Trezor. Browse our shop for cold wallet options.

Common cryptocurrency scams

Below are some of the most common cryptocurrency scams to avoid:

• Phishing scams. These often target sensitive information, such as your passwords, private keys, and other credentials in an attempt to acquire access. They’re also well hidden and often resemble emails or websites from real companies, luring users into a false sense of security and stealing their information.
• Pump and dump schemes. The term pump and dump refers to a particular coin or project whose marketing efforts are overly hyped with the intent of creating a FOMO (Fear of Missing Out) in the community and inflating its value. Once the value has reached its peak, the scammers will then sell their holdings resulting in an immediate crash.
• Giveaway fraud. A type of scam where scammers broadcast a guaranteed profit or return for the amount of cryptocurrency you send to them.
• Multi-Level Marketing (MLM). In short, MLM schemes compel its participants to send them cryptocurrencies in exchange for the right to recruit others into the program, which in turn rewards you with more crypto. These claims are false guarantees, as with any project that compel you to send crypto in exchange for profit.

Further reading: Explore topics on crypto security.