Fraud continues to be on the rise in Canada. Last year, the Canadian Anti-Fraud Centre received reports of cryptocurrency fraud losses totalling $75 million. With fraud on the rise, and the current market crash continuing to impact the crypto industry, we’re continuing to see a shift as many Canadians have become hesitant to invest in the market.
Unfortunately, with the crypto crash, some investors made vast decisions out of emotion and fear, falling into the trap of fraudulent crypto activity at a very vulnerable time. For investors in the crypto market, it’s imperative to understand how to identify and prevent different crypto scams to ensure you’re investing with a, legitimate cryptocurrencies trading platform and vetted cryptocurrencies. Here are some tips in how to avoid cryptocurrency scams:
Preventing Crypto Fraud: Identify
In the cryptocurrency sector, two of the most common scams are phishing and phony investment opportunities designed to trick people into sending the scammers money, cryptocurrency, or personal information.
The Different Types of Cryptocurrency Scams
There are several variations of fraudulent cryptocurrency scams to be mindful of. In all cases, the scammer’s goal is to gain access and steal the victim’s crypto assets. Below are two different types of scams to be aware of:
● Bitcoin Phishing Scams – designed to scam internet users of their money, cryptocurrencies, or personal information.
○ Example: Scammer impersonates someone you know or someone in a position of authority, like your bank.
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● Fraudulent Investment opportunities – adapting in its forms and methods as scammers try to stay ahead of regulatory authorities.
○ Example: Cryptocurrency pyramid schemes offer low-cost, high-reward cryptocurrency investments. In many cases, investors will receive some money back as the scammers shuffle money from investor to investor
Preventing Crypto Scams and What to Look For
Always keep an eye out for emails asking for your passwords, money or transferring of funds, or other personal information. Not only is this a red flag, but you should never share any of this via email. If you’re unsure what to look for, keep an eye out for misspelled words, inauthentic branding like logos being off-colour, or other clumsy mistakes. An important technique to use to decipher suspicious emails is to hover your mouse over links to ensure they send you to your intended destination, not somewhere that looks phishy.
Once again, look out for anything that looks suspicious about the website, the app, the company or the offering. Do your due diligence on a company by reading their whitepaper, if available, and investigate them thoroughly on the internet. Familiarize yourself with the investment opportunity, look at reviews, and check if the company is legitimate by seeing if they are registered with the appropriate regulatory agencies.
For more detailed information on steps, you can take to prevent fraud, check out Bad Crypto Podcast: Avoiding Crypto Scams.
By Bilal Hammoud
Author Bio: Bilal Hammoud
Bilal Hammoud is a Canadian tech entrepreneur and crypto industry leader. As CEO & Founder of NDAX, one of Canada’s largest cryptocurrency trading platforms, Bilal spearheads pioneering the crypto industry daily with over a decade of expertise in finance, engineering, digital assets and blockchain. With a global ambition and mindset driven to innovate the digital asset sector, Bilal’s mission is to offer a premium experience for all investors and assure a seamless and secure crypto experience for everyone.
