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How to avoid Cryptocurrency scams

By Gaelichymns | Cryptogael | 22 Jan 2021

More and more people are getting interested in Cryptocurrency every day, and with that comes multiple issues that the cryptocurrency community must face. One of the major ones being people looking to take advantage of those less educated, and scamming them out of money. While cryptocurrency is never going to be 100% foolproof, and we're all bound to make mistakes at one point, it's important to try and avoid scams as much as we can. Here's some top tips to keep safe.

Do some research before investing

Don't just read the description of some coin and immediately invest because it's cheap. Look into the company: what projects have they done before? Have they gotten into any legal issues? What are other people saying about their projects? There's a wealth of resources to look for people discussing these kinds of issues. Resources like Reddit & /biz/ can provide lots of different perspectives, experiences, and tips that can help you. Remember, there are also going to be scammers in these communities as well and some people love to prevent themselves as an expert even though they're not. Never take anyone else's word as gospel, it's just their opinion. But these opinions can help you make more informed decisions such as staying away from scam projects, some resources to check out, and new tips for increasing your profit. Being in a community can also make the cryptocurrency experience less lonely, it's always nice to chat about the things we're doing.

Sounds too good to be true? It probably is

A lot of people are going to promise you lots of free cryptocurrency if you sign up to their links. It sounds appealing, but chances are they're just looking to take your details or try and put malware on your computer. Never download 'play this game and get free cryptocurrency' programs onto your computer or phone. If you're lucky, they might just be inoperable and loaded with ads. But there's a good chance that these programs have viruses and other malware that can do a lot of damage. Airdrops are really popular in cryptocurrency communities, and they're especially popular with scammers. Chances are, a lot of these airdrops are just looking to take your details or to try and trick you into investing money into their product. 

Look at this Reddit user's experience of Airdrops: "So I took part in 14 airdrops reportedly worth '$2,827.90'..". As they highlight in their post: "So we’re all aware of the Uniswap airdrop that took place earlier this year, where some lucky folk woke up to over $1200 worth of UNI dropped to them in their wallet – worth over $3,000 at its peak – simply for interacting with the Uniswap platform prior September 1st 2020". These airdrops can be real, but there's also a huge chunk of them that are fake. Don't just sign yourself up to every airdrop that you see, because chances are you're just giving your details away to scam after scam.

Be wary of hidden affiliate links

Affiliate links are not the enemy, there are a lot of legitimate projects and promoters that use affiliate links that can provide benefit for you. There is however an issue with people masking their affiliate link. While someone hiding their affiliate link isn't an indicator that the project is a scam (lots of people unconnected to a project can get affiliate links depending on the platform) but it does show that the user is untrustworthy. If they're connected to the project itself, then this is another issue to be aware of. Scammers can use affiliate links under different accounts to see which communities are more likely to click on their affiliate links. This could start off with legitimate projects to build up analytics, before they start promoting their scam projects. 

Hyperlinks are a really convenient way to include links in your text without clogging your post up with links. But, an issue is that you can change any text to another url, including text that looks like a link. For example, I could post: That looks like a straight google url, but once you click on it you'll see that it sends you somewhere different to the main google search page. Some people can put a straight up link to their project, but once you click on it you'll find that you've clicked their affiliate link giving them bonuses if you sign up. 

Does someone only promote affiliate projects? Stay clear!

This is a tricky one, because there are a lot of influencers who use a lot of affiliate links to promote legitimate projects. But they started off by building up an audience, creating useful content, and then made partnerships with projects. If all someone is contributing is affiliate links, then they're just in it for themselves. While this doesn't mean what they're promoting is necessarily a scam (again, most projects allow for anyone to get an affiliate link) it does show that they don't care about what they're promoting. This could mean that they have signed up for a lot of scam projects, and are now trying to convince you to sign up because they think they'll get something. They don't care what you get out of a project, or how safe a project is for you to sign up, they're just looking out for themselves.  

Be wary of people looking to give you advice in private

If someone really has good advice, why are they trying to keep it a secret in private messages? Chances are they're hoping to avoid more experienced cryptocurrency users calling their scams out. Some of these people will offer to help you set up a cryptocurrency wallet, the issue is that they can then access your wallet and withdraw the money you've put into it because you've given them the phrases to access your account. These people can seem really professional, polite, and knowledgeable but they can pressure you into investing into things that you know very little about - and it's a guaranteed way of them making money and not you. 

