How to avoid crypto fraud
There are many good reasons to invest in cryptocurrency. One of the things that is often pointed out in connection with this is that only two parties are involved in this type of transaction, and that transactions with cryptocurrency cannot be traced back to the user.
But even if you can list many good reasons to invest in cryptocurrency, but there are also some disadvantages, including that you can be exposed to cryptocurrency fraud, and therefore it is important to be skeptical. You should always do thorough research before embarking on it.
The occurrence of crypto fraud is researched on this every single year. And these studies show that crypto fraud is something you should definitely keep in mind at all times. Defi crime is very much alive, and increasing from year to year! We are not going far back in time before this was a boring reality for a Norwegian man, who was swindled for almost 200,000 kroner .
However, there are some steps you can take in an attempt to avoid crypto fraud, or defi-crime if you will, and we will take a closer look at this in this article.
Very nice video that shows you what you should be aware of regarding Defi scams:
What is crypto fraud?
Cryptocurrency is a digital currency , which means that it does not exist in physical coins and banknotes in the same way as the traditional currencies we know, but that does not mean that it is not a target for crime. On the contrary!
As interest in cryptocurrencies increases, so do the numbers of cryptocurrencies. Yes, as a result of the crime that takes place in connection with cryptocurrency, a completely different concept has emerged – cryptocurrency fraud!
As mentioned in the introduction, crypto fraud and its occurrence are something that is researched every single year. And there is at least one thing that is certain – we do not like what we see. The surveys show that the numbers of crypto fraud are increasing year by year, and that there is talk of a fairly significant increase. However, we will return to this a little later.
Crypto-fraud is a form of crime that takes place in different ways. This means that it can be very difficult to understand that you are exposed to fraud before you stand with both legs planted in it.
This is how crypto fraud takes place
As mentioned, crypto fraud can take place in different ways, which makes this a very complicated situation. However, there is one form of crypto fraud we know is recurring, and therefore it may be practical to keep your eyes open for just this one.
You have been toying with the idea of investing in cryptocurrency (possibly investing more in cryptocurrency) for a long time, and suddenly an ad appears on your Facebook account. It looks legitimate, and it convinces you to put your mind to life.
After you have clicked on the ad, you get access to a website where you can follow the development of what you have invested, and that you are contacted by an advisor. That is, someone who pretends to be an advisor. And that person will probably also encourage you to invest more – on a regular basis.
However, it is only when you want to withdraw part of your investment that you may get the impression that you have been scammed. Because then it is suddenly not possible to get in touch with your “adviser” anymore, or they claim that it is problematic to transfer something to you.
Crypto fraud in recent years
Crypto-fraud is something that has been researched for several years. Cryptocurrency took the world by storm in 2017 through the official launch of the cryptocurrency Bitcoin. Not long after that, the term crypto fraud appeared, and it was something that people started researching.
The company Elliptic has been very central in this work. This is a company that specializes in preventing crime related to cryptocurrency, so this is something they work on every single day. They have conducted surveys in 2019, 2020 and 2021.
What emerges from Elliptic’s surveys is that there is a significant increase from year to year. In 2019, NOK 40 billion was lost to crypto fraud. It is a completely insane sum, but the sum was more than doubled in 2020. During that year, NOK 95 billion ended up in the wrong hands.
For a few months, the investigation for crypto fraud in 2021 was ready. It shows that this year too there was an increase, although not as large as the increase we saw from 2019 to 2020. In 2021, crypto fraudsters managed to get a staggering 110 billion kroner!
How to avoid crypto fraud
But it is with crypto fraud as it is with other forms of crime so there are several things you can do to avoid this. Or at least try to avoid it.
In connection with crypto fraud, it is often random who is exposed, and we can therefore not guarantee that you will be able to avoid it. But there is nothing stopping you from at least trying!
We have some tips that can be good to keep in mind if you want to avoid being exposed to crypto fraud, and we will take a closer look at them below.
Check out the crypto dealer
The first thing you should do is check out your crypto reseller. This is something you should do before leaving any of your information with the relevant crypto dealer.
For some, however, this may be easier said than done, especially if you are relatively new to the game. Then it is not certain that you know exactly what to look for. But then it is fortunately possible to find many good resources online – and our website is one of them!
In connection with you checking out the crypto dealer, these are some of the questions that should be answered in a good way:
- Is this a regulated dealer?
- Who is the crypto dealer licensed by?
- Do they have available customer service?
This is a safe, secure and well-known crypto exchange:[main]
Double check that you are on the right website
This may go without saying, but it can also be a good idea to double check that you are on the right website. Forging URLs is one of the most popular forms of crypto fraud. There are several terms for this – phishing and scam.
Here it is important to look carefully, because a fake phishing site will look almost identical to the real site. But on the phishing site, you give your user information to someone who wants to scam you.
Use two-factor authentication
Making sure the crypto reseller uses two-factor authentication is also a good idea. This means that you will be asked to use two different factors in the login process.
Two-factor authentication is also called 2FA.
The authentication forms BankID and Google authentication are the two most used forms in Great Britain .
Make use of cold wallets
After you have acquired cryptocurrency, you need a place to store your inventory. For this, cold wallets, or cold wallets as it is often called, will be a good choice.
Cold wallets are not connected to the internet, which means that you store your inventory remotely. This storage method makes it very difficult to hack your wallet, and therefore this type of wallet is often referred to as the most secure way to store cryptocurrency.
Do not give away your password or other sensitive information
This is a tip that always applies, and not just in connection with investing in cryptocurrency. But you should never give away your password or other sensitive information to anyone. Not any of your friends or close family once. Never!
This should be one of your main rules at all times. And remember: If someone is trying to force you to do so, it is often a sign that they do not have good intentions with you in the first place.
It is also the case that very many people use the same password everywhere, because it often makes it easier to remember, and although it may seem like a good idea, it is not. If you have user accounts with 5 different crypto dealers, you should also have 5 different passwords.
Only invest what you can afford to lose
Another good tip when investing in cryptocurrency is that you only invest a sum that you can afford to lose. In other words, you should not invest your entire fortune in cryptocurrency. A double-digit number is more than good enough!
Keep your tongue straight in your mouth
It is a good idea to keep your tongue straight in your mouth, but it does not matter what you do. If there is something that seems suspicious, then it often is, and then you may want to remove yourself from the situation so that you are less exposed.
Not sure if you are being scammed? Get Google Help!
But it is not always easy to see that you are actually being scammed. If you think you are in such a situation at the same time as you are not completely sure, then we recommend that you google “crypto dealer’s name + scam / scam”. It will often give you some great answers!