Buying crypto, but worried about fraud? Know how to identify cryptocurrency scams

  • As people have started investing in in digital currencies, cryptocurrency scams have gained pace. Here is how to identify cryptocurrency scams
By PRIYA KUMARI
| Updated on Dec 06 2021, 07:12 AM IST
How to identify Cryptocurrency scams? You need to stay aware and alert.
How to identify Cryptocurrency scams? You need to stay aware and alert. (Reuters)

Cryptocurrencies like Bitcoin, Ethereum have recently been in news for lots of reasons including the massive rise an fall in its price. Other reasons include cryptocurrency scams and frauds. People who are interested in investing or buying cryptocurrencies baulk at the prospect as they are worried about cryptocurrency scams that keep happening frequently.

There is no denying that investors get frequently caught up in cryptocurrency scams like the one that happened just a fortnight ago called the Squid Game crypto scam. Hackers too wanted to try a scam on cryptocurrency users. A few months back, even the actual website for the Bitcoin cryptocurrency project (Bitcoin.org) was hacked into by some hacker group. Then there are so-called "giveaway scams" in the world of cryptocurrencies that have often led to innocent users being duped of their precious money. 

Even though cryptocurrency is said to be safe, one should always be alert for scammers. If you own cryptocurrency, never fall for any lucrative offer you see in your email or on any website that is too good to be true. One should ideally verify such claims before investing.

In order to make you stay alert and understand the tricks used by scammers, here are some of the tips using which you can spot Cryptocurrency scams:

How to identify cryptocurrency scams

1. Promises of a high or guaranteed return: You are advised to not to get into the advertisements and offers offering you a high or guaranteed returns. You are advised to crosscheck the authenticity of the same before investing in it.

2. Unnamed or non-existent team members: If you are being approached by someone offering you certain crypto deals. You need to check if that organisation or team is known or not. You can easily Google the name and find out if the one approaching you is genuine or not.

3. Promotional offers: Sometimes several marketing tricks and promotional offers are being used to cheat customers. You should always be alert to such tricks.

4. Check the white paper: This is a document which contains info about how a company plans to grow and make money. Every genuine crypto firm should have a white paper.

5. Do research: Before investing in some crypto firm, do your research thoroughly or at least try to Google some facts and read about the same, check reviews online, etc.

What is cryptocurrency

This is a digital currency secured by cryptography and can be used as a form of payment. It can be bought and sold. Bitcoin is one of the most popular forms of cryptocurrencies and can be used as an investment option or as a method of payment. You can know that units of a cryptocurrency are made through a process called crypto mining.

Bitcoin price on Saturday dropped 9.29 percent to $48,752.15 at 22:01 GMT on late Saturday, losing $4,991.54 from its previous close. Bitcoin, the world's biggest and best-known cryptocurrency, is down 29.3 percent from the year's high of $69,000 on November 10. Because of this drop in the share prices of cryptocurrency several investors had to suffer huge losses.

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First Published Date: 06 Dec, 07:12 AM IST
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