While this isn't to say that everyone that DMs you with advice or information is going out of their way to scam you, it's always worth considering why they didn't think to comment on this issue more publicly. In telegram, people can make accounts pretending to be admins and privately message you in the hopes of trying to scam you. Always be careful of who you're messaging and the information you're giving them. Never give another person information about how to access your wallet, if someone robs those funds you can't get them back. Admins of (legitimate) projects will not ask you to send them hundreds of dollars in order to resolve any issues that you're having with their project but scammers definitely can try and pressure you into sending money to 'resolve' issues.

Remember, no cryptocurrency 'expert' is going to direct message you out of the blue and give you the secret to earn thousands.

Spammers and scammers go hand in hand

Spammers are a huge issue for any social media platform, and it should be noted that spammers are in no way a fool proof indicator of whether a project is a scam. But, they can give you that extra warning. Look to see what projects spammers are consistently promoting. Scammers can pay for bots to spam links to their project, including creating posts. Just because someone has taken the time to create a low effort post with a graphic or two, doesn't mean that this 'person' isn't a bot. A lot of sophisticated bots can create posts with headers, tags, and even a body of information. It's not just someone in the comments spamming links that you should be careful about.

Not everyone is going to have perfect English, but bots won't just make some spelling or grammar mistakes. They'll often write a lot of gibberish that's just about including as many keywords as possible. They may never reply to comments at all, or if they do then they won't respond appropriately (e.g. talking about something completely different to the comment they're responding to). If a project has a lot of bots promoting it, then there's a chance that the project they're promoting is a spam. Take a note of affiliate links too. Some people will get bots to spam their affiliate links. You could have multiple bots promoting the same user's affiliate links to get them bonuses. While the project they're promoting might be legitimate, they're using less than legitimate methods of getting their affiliate link out there.

If the only people you ever see talking about a project is spammers, then again it's a good indicator that the project isn't legitimate. There's going to be spammers that talk about Bitcoin, Ethereum, etc. But there's also a lot of verifiably real people speaking about these things. If you can't find any non-spammer talking about the project then stay clear. Look to see what their platform is like. If they have a forum, they may get bots to create lots of threads and posts to make it seem like they have an active community. But if you click onto any of these threads you'll quickly realise that it's just bot after bot. This is a shady business practice that you should stay clear from.

Crypto mining and malware

There are a lot of legitimate projects to connect with when it comes to mining cryptocurrency. But as always, there's scammers looking to take advantage. Some of these scam projects will say that you can just use it on your laptop and it will never slow your computer down at all. They may even offer to just run in your browser and mine crypto while you search. Again, there could be legitimate projects out there that make these claims. But there's a lot of things to be wary of. If you give something access to your browser, there's a chance that it could have a keylogger. A keylogger will allow the owner of the project to be able to see what keys you're pressing on which sites. This could mean giving someone your passwords, your personal information, or even your credit/debit card details or access to your paypal / banking accounts. 

If you download a miner, there's a lot that could go wrong. It could slow your computer down so much that it makes it practically unusable. It could just mean that you've turned your computer into a miner for their account (meaning they'll get crypto and not you). Or you could face some very serious malware and viruses such as ransomware. "Ransomware is a form of virus that attacks your PC and locks parts of the system, sometimes irrevocably blocking access to valuable photos and important documents. Ransomware may lock your system entirely, preventing you from getting past the warning message." - Which? Computing

To summarise

  • Always do your research. Never invest, install software or extensions, sign up to a site, without doing research on it. 
  • Remember that people giving advice aren't necessarily experts, and they could just be in it for their own financial gain
  • Be wary of those that make content solely so they can gain from it (e.g. only affiliate link posts)
  • Never give other people access to your wallet
  • If something sounds too good to be true, it probably is.
  • If someone is giving advice in private, question why they didn't publicly comment their advice
  • Always double check that the person is who they say they are. People will pretend to be customer support / admins / staff for projects in order to trick you
  • If you fall for a scam, write about it. This will help protect other people and it will stop the scammers earning as much money from victims
  • Use spambots as a means of seeing what kind of projects are using illegitimate methods of promoting themselves
  • Get involved in different cryptocurrency communities. It's a good way of staying up to date on legitimate projects, things to be aware of, and to have fun!

Note: This is an article I originally posted on Uptrennd. I am in the process of transferring my writing from there to here, and this is just to provide some clarity. You can view the original post on Uptrennd here:

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