It is very important to know how to avoid crypto scams, as fraudsters are smarter now. Investors have to guard against the wolves.

As cryptocurrency grows in its adoption globally, scammers have found many schemes and have lost about billions of dollars annually. To reduce risk, take steps to recognize common scams that may happen to you. How to avoid crypto scams is as follows.

Key-Takeaways:

• The scammers evolve their tactics constantly, and the investors have to keep themselves updated about the scam then and now, like fake ICO, Phishing attack, Ponzi schemes.  
• In order to prevent the loss of digital assets, wallets can be used to store private keys with hardware wallets and enable multi-factor authentication while never sharing private keys or seed phrases.  
• Investors can also follow reputable news sources, security blogs, and crypto forums to be forewarned of new threats that would otherwise make them vulnerable to scams.

Common Cryptocurrency Scams to Recognize

One first step to learning how to avoid crypto scams is knowing what the biggest threats are in the ecosystem. The scammers are constantly tweaking their ways to take advantage of technological flaws and the ways of the human mind.

Fake ICOs and NFT Projects

Some scam ICOs or NFT projects are launched with promises of huge returns. There are many of them, many of which look professional but actually have no real team or plans.

Once the money is sent to fraudulent wallets, there is no point of redemption, and it turns into no man’s land. It is important to avoid these schemes, and this is awareness.

Phishing Attacks

FBI data indicates that 350,000 people have been taken for nearly $45 million by crypto phishing scams. They target you through email or a text with a link that may or may not be malicious.  

Within minutes, scammers can drain victims wallets by stealing private keys or seed phrases. Such losses should be avoided by staying vigilant.

Rug Pulls

In exit scams, developers come up with a project that looks like a legitimate one, market or use endorsements to attract investors, and disappear with the money.  

A rug pull is this type of fraud that sees investors with worthless assets and without recourse for recovery.

Ponzi and Pyramid Schemes

The copy of these classic financial scams has become visible in crypto space, promising good returns to investors.  

The payments of earlier investors are made from new deposits, but when capital stops coming in, the scheme simply dies and many people lose out.

Essential Protection Strategies

If you wish to know how to avoid crypto scams, you have to keep yourself secure from multiple aspects of your crypto asset journey. The strategies of these are multiple layers of security, thus reducing your vulnerability to a great extent.

Conduct Thorough Due Diligence

Investing can be done only after research of the project’s team, technology, and community feedback. Blockchain explorers may be used to verify smart contract addresses, and multiple trusted sources may give you advice.

Secure Your Digital Assets

Long-term storage should be done using hardware wallets, and security of exchange accounts should be enabled with multi-factor authentication. Do not share private keys or seed phrases, even in case of investment promises or support claims.

Recognize Social Engineering Tactics

Be keen to unsolicited investment advice, sudden unexpected romantic crypto talks, or offers of limited-time products. Emotional scammers are able to override logical decision-making.

Stay Informed About Emerging Threats

Scammers are always innovating on how to scam with crypto. Information on reputable news, security blogs, and forums provides a means to know what threats are and protect the assets.

Conclusion

Currently, the crypto industry is evolving, so there is always a demand for how to avoid crypto scams.  Investors can protect their assets by being cautious, adopting reasonable security measures, and inquiring about the unrealistic promises.