How to spot a crypto scam

As the number of cryptocurrencies competing for the attention of would-be investors has exploded, so has the number of crypto scams.

In a recent report published by the Australian Consumer and Competition Commission (ACCC), almost a quarter of reported investment scams involved a cryptocurrency.

“The perceived anonymity of unregulated cryptocurrencies can impede the ability to recover funds or identify scammers. It is likely that we will see increased use of bitcoin and other cryptocurrencies in the years to come,” the report said.

Speaking to nestegg, Norton LifeLock’s Mark Gorrie said that common crypto scams can range from fake ICOs (initial coin offerings) and phishing attacks to pyramid schemes.

“We have seen a range of crypto scams circulated over the years, as recent as the DubaiCoin scam, which was a phishing attack that circulated just this year. There are simple things that we can all be looking out for when investing into crypto to ensure we aren’t falling victim to these hidden crypto scams,” he said.

The first of these involves a little bit of attention to detail. Like their non-blockchain-based counterparts, Mr Gorrie said that many cryptocurrency scams can be identified by simply taking a closer look at the fine print involved.

“Scammers will often make typos, leave out details and, if you ensure to inspect with a close eye, they can be easy to identify. If it seems sloppy and unlike a legitimate business, it’s best to stay away.”

Mr Gorrie said that white papers are a good litmus test here.

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Source: How to spot a crypto scam | nestegg