3 Tips to Avoid Crypto Scams

While it may seem like the gold rush around crypto and the associated scams that took place as the market was finding its feet are now over, this isn’t entirely true. Sure, big exchanges like FTX have collapsed, and the fate of the Binance leader is interesting to look into, and on the whole, crypto can still be a great investment if you’re willing to treat it like any other market risk. There are ways to manage that risk, keep a solid position, and be wise about your approach.

However, it’s still true, especially in developing markets, for some of these schemes to be questionable. The President of the USA has his own coin now, and so you may even wonder to what extend these tokens remain trustworthy or if they’re branding and speculation by another name. Of course, good practice and wisdom always applies.

In this post, we’ll offer three tips to help you avoid the worst of false promises and any possible pump and dump schemes that you sometimes see make the news.. Without further ado, please consider:

Research the Team & Project Thoroughly

A new crypto project can sometimes seem ingenious and great fun, but be mindful of what’s out there. A legitimate project will have real people attached to it with verifiable backgrounds, not anonymous accounts or profiles that seem to be manufactured. If you can, check their LinkedIn profiles, see if they've worked on other projects before, and look at whether they have any partnerships or backers involved.

The whitepaper matters too, though plenty of scams have had impressive-looking documents that said absolutely nothing of substance. What you're looking for is a clear explanation of what problem they're solving and how the technology works, and also what deliverables you can expect before you buy in.

Watch Out For Unrealistic Promises

Any project guaranteeing returns or claiming you'll make a certain percentage profit is lying to you, full stop. The crypto market is volatile and unpredictable, and no one can promise what a token will do, so if someone's telling you it's a sure thing or that you need to get in now before it's too late, they're using pressure tactics to stop you from thinking clearly.

Pump and dump schemes rely on creating urgency and FOMO, so they'll use language about "once in a lifetime opportunities" or "limited spots available." Remember that the reliable projects don't need to rush you into decisions because they're building something that will still be around in six months at the very least.

Stick With Proven Infrastructure

There's nothing wrong with exploring newer projects, but doing it through reliable platforms and services is likely much more reliable. If you use exchanges with proper regulation and insurance on deposits, you’ll get some protection if it goes pear-shaped, and they're far less likely to list outright scams because their reputation depends on it. Services involved in crypto market making for example, help provide liquidity and stability to trading pairs, which means you're less likely to see wild price swings caused by low volume or manipulation, and that’s a much better sign.

With this advice, we hope you can avoid crypto scams that you don’t deserve to suffer.