The rise of cryptocurrency has led to some of the most innovative creations that the world has seen. Countries, companies, and individuals are starting to recognize the importance and potential of digital assets. Cryptocurrencies such as Bitcoin, Litecoin, Ethereum, and other types are utilized by various businesses as a form of payment for products and services.
However, this shift in modern technology also triggers the emergence of scams that increase each