Though in many ways cryptocurrencies are more secure than fiat systems, this doesn’t mean that your crypto assets are automatically immune to fraud. In fact, in April this year, the FBI issued a press release warning of the expected increase of cryptocurrency-related scams – a prediction that, unfortunately, largely checked out.
Although there’s no guaranteed way to keep your hard-earned crypto safe, there are several things you can do to protect yourself against scams and fraud.
Avoid schemes that promise unrealistic results
As the saying goes, if something seems too good to be true, it probably is. While there are a number of legitimate and proven ways to turn a profit on blockchain, they all require hard work, expertise, and time.
Avoid websites and offers that promise to turn you into a millionaire overnight – or anything to that effect. These schemes can be quite convincing on the surface, but don’t let the flashy website fool you: if the return seems unrealistic, don’t engage.
Choose your exchanges and wallets carefully
It’s no news to anyone that millions of dollars have been lost to fake exchanges and wallets. It’s safest to stick to popular, reputable exchanges and non-custodial, licensed crypto wallets with a good level of transparency.
Despite popular opinion, not all non-custodial wallets are difficult to use. OWNR Wallet, for instance, offers an intuitive interface suitable even for novices, without compromising on security. OWNR also holds licenses for a virtual currency wallet service (FRK000559) and exchanging virtual currencies against fiat (FVR000645), as well as an MSB license to sell cryptocurrency in the U.S. Testnets for developers are also available for all of OWNR’s 11 supported coins, providing a degree of transparency.
Don’t fall for phishing emails
If you’ve ever seen a phishing email, you’ll already know that this is easier said than done. Nowadays, phishing emails can appear entirely genuine – perfectly imitating the real thing. If you receive an email purporting to come from a service provider, urging you to take some form of action – such as pay an outstanding amount or even reset your password – take your time with verifying its authenticity.
Before you do anything else, log into your account on the service provider’s website and check if everything seems fine. You can also analyze the sender’s email address: if it features too many numbers or symbols, it’s probably fake. The ultimate test is to contact the service provider directly and verify whether they really did send you that message.
Whatever you do, don’t click on any links within the message until you’ve confirmed that it’s genuine.
Beware of malware
Clicking on links and opening attachments in scam emails happens to be one of the ways in which malware can be downloaded onto your device. Malware enables hackers to gain access to your private files and information, enabling them to drain your funds.
The best way to defend yourself against malware is to use a reputable anti-malware software, such as Norton or Malwarebytes. Keep in mind that even the best software can still be fooled, tough, and avoid clicking any suspicious links or downloading files from unknown sources.
Research ICOs carefully
Fake ICOs are a popular, high-level crypto scam, stealing millions in funds from unsuspecting investors. To verify the authenticity of an ICO, conduct thorough research – with particular focus on analyzing the whitepaper and any complimentary resources it may include. If the plan is not feasible and the whitepaper poorly written, too brief, or altogether missing, you’re probably dealing with a scam.