How to Tell If a Crypto Is a Scam or Legit? – TechAcute


Ready to make an investment but not sure if the coin you’re looking at is legit? Here are our tips on how to check for signs that a particular crypto could be a scam. Cryptocurrency is becoming more and more popular nowadays. However, volatile markets and related lack of regulation in most countries make it a risky investment, albeit one that can pay if done right.

The unregulated nature of cryptocurrencies is one of the main reasons many criminals run cryptocurrency scams. As research shows, people fall for these types of scams all over the world, and in 2021, they lost more than $14 billion to cryptocurrency scammers. Since this market is not regulated, it is almost impossible to get their money back. Even with the involvement of law enforcement, it is weird that can help to return all that you have lost.

What can you do to check and verify a particular cryptocurrency?

Therefore, the only way to avoid losing your money is to be cautious when making investment decisions and learn to recognize a cryptocurrency scam. When making such a decision, you need to make sure that the coin being offered is legitimate and that the company offering it is a real provider and not a scammer.

How to know if a cryptocurrency is a scam or legit - Tips for verifying cryptocurrencies and currencies - Man on the phone with a lawyer
Image: Bullrun / Adobe Stock

Crypto scam? Currency Verification!

Given the lack of regulation, it is difficult to verify if a cryptocurrency unit is legitimate. So if you are offered to invest in a specific coin, take your time to research it. Ask yourself these questions:

  • Who is the team behind this? Are they well-known opinion leaders Vitalik Buterin (more on influencers later)? Do they have an active presence on social networks (LinkedIn, Twitter)?
  • Is there a white book? Any legit cryptocurrency project that is not a scam should have a White paper behind that. It specifies the purpose and technology behind the coin, as well as its historical performance. You can check this white paper database to see if the coin you are offered has one. If not, that’s a red flag. If there is a white paper, be sure to read it, highlight anything that is unclear to you, and investigate further.
  • What is the reaction of the people behind the coin when I ask them more questions? Are they being cautious and evasive when I try to get more details? If so, ask them directly if it is a scam and watch their reaction: will be saying.

Hosting provider and website verification

Sometimes the scammers wear fake company websites with domains that closely resemble the real thing, such as base of coins. Such sites would ask for your crypto wallet password and financial information or get closed unexpectedly when you try to withdraw money.

So before you decide to use a website of a specific company, make sure you:

  • Look up the name exactly as it is typed in your browser; it is best to copy the name from the URL and run it through Google (for example, if the website is http://www.coinbase.comsearch for Coinbase and if it gives you Coinbase as a result, press “search instead of coinbase”.
Google search screenshot
Screenshot: Kate Sukhanova/TechAcute
  • Run the domain name via Who – if you know for sure that a legitimate cryptocurrency provider is registered in country A, chances are that if a similar-looking domain is registered elsewhere, it is fake.
  • Do not click on suspicious links on the website and check for grammatical and spelling errors.
  • Run the images on the website through reverse image search: If they appear as stock photos instead of legitimate company management images and screenshots, something is wrong.
  • Check the terms and conditions – any website that doesn’t have any is suspect. Cryptocurrencies may not be regulated, but you are still signing a contract with a platform, and that contract requires terms and conditions.
  • If a company name/number is mentioned in the terms and conditions of the website, please check the company in the local registry of the country of origin (you can use she is ready of registrations abroad). These records would generally confirm whether the company actually exists, key managers and shareholders, business activities, and other information. Google shareholder/CEO names: If they’ve previously been involved in scams or something else, it’s likely to show up in your search results.
  • If there is a “guaranteed return promise” or “no risk”, the site is probably a scam: no investment can guarantee a return and every investment, no matter how safe, carries a dose of risk.

Even when a website turns out to be a true cryptocurrency trading platform, make sure any decision you make is well thought out. Don’t invest until you understand exactly what’s going on – look up any terms you don’t understand, and ideally get professional advice. Also, make sure to read the agreement/Ts&Cs with the platform. If you don’t accept responsibility in cases of theft of your money, think twice.

Here are some telltale signs and examples of scams.

Fake celebrity endorsements for a crypto scam

There are influencers like Elon Musk that promote cryptocurrency. And if you have gotten into crypto thanks to its Dogecoin approval and it was worth it for you, that’s excellent.

