Avoiding Crypto Scams

Scams have always existed and are very common in the cryptocurrency world. According to a research by Chainanalytics, a blockchain data analytics business, crypto fraudsters took $14 billion in total in 2021, compared to $7.8 billion in 2020. What typical cryptocurrency scams exist, and how can you avoid them in light of this?

Malicious Smart Contracts

Since smart contracts are merely computer code that has been programmed to carry out a certain task, they are susceptible to bad intent. The smart contract can perform a function that allows it to take money from your wallet when you approve a contract. Since they can entice victims with a free NFT and then take everything from their wallets once they agree the website's contract, "free mint" NFTs are particularly notorious for doing this. If a contract gives you the creeps, it's best to err on the side of caution.

Phishing Scams

When someone gives you a harmful link in order to obtain your personal information, that is a phishing scam. Scammers in the cryptocurrency industry target private keys that grant access to a user's wallet. A private key is a combination of numbers and letters that serves as a crypto wallet's master password and gives complete access to the funds. Scammers frequently send emails or links to phoney websites intended to deceive visitors into inputting personal data. Most recently, a false link supplied to a staff member allowed hackers to take advantage of the well-known blockchain game Axie Infinity.

Best Practices for Protecting Your Crypto Assets

Even though there are a lot of frauds in the cryptocurrency world, you can take some precautions to further protect yourself. Generally speaking, anything that seems suspicious is typically not worth the risk.

First and foremost, under no circumstances SHARE YOUR SEED PHRASE. Since they have complete access to your wallet and funds once they have your seed word, scammers usually focus on this area. This phrase will be requested on a lot of phishing websites, which is a huge warning sign. This information should never be requested, and anyone who does so is undoubtedly trying to con you.

Note that if you load a different crypto site, you will see many fake websites that look like real websites. Always check if you are using the official website. Find and check the link from the official Twitter page or Coin Gecko.

Social media is one of the main sources of information for scammers in space. Many of these scammers try to contact you via DM, so be careful when someone DMs you and don't click on random links. Twitter is a crypto hub, so it's also a hotbed for scammers. Twitter bots are widespread, act as fake customer support accounts, and comment under related tweets that contain malicious links. Many fake accounts impersonate official accounts, so always make sure your account is legitimate. Key accounts on various social media platforms (such as Instagram's BAYC) may have been hacked and phishing links sent. Again, if you think something is suspicious, avoid it and seek advice from the community.

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