By Brittany Keels, COO | Sarson Funds, Inc
Cryptocurrencies offer avenues for financial growth and innovation, but they also come with risks, including scams and fraudulent activities. To protect yourself and your investments, it’s essential to exercise caution, conduct thorough research, and seek professional guidance.
Below are some tips to help you avoid falling victim to a crypto scam:
The first step in protecting yourself from crypto scams is to educate yourself about the common types of scams in crypto and how they work. Read reputable sources, learn about different types of scams, understand the red flags to watch out for, and familiarize yourself with how legitimate projects operate.
2. Ensure Regulatory Compliance
Before you consider investing or trading in any cryptocurrency, it’s crucial to confirm that the service or exchange you plan to use complies with both local and international regulations. Regulatory compliance not only provides an additional layer of credibility but also enhances security, reducing the likelihood of encountering fraudulent schemes. Always prioritize platforms that adhere to legal standards and requirements.
3. Secure Your Accounts and Wallets
Use strong and unique passwords for all your crypto-related accounts, including exchanges, wallets, and email addresses. Enable 2FA (two-factor authentication) when available to add an extra layer of security. Choose reputable and secure wallets for storing your cryptocurrencies. Hardware wallets, which are offline and immune to online attacks, are often considered the most secure option. Keeping your wallet software and security measures up to date can protect against new types of scams and vulnerabilities.
4. Safeguard Your Private Keys
Never share your private keys, seed phrases, or any other sensitive information with anyone. Scammers may request this information to gain unauthorized access to your wallet. Write down your private keys at least twice and store those papers in different, secure locations. Never store a private key on a phone or computer.
5. Seek Professional Guidance
If you’re uncertain about an investment opportunity, it’s wise to seek advice from financial professionals and experts within the cryptocurrency field. These professionals can provide you with valuable insights, help you evaluate potential risks, and guide you in making well-informed decisions regarding your crypto investments. Their expertise can be an invaluable asset in navigating the complex cryptocurrency landscape.
6. Verify the Project and Team
Research the project thoroughly. Check the project’s website, whitepaper, and social media profiles. Verify the team members’ credentials and professional backgrounds. Legitimate projects often have transparent team information and verifiable achievements. If you’re considering investing in a token or project that relies on smart contracts, check if the code has been audited by reputable firms. An unaudited smart contract increases your risk.
7. Verify Information Sources
To protect yourself from phishing scams and fraudulent websites, adopt a habit of double-checking URLs, especially before entering any sensitive information. Exercise caution when encountering links from unverified sources. Avoid clicking on links without confirming their legitimacy, as scammers often create deceptive websites that closely resemble legitimate ones. Your vigilance can significantly reduce the risk of falling victim to online deception.
8. Use Reputable Crypto Exchanges
When trading or buying/selling cryptocurrencies, use well-established and reputable exchanges. Scammers might create fake exchange websites to steal your funds or personal information. Check reviews and ratings before choosing an exchange.
9. Community Engagement
Active community engagement is often a sign of a legitimate project. Forums like Reddit, Telegram channels, and Discord servers can be good places to gauge community sentiment and ask questions. Scammers often impersonate well-known individuals or projects on social media platforms to trick users into sending funds. Verify the authenticity of accounts before engaging.
10. Exercise Caution with High Returns
Approach any investment opportunity with caution, particularly if it promises guaranteed high returns. Before committing your funds, conduct thorough due diligence and research. Be skeptical of projects or schemes that make unrealistic claims about profits. Remember that legitimate investment opportunities prioritize transparency and responsible growth over extravagant promises. By staying vigilant, you can better protect your financial interests in the crypto space.
11. Trust Yourself
If something doesn’t feel right or you’re being pressured into making a decision, step back and take your time. Legitimate opportunities will still be there after you’ve done your due diligence.
While the crypto space offers exciting opportunities, it’s essential to enter it with caution to avoid falling victim to scams. By staying informed and conducting thorough research, you can significantly reduce the risk of being targeted by fraudulent schemes. Remember, protecting your funds and personal information is your top priority, and taking proactive measures is key to a safe and rewarding crypto experience.
Disclosures: Not investment advice. It should be assumed that Sarson Funds or its affiliated managers hold positions in all projects that are discussed. It is not possible to invest in any project directly through Sarson Funds, Inc. or its affiliated managers. Any investment product offered by managers affiliated with Sarson Funds should be assumed to be only available to Accredited Investors and subject to the individual terms and conditions of that offering including but not limited to those eligibility requirements associated with U.S. Securities Regulation D, section 506c. Talk with your financial advisor before making any investment decisions or have them contact Sarson Funds directly at firstname.lastname@example.org