However, the success of influencers, including celebrities with huge social media presences, means that scammers can too. capitalize on it.

For example, if you’re an Elon Musk fan tweeting about him and suddenly get a direct message from someone claiming to be him, be skeptical and don’t participate. Here’s how you can tell it’s a scam:

  • The username is misspelled (eg @ElonMask or @EllonMusk).
  • The request contains some sort of payment order request, for example, your favorite charity, with a link, or a bank transfer request.
  • There is no blue checkmark signifying a verified account.
  • When you search for the username on Google, nothing comes up or you see news about scams.

However, that’s not to say there isn’t room to be inspired by celebrity enthusiasm for cryptocurrency investing. However, it is important to be cautious and remember that celebrities are people too and may not be investment experts. Basically, treat any crypto-related advice from celebrities and influencers the same way you treat endorsement of any other product by them: trust, but verify.

Marketing emails and social media ads for cryptocurrencies

Clickbait emails and ads with titles like “BITCOIN GIVEAWAY!” or “X celebrity selling crypto assets NOW!” they are designed to make people feel anxious and excited. However, they often sound too good to be true, and that is the principle you should follow. If an ad, email, or Telegram message sounds too good to be true, it probably is. Here’s what you can do to protect yourself in these cases:

  • If a message with a “too good to be true” cryptocurrency investment offer claims to be from someone you know, try talking to your acquaintance in person to check what they’re doing; it is likely that you are an impostor or your friend has been hacked. .
  • If you clicked on a link or ad, please do not leave any personal data if requested and exit the site as soon as possible. But do your best not to click to prevent such ads from appearing in the future.

Dating sites and social media platforms.

Investing and dating just don’t mix. Despite some people acting contrarythere are reasons why LinkedIn is not used to connect, and CV don’t discuss pre-seed investments on Tinder.

So if someone on a dating site offers to talk about “a great investment opportunity” or a way to get rich quick or asks you to download an app that looks suspicious, a phenomenon known as cryptorom – It is likely that they are cheating on you. Block this person immediately.

This type of cat fishing not restricted to dating sitesOf course, if you’ve met someone on social media, they’re probably looking for you for the same purpose. These people are very good at social engineering, regardless of what platform they use, and sometimes the scheme seems very legit, including real “customer support” people. In the first months of 2021, the The FBI sent over 1,500 reports of CryptoRom scams – so be careful in your online relationships.

A crypto scam can also be done differently to appear legit on social media. You need to watch out for shills, who are paid social media users who are simply trying to promote a particular coin with fake earnings updates, even if they never invested themselves. Beyond that, watch out for things like “airdrops.” Nothing is free in life, and you should be careful with such offers. Why would anyone give away money, even if it’s in a fashionable currency?

Generally, the best ways say that an investment offer in cryptocurrencies is a scam are:

  • Someone is really pushing and rushing you to invest today.
  • Your messages or websites are riddled with misspellings.
  • They are requesting your personal information.
  • They promise high returns guaranteed and without risks.
  • They are claiming to be a “secret accounts” celebrity and asking for money.
  • They claim to be someone you know and are asking for money. In these cases, it is always best to check in person.

If you are interested in getting even more information on how to check if any particular new cryptocurrency or currency is legit or could be a crypto scam, you can also watch the video featured below by Game Thinking TV with Amy Jo Kim, Amy Wu, Holly Liu , Beryl Li and Libby Schultz. Stay safe and always make good investment decisions!

YouTube: How to know if a crypto project is legit or a crypto scam?

Photo credit: The feature image has been taken by Shotprime Studio. The photo showing the man on a sofa was prepared by Bullrun. Screenshot of Google search results taken by the author for TechAcute.
Source: Chainanalysis / John Biggs (coindesk) / kevin peachey (BBC) / Wikipedia / NDTV Business Desk / Sophie Alexander, Misyrlena Egkolfopoulou (Bloomberg) / Alexander Martin (sky news) / base of coins / Katie Fiore (FastCompany) / Jagadeesh Chandraiah (sophoslabs) / Jeremy B. Merrill, Steven Zeitchick (washington post) / Jasmine Goodwin (CNN Business) / AARP

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