The cryptocurrency industry has exploded in the last couple of years, and almost everyone on the planet understands how digital assets operate, and how to invest their hard-earned money into different types of tokens. But do they actually know how to safely invest?
This blog post will explore tips to help you avoid crypto scams in 2022, what to red-flags to look out for, and how to invest your money in the safest possible manner.
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Leave Telegram and WhatsApp Crypto Groups You Aren’t Familiar With
If you suddenly discover that you’ve been added to a cryptocurrency group chat on WhatsApp or the Telegram app, and you don’t recognize anyone in the group chat. Do not invest your money into any cryptocurrency offered in the chat. Immediately leave, and report the group chat if possible.
They are almost certainly a crypto scam. Typically, they rely on elderly people or uneducated/misinformed individuals who are very new to the cryptocurrency industry. The admins of the group chats often send enormous messages that trick people into investing.
Typically, the scammer admins use just some of the following calls to action tied together with a manipulative sense of urgency:
- Urging newly invited members about a new coin/token that’s been released and that it’s being funded by big named brands.
- Attempts to scare members in the group chat that you’re making a bad decision by not investing your money.
- Making false statements that celebrities have endorsed their token.
Unfortunately, nearly all crypto scammer’s identities remain completely anonymous, without any breadcrumbs to follow. Usually, once their scam is completed. They delete their accounts and become inaccessible and unreachable. So even if you try to contact authorities and attempt to have criminal charges filed against the scammer. It’s 99% of the time impossible to identify who scammed you.
Newly Created Tokens
If a friend of yours recommends that you invest your money into a token that’s about to be publicly released. Or has just been created less than a day ago. There’s a good chance that the token is a scam. Let’s explore some of the ways developers of these freshly made cryptocurrencies scam people:
- Pump & dumps: Developers release tokens to the public but keep several to themselves. Once the cryptocurrencies value initially increases, the developers sell all of their tokens. Which significantly lowers the value of the rest of the cryptocurrency.
- Honeypots: These are tokens that you invest money into, but have their digital contracts coded to prevent anyone but developers from selling their tokens.
- Minting scams: This type of scam digitally prints massive quantities of tokens into a developer’s wallet which heavily lowers the value of other people’s cryptocurrency.
Most of these coins are released on a platform called PancakeSwap. So please be cautious about these new currencies. This brings us to the next tip on our list.
Check If The Cryptocurrency Is Available On Authoritative Exchanges
If a cryptocurrency is available on authoritative exchanges. This is a great signal that a currency is not a scam. Major platforms like Coinbase & Wealthsimple have teams that vet tokens before they release them onto their cryptocurrency exchanges.
When a currency is only available on exchanges like Uniswap or Pancakeswap. That doesn’t necessarily mean it’s a crypto scam. However, you should be cautious and look for red flags like if the coin is new, or if it was discovered through a random Telegram or WhatsApp group chat.
Now that you’ve been informed about some tips to avoid crypto scams. The likelihood of you losing your hard-earned money will be mitigated. You can now do your own research to detect potential scams. So instead of losing out on gains, look forward to seeing some returns on your investments!
Look forward to packing your carry-on bags, and going on your dream vacation. Whether that be enjoying time on a beach, fine dining, or even simple berry picking. Because you’ll be seeing more gains than losses due to knowing how to navigate away from crypto scams.