How to stay safe from crypto scams

By Edul Patel

Cryptocurrency is one of the new emerging asset classes that has gained a lot of popularity in the last two years. With scammers looking to make a quick buck, there has been an increase in crypto-related scams per season. These scammers are trying to take advantage of people’s lack of awareness of the sector. While several governments are working to introduce progressive regulations to control such illegal activities, it is also important for investors and traders to exercise caution in the end. Until there is a good amount of clarity around cryptocurrency regulations, these five tips can help you avoid falling victim to this type of scam.

1 DYOR or do your own research

Before investing in any cryptocurrency, it is important to do your own research. Investors should spend some time learning about the project, the team and the technology. It is also important to check the credibility of the information sources, such as the project’s official website, whitepapers and social media channels. One must avoid projects that promise unrealistic returns or use complex jargon that is difficult to decode and understand. It may be a good idea to look for projects with a proven track record in development, openness and community support.

2 Use trusted exchanges and wallets

Cryptocurrency exchanges and wallets are the most vulnerable points in the crypto ecosystem. Hackers can steal funds by exploiting vulnerabilities in the platforms. To avoid this, investors should use reliable exchanges and wallets with proven security. Look for exchanges that offer features like two-factor authentication, encryption, and cold storage. When using a new exchange or wallet, make sure you check the reviews and do your due diligence to make sure it’s legit. In addition, since fake applications can also end up in the Google Play Store or the Apple Store, it is also a good idea to download the apps of exchanges and wallets from their official websites.

3 Use two-factor authentication (2FA)

Two-factor authentication (2FA) adds an extra layer of security to your account. This involves using a password and a secondary authentication method, such as a fingerprint, face scan or authentication code. By using 2FA, you make it much more difficult for hackers to gain access to your account. Most exchanges and wallets offer 2FA as an option, so be sure to enable it on your accounts.

4 Do not respond to unwanted messages

Scammers often send unsolicited messages, either via social media or email, to help you invest in a new cryptocurrency. Be careful with these messages and never click on links or download attachments from unknown sources. Investors should always verify the authenticity of any communication before taking any action. You can check the sender’s email address, verify the sender’s identity and check the message’s content for suspicious elements.

5 Keep your private key safe

Never give out your personal information to anyone and be careful with requests for sensitive information. If someone asks for personal information, it’s probably a scam. Avoid sharing your private key with anyone to better protect your crypto assets. You should also not store your private key in any digital format as it can easily be accessed or stolen. A better approach is to store your private key in a hardware wallet or offline cold storage, which provides a high level of security against hacking and theft.

The author is co-founder and CEO, Mudrex

Cryptocurrency is one of the new emerging asset classes that has gained a lot of popularity in the last two years. With scammers looking to make a quick buck, there has been an increase in crypto-related scams per season. These scammers are trying to take advantage of people’s lack of awareness of the sector. While several governments are working to introduce progressive regulations to control such illegal activities, it is also important for investors and traders to exercise caution in the end. Until there is a good amount of clarity around cryptocurrency regulations, these five tips can help you avoid falling victim to this type of scam.

1 DYOR or do your own research

Before investing in any cryptocurrency, it is important to do your own research. Investors should spend some time learning about the project, the team and the technology. It is also important to check the credibility of the information sources, such as the project’s official website, whitepapers and social media channels. One must avoid projects that promise unrealistic returns or use complex jargon that is difficult to decode and understand. It may be a good idea to look for projects with a proven track record in development, openness and community support.

2 Use trusted exchanges and wallets

Cryptocurrency exchanges and wallets are the most vulnerable points in the crypto ecosystem. Hackers can steal funds by exploiting vulnerabilities in the platforms. To avoid this, investors should use reliable exchanges and wallets with proven security. Look for exchanges that offer features like two-factor authentication, encryption, and cold storage. When using a new exchange or wallet, make sure you check the reviews and do your due diligence to make sure it’s legit. In addition, since fake applications can also end up in the Google Play Store or the Apple Store, it is also a good idea to download the apps of exchanges and wallets from their official websites.

3 Use two-factor authentication (2FA)

Two-factor authentication (2FA) adds an extra layer of security to your account. This involves using a password and a secondary authentication method, such as a fingerprint, face scan or authentication code. By using 2FA, you make it much more difficult for hackers to gain access to your account. Most exchanges and wallets offer 2FA as an option, so be sure to enable it on your accounts.

4 Do not respond to unwanted messages

Scammers often send unsolicited messages, either via social media or email, to help you invest in a new cryptocurrency. Be careful with these messages and never click on links or download attachments from unknown sources. Investors should always verify the authenticity of any communication before taking any action. You can check the sender’s email address, verify the sender’s identity and check the message’s content for suspicious elements.

5 Keep your private key safe

Never give out your personal information to anyone and be careful with requests for sensitive information. If someone asks for personal information, it’s probably a scam. Avoid sharing your private key with anyone to better protect your crypto assets. You should also not store your private key in any digital format as it can easily be accessed or stolen. A better approach is to store your private key in a hardware wallet or offline cold storage, which provides a high level of security against hacking and theft.

The author is the founder and CEO, Mudrex

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