How to Avoid Crypto Scams

Ignorance is the major reason behind many scams worldwide. It could be that the victim has the wrong information or zero information about the subject matter. However, it is disheartening when people lose their hard-earned money to swindlers or crypto scams. Hence, you need to learn how to avoid crypto scams. Since buying and selling crypto safely is an important safety measure, you can learn about the best app to use for your crypto transactions in Nigeria. Follow closely.

Top 10 Crypto Scams And How To Avoid Them.

Here are ten crypto scams and how you can avoid them;

Fake Exchanges

One of the most reported crypto scams involves using fake exchanges. Swindlers create a fake exchange and ask the victims to make deposits. Some trading platform platforms also pretend to be legit. Once the swindlers receive the deposited income, they disappear, leaving the investors stranded. The anonymous nature of cryptocurrency makes it impossible to trace such transactions once they are authorized.

How to avoid this;

Ensure you are sure about every exchange before you make the transfer.
Only patronize a credible exchange like Ridima.
Verify the authenticity of every platform before you make a deposit.

Ponzi Schemes

Ponzi schemes are one of the most common ways people have lost their money. They are promised a high return on their investments. They also pay the earlier customers to attract more users and fake being a profitable platform. However, more customers come in, and it is difficult to sustain the expansion.

How to avoid this;

Avoid investments that promise high ROIs.
Watch out for unreasonable bonuses on referrals.
Be aware of transparency and non-accountability.

Investment Scams

Investment scams can come as Ponzi schemes, fraudulent advisory services, and fake investment funds. The decentralized and less regulated nature of cryptocurrency makes it easy for these platforms to organize and get away with investment scams.

How to avoid investment scams

Always conduct detailed research before investing.
Scrutinize every investment opportunity, especially those with unbelievable returns.
Verify the legitimacy of those offering the investments
Ascertain their regulatory approvals and reviews from trusted sources.
Never invest money that you cannot afford to lose.

Rug pulls Scams

In crypto, rug pull scams often involve using influencers or deceitful personalities to hype up a new project, non-fungible token (NFT), or coin with promises of prospects or high returns. These scams usually begin with intense marketing campaigns and endorsements from these influencers. As such, potential investors are worried about FOMO (Fear of Missing Out).

It is called a rug-pull scam because the scammers pull the rug once investors start pouring a fortune into the project. This is known as the sudden removal of market support. The scammers will drain liquidity pools, sell off significant portions of the token, or totally disappear with all investments.

How to avoid rug pull scams

Ascertain the project team and verify their background.
Avoid projects with anonymous developers.
Beware of projects with unexplained price surges.

Fake Initial Coin Offerings (ICOs)

Initial Coin Offerings (ICOs) are a way to raise capital for blockchain projects. However, some scammers have become fraudulent with this godly innovation for their gains. The organizers are looking for eager investors who will make lofty pledges. These crypto platforms may even have a compelling website, a persuading white paper, and a team of “experts.” However, it is all a mirage, as every effort is an opportunity to steal your hard-earned money.

How to avoid fake ICOs

Ensure thorough research before you invest.
Verify the credibility of the project team, their online presence, and their track record.
Verify the credibility of the project team, their online presence, and their track record.
Check if reputable third parties have audited their smart contracts.
Look out for feedback from the Crypto community on forums and social networks.

Pump and Dump Scams

Pump and Dump schemes are common in the crypto space. It begins with a thrilling ascent, and everyone expects it to peak in short space. Unfortunately, there is a sudden plunge, and investors are left with depleted wallets. Sometimes, the organizers artificially boost the asset’s price before their quick sell-off at its peak. As such, only newcomers are always at a loss.

How to avoid pump and dump scams

Always be cautious before any investment.
Conduct your research, especially when the hype is intense.
Watch out for trading volumes and significant sell-offs.

Phishing Scams

Phishing is a persistent form of digital deception on the internet. Oftentimes, it comes as an email or a social media message to alert you about a special offer. The messages could be legitimate, but that’s only the beginning. You will be redirected to a duplicated website where you will be asked to provide your login details and private keys.

How to avoid phishing scams

Always confirm the URL of websites before you input important information.
Enable two-factor authentication on your accounts.
Learn about common phishing skills.

Blackmail Scams

In blackmail scams, the swindlers threaten to reveal sensitive information and demand a ransom in Crypto to protect you. They also claim to have records of your visits to adult websites and threaten to expose such details unless you share your private keys or send crypto.

How to avoid Blackmail Traps

Ignore blackmail attempts.
Report and block such accounts.
Use strong passwords and enable your two-factor authentication.

Social Media Scams

Social media platforms are full of crypto scams from impersonation accounts. These scams exist as fake giveaways and fraudulent investment schemes.

How to avoid Blackmail Traps

It’s better to avoid crypto-related offers on social media.
Ascertain the authenticity of any account and its claims.
Report and block any suspicious accounts.

Impersonation Scams

Another way swindlers scam people is to pretend to be trusted figures, such as customer support or influential personalities. Once they trick their victims, they will request cryptocurrencies or private information.

How to avoid Impersonation scams

Be sure about the identity of anyone asking for sensitive information.
Use the official support channels to resolve any issue directly.
Avoid unsolicited messages or calls.

Conclusion

The universal solution to avoiding crypto scams is to know how they work and how to avoid them. To avoid being scammed, patronize the trusted and credible Ridima. Stay vigilant and avoid sharing sensitive information with third parties. Be safe!