5 Tips to Stay Safe From Bitcoin Scams and Frauds in 2024

Image From Kanchanara on Unsplash
Image From Kanchanara on Unsplash

An increasing number of crypto investors are falling prey to scammers who use cryptocurrencies like Bitcoin (BTC) as a payment of choice. A recent report by the Federal Trade Commission shows that over 46,000 investors have been victims of cryptocurrency scams since 2021. The scams have resulted in financial losses amounting to more than $1 billion. Even though the crypto industry remains largely unregulated, you can follow these smart tips to safeguard your virtual coins from scammers and fraudsters.

Educate Yourself

Education is the first step in developing a solid defense mechanism against bitcoin scams. Read reliable financial news sources to stay current with the latest scam tactics as well as follow credible crypto advisors and attend webinars. Learn about the founders of different coins, the technology behind them, and what distinguishes each coin from other offerings. Learn about the most common scam types that exist, like phishing, investment, fake giveaways, and man-in-the-middle attack scams.

Work With Trusted Wallets and Platforms

Avoid using cryptocurrency platforms that are not registered with the regulatory body or any financial authority, as they can lead to significant losses. The Commodity Futures Trading Commission (CFTC) has already taken action against some operators who claim to be registered falsely or engage in illegal digital asset derivatives trading. Before you decide to buy BTC, thoroughly research crypto exchanges and wallets, read reviews, and ask for recommendations from reliable people you know. Ensure the platform has secure wallets and strict measures for protecting your money from unauthorized transactions.

Enhance the Security of Your Private Information

Safeguarding your private information is crucial to preventing Bitcoin scams. Use multi-factor authentication to prevent hackers from accessing your crypto trading account or wallet even when they have your login credentials. You can also store sensitive information in secure software options or hardware wallets. Double-check the recipient’s address prior to sending cryptocurrency to shield yourself against phishing scams created to intercept digital money. Most importantly, avoid sharing your personal security details, keys, or two-factor authentication codes.

Be Cautious of Pump-and-Dump Schemes

With pump-and-dump schemes, the prices of specific cryptocurrencies undergo artificial inflation through extensive promotion and marketing, causing scammers to sell inflated assets at high profits. Take caution if you notice a sudden, unrealistic spike in the trading volume and price of a specific coin. Take note of any social media hype involving a coin without any notable development or news. Instead, thoroughly research to understand the coin’s fundamentals rather than depending on sudden price movements. Never pay attention to tips on social media or other online forums trying to entice you by offering inside information on a coin.

Verify Every Information and Communication Received

Considering how prevalent and convincing phishing scams have become, never drop your guard when it comes to unsolicited communications. Take time to verify the authenticity of the sender’s credentials. Avoid downloading attachments or clicking on links from unexpected text messages and emails. Besides, avoid entering your information into insecure websites. You can verify if certain communication is genuine by getting in touch with the crypto platform via its official channels.

If you are well-informed about Bitcoin scams and fraud, you are less likely to fall victim and lose your digital coins. The good news is that you can always find reputable cryptocurrency exchanges and wallet platforms to trade or invest in Bitcoin. 

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