How to avoid crypto scams

By: Zeneca

One of the dangers with any new technology is that, unfortunately, scammers and nefarious actors will attempt to take advantage of the less savvy. We saw this with the early days of the internet and e-mail, and it’s no different with web3.

Unlike with your credit card or bank, where you can ask them to undo a fraudulent transaction, this is not an option when it comes to crypto. For this reason it’s important to be especially vigilant when it comes to protecting your assets.

Here are some tips to help you stay safe:

1. Be skeptical: If something seems too good to be true, it probably is. Be cautious of offers that promise high returns with little to no risk, or people who pressure you to make quick decisions.
2. Don’t share your private key: Your private key is like the key to your digital wallet. If someone else gets access to it, they can steal your cryptocurrency. Never share your private key with anyone.
3. Verify website URLs: Scammers sometimes create websites that look similar to legitimate ones, but with slightly different web addresses. Double-check the URL to make sure you’re on the right site, and look for the padlock symbol in your browser’s address bar to ensure it’s secure.
4. Be cautious with social media: Scammers may use social media platforms to impersonate famous people or companies, offering giveaways or promoting fake investment opportunities. Always verify the authenticity of an account before trusting its information.
5. Don’t fall for phishing scams: Phishing is when scammers try to trick you into giving them your information by pretending to be someone else. Be careful when clicking on links in emails or text messages, and always double-check the sender’s information.
6. Use a vetted & regulated platform: One of the safest ways to to engage in crypto trading, especially for beginners, is to use a regulated, centralised crypto trading platforms that helps mitigate some of the friction and risks. See the Day 3 e-mail for the list of recommended regulated Canadian trading platforms.
7. Ask for help: If you’re unsure about something or feel overwhelmed, don’t hesitate to ask someone you trust for advice or help.

Additional tips to secure your crypto wallet

• Store your private key and seed phrase in a secure location. For instance, write them on a few pieces of paper that are kept offline with other important documents.
  
  
• Never share your private key or seed phrase with anyone. It doesn’t matter who asks – just don’t share it.
  
  
• Secure your wallet password. If your wallet has a separate password, anyone who has it can also get your private key. So make sure to choose a strong unique password.
  
  
• Move long-term assets out of your daily hot wallet. Put them into a cold wallet or another hot wallet. By spreading your assets around, especially to cold wallets that you don’t use regularly, the likelihood and severity of scams is reduced.
  
  
• Check the website URL, email address, or social handle before taking action. Scammers will often pretend to be a trusted platform to phish for your seed phrase.
  
  
• Don’t interact with unknown assets in your wallet. These are two common attack vectors that scammers use. More details below.

Examples of scams: 

The industry is regularly coming up with new tools and protections for how to ensure user safety in web3. It’s important to remember that we’re still in the early days, and things will continue to improve as time goes on. Remember, there once was a time when email had no spam filter.

Now that we have covered the basics of cryptocurrencies and wallets, we’ll share primers on the three main web3 fields: DeFi, NFTs, and DAOs.

In our next section, we’ll cover: “What is DeFi?”

Learn more:

• How to avoid crypto scams? (Rainbow).