There are risks involved with performing transactions with crypto. These risks are beyond the volatility of the market: they are online scams. So, you need to be aware of the possible scams in crypto before investing in it.

5 Common Crypto Scams and How to Avoid Them

Experts recommend that you only consider digital cryptocurrency startups and companies that track detailed transaction data. Additionally, you should check that they have a problem-solving business plan. Moreover, there should be real people behind the company. These and some other characteristics are important for your security. Here is a look at some crypto scams and how to avoid them:

1. Email / Text message

Email or text message scam is arguably one of the most common crypto scams. Imposters of crypto exchanges send an email or text to ignorant users. Many of these emails or texts claim that your account is under attack and an exchange employee (fake) is available to help you or that you should click on a link to change your details. 

When clicked, you will be redirected to a phishing link (a clone of the exchange) where you will enter your details. This way, the scammer will use the details you entered on the fake exchange website to withdraw your funds from the original exchange website. 

To protect yourself, never respond to text, email, or WhatsApp messages from anybody claiming to be the staff of a crypto exchange platform. Additionally, never click on any link sent to your email, and report such messages immediately. Most crypto exchanges will never request your details through text message, email, or WhatsApp.

2. Imposter websites

Imposter website is another common crypto scam. Many fake sites have been set up to look like the original. You must think twice before clicking a URL that has no "HTTPS" in the website address. Also, make sure you pay attention to the platform that you are directed to after clicking a URL.

When you want to visit a crypto website, make sure you type in the correct URL, preferably using an up-to-date browser. Additionally, quickly stop any action that redirects you to another platform requesting payments of any sort.

3. Verification code

This type of scam is common in the financial sector, and the crypto sector is not exempted. Traditionally, scammers with your login details will find it difficult to withdraw funds from your account if you have one-time verification or two-factor authentication set up. 

These scammers may impersonate a member of the crypto exchange, requesting for the code sent directly to your phone. To avoid this scam, never send the verification code sent to your phone to anyone, including a person who claims to be a member of an exchange. 

No crypto exchange will ask you to send your verification code to them. If you receive such a request, know that it's from a scammer. 

You can learn how to identify a good trading platform here.

4. Account blocking

This is another scam commonly used by imposters. They claim that if you do not follow a specific instruction, your account will be blocked. In other cases, they claim that your account has been blocked and you need to contact a staff (fake) to resolve the issue. You will lose your funds if you follow any of these instructions.

When you receive a message asking you to do any of the above, ignore and block such a message. Never input a code or click the link to unblock your account. Also, report such messages immediately. 

5. The QR code

Another version of the account blocking scam is the QR code scam. The imposter will send you a prompting WhatsApp message asking you to verify your account. If you follow the instructions in the message, the scammer will have access to your funds and empty your account. 

Do not interact with any alleged staff of a crypto exchange via WhatsApp or other social media channels. Most genuine crypto exchange admins will never send you a direct message first. This is something you must take note of. 

6. YouTube comment / Impersonation 

Another latest scam in crypto is the YouTube comment scam. Here, scammers claim to make thousands of dollars weekly and ask you to contact them to teach you how to or invest for you. You can lose thousands of dollars if you fall for this. 

Also, a scammer can claim to be Elon Musk or another influential person and use a fake account that resembles that of the influencer’s main account to deceive people into sending coins in other to participate in a giveaway. 

You need to be careful and verify that a giveaway is actually real before participating in it. In most cases, you don’t need to send any coin or pay any fee to receive a giveaway that is legit. Once you are told to pay a fee or send funds into a wallet before you can receive the giveaway or airdrop, know that it is fake. 

Conclusion

The scams mentioned in this guide are just a few of the many strategies being used by scammers. Make sure you protect yourself and your account by not giving in to any of them. Not so much can be done once a crypto scammer has gained access to your account. Therefore, you must be careful not to fall victim to these scammers.