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How best to avoid cryptocurrency Scams

This guide attempt to uncover some of the scams you should be wary of in the crypto market and how to avoid them.

Fake ICOs

Initial Coin Offering offers start-ups the opportunity to raise a significant amount of money in a relatively short period. Due to this scammers claimed to be developers have found initial coin offering (ICO) as one of the areas they can easily exploit funds. The ICO market is currently seeing an influx of new projects claiming to solve one problem or the other. According to a research study, 80% of the ICOs conducted in 2017 were scams.

Many of these fake ICOs often have false information, such as fake team members, advisor, bad website, vague roadmaps and some use multi-level marketing ‘referral’ to attract investors. To protect yourself from this kind of scam it is important that you do a due diligence on any project you intend to invest. Ensure you check every detail. One common practice of fake ICOs is their whitepaper are often plagiarised.The ICO listed on cryptonews9ja have not been verified. Ensure you verify and carryout your own research before investing.

Fake Cryptocurrency Exchanges

We can only recommend you to trade your cryptocurrencies on exhanges and groups that has been verified on cryptonews9ja. Crypto exchanges provide individuals a platform to buy or sell or exchange their crypto coins for other cryptocurrencies or fiat currency. Just like ICOs, the numbers of crypto exchanges in the market is on the increase. Traditional exchanges like stocks, forex are guided by a regulatory framework which includes AML/KYC. However, most exchanges in the crypto sphere are not monitored by a regulatory body in their respective countries.

In June 2018 Ukraine cyber police uncover a a record  breaking Crypto scam. It is therefore important to be cautious of the crypto exchanges that promise unrealistic discounts. Pay attention to details such as the website ‘About us’ page, URL, ensure it includes ‘https’ this tells you if the traffic between your device and the website is encrypted.

In addition, ensure the exchange is listed on Cryptonews9ja. Be wary of exchanges that are subjected to pump and dump, and fake volumes. According to a report published by Blockchain Transparency Institute (BTI) in August 2018 half of the daily volume on CoinMarketCap is fake.  CER platform is a good resource website that ranks crypto exchanges based on these factors.

Fake Crypto Wallets

Similar to fake crypto exchange, always watch out for fake bitcoin and altcoin wallets. There are many fake crypto wallets app created by scammers on Google play store, before installing any wallet ensure to do some research about it. Or it is best to use the wallet recommended by reputable exchanges like Binance. In future we will add a list of verified crypto wallets for our readers guide.

Fake Buyers/Sellers on P2P Exchanges

While Peer to peer exchanges is one of the easier ways to buy and sell cryptocurrencies online, however, most of these exchanges are dominated by fake buyers and sellers.  To prevent dealing with scammers on these platforms ensure to use P2P platforms with inbuilt escrow, avoid buying or selling to unverified account. Most P2P exchanges do have customers review section for each seller, that’s a good place to check if the seller is real.

Other crypto-related scams in the market include; cloud mining scam, phishing attacks, malware scam, Ponzi scheme etcetra.

If you have been scammed in the past, we encourage you to report that scammer and we will update our scammers watchlist.

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