7 Ways To Spot Common Crypto Scams If You're Planning To Invest In It

Attention, don't fall for these!

Cover image via Vecteezy & regularguy.eth (Unsplash)

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Nowadays, with more people investing in crypto, there are also more scammers trying to make a quick buck in the digital asset marketplace

In fact, cryptocurrency scams are becoming more sophisticated. Even for seasoned crypto investors, there might be a chance you'll fall for scams if you're not careful.

To safeguard your crypto investments, it's important to be aware of the possible types of scams and tell-tale signs of crypto scammers.

In partnership with cryptocurrency investment app Luno, here are a few ways to spot common crypto scams:

1. Social media "giveaways" that promise to multiply your crypto

Image via PC Mag

One of the most common crypto scams involves giveaways on social media, where scammers claim that they will multiply or match cryptocurrency sent to them. Often, these giveaways seem to be promoted by celebrities or famous people within the crypto community, but don't be fooled!

These giveaway scams also tend to have an urgency to them, tricking you into making a hasty decision, in which you may end up losing all the cryptocurrency you send out.

How to protect yourself: 
While there are legitimate social media giveaways, make sure you always do your research and verify the account. In any case, if you are asked to send cryptocurrency or share your login and wallet details, avoid the giveaway altogether.

2. Fake websites or apps that trick you into 'investing' or sharing your personal information

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When looking for cryptocurrency opportunities to invest in, you may come across websites that offer big investment opportunities. These websites may look very well done and even gain traction in the crypto community, but the modus operandi for scammers is to shut the site down after collecting enough money.

In other cases, scammers may impersonate popular crypto websites or apps, and use it to collect your login or wallet information. By the time you realise it, the scammers will have cleared your wallet of all your cryptocurrency. :'(

How to protect yourself: Make sure you always double-check all crypto-related websites you visit, before entering any sensitive information. Never download crypto mobile apps unless it's from the official app store, and keep an eye out for lookalike apps.

3. Email phishing scams with limited-time crypto offers, fake confirmation requests, and sometimes extortion

Image via PC Risk

There are a few ways that email crypto scams may work. Some of these emails ask you to make urgent payments to gain access to limited-time offers that often sound too good to be true.

Other phishing emails may ask you to 'confirm your transaction' or trick you by saying that a certain amount of cryptocurrency has been sent into your wallet. When you click on the confirmation request, it redirects you to a page that requests for your login or wallet details.

Another common email crypto scam involves scammers extorting you of money by claiming that they have proof of you visiting adult sites or access to your webcam. If you don't send the set amount of cryptocurrency in a given timeframe, they will 'leak' this information.

How to protect yourself: First things first, do not open emails unless you recognise the sender. Also, always check the spelling of URLs in any links before you click on them, and watch out for URL redirects (this is a red flag!). Lastly, do not provide your private keys or codes to anyone else.

4. E-commerce platforms that accept payments for products via cryptocurrency, but do not deliver goods as promised

Image via Vecteezy

Nowadays, certain e-commerce platforms have started accepting cryptocurrency as an official form of payment. However, scammers may also set up fake e-commerce shops to lure you into buying products with cryptocurrency, and then end up not sending you the goods.

How to protect yourself: Also known as marketplace scams, the best way to protect yourself is to only buy from legitimate platforms that accept crypto, especially those that have buyer protection. Be wary if it's a standalone e-commerce site that has not been widely recognised or reviewed.

5. Overly promoted crypto investments, with celebrity or influencer endorsement on social media

Image via Twitter

One thing to look out for is when a cryptocurrency starts receiving a little too much attention. This investment scam is called 'pump and dump', where scammers will buy a cheap coin in bulk, and then advertise (pump) it, before selling (dump) it once the price has risen.

Oftentimes, this type of scam involves celebrity or influencer endorsement on social media, which drives the hype and seeming legitimacy of a coin. Sometimes, these highly influential individuals might be paid to promote the cryptocurrency, or have also been genuinely tricked by scammers.

How to protect yourself: When you see a cryptocurrency receiving all the attention and climbing in value, don't have FOMO. Instead, do your research. If the increase in value is purely based on hype, with no real reason why, beware! These schemes can cause the price of cryptocurrency to inflate and also crash within minutes.

6. DMs from your friends or loved ones pitching you crypto investment opportunities

Image via Coin Crunch

If you get a random DM from an old high school friend or loved one who is trying to pitch you a crypto investment 'opportunity', ignore it or contact the source directly.

There's a high possibility that the person has been convinced by a scammer or their account has been hacked, and a scammer is impersonating the person you know.

How to protect yourself: Do not invest in cryptocurrency opportunities through another person, even if it's someone you know well. The safest way to invest in cryptocurrency is through registered and regulated exchange platforms.

7. Free money or promises of guaranteed returns

All in all, whenever any person or site claims to be giving free money or guaranteed crypto returns, you should always be careful. If it sounds too good to be true, it probably is.

No financial investment can guarantee returns, because investments always go up and down.

How to protect yourself: Keep an eye out for red flags, especially promises of free money. Instead, look up for whitepapers on the cryptocurrency you intend to invest in. These will explain how a crypto is designed and how it will work, giving you a good idea of its future growth potential.

If you're looking for a safe and secure way to invest in crypto, Luno is the leading regulated digital assets exchange in Malaysia.

This means you can easily buy and sell crypto on the Luno app, while enjoying extra peace of mind.

Luno was the first cryptocurrency exchange to be fully approved by the Securities Commission Malaysia back in 2019, and is one of four registered digital assets exchanges in the country.

It offers the widest range of approved cryptocurrencies: Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), Litecoin (LTC), Bitcoin Cash (BCH), Chainlink (LINK), Uniswap (UNI), Cardano (ADA), and Solana (SOL).

In addition, Luno carries out rigorous risk assessment and mitigation processes before listing any new coins to protect customers and provide you a safe crypto investing experience.

Image via Luno

In terms of security, Luno incorporates industry leading protection to keep your crypto investments safe

This includes two-factor authentication support to provide an extra layer of protection, as well as strong password requirement during the sign up phase.

Luno stores the majority of its cryptocurrency in "deep freeze" using a multi-signature wallet where the keys are generated and stored entirely offline and offsite. The leading cryptocurrency app also adheres to the BSI Information Security Standard, which helps them continuously identify risks and manage or eliminate them.

On top of that, Luno provides Malaysians a safe, secure way to learn about crypto and make informed investment decisions

Whether you're planning to diverse your portfolio or just try your hand at it, Luno makes crypto investing accessible with its simple-to-use app. Besides that, Luno provides educational resources to further empower investors to make better investment decisions.

Last but not least, Luno takes a proactive approach to ensuring the safety of customers, so those that are new to crypto can invest with confidence.

Ready to start investing? Sign up for a Luno account on their website today!

Download the official Luno app on Google Play or the App Store today!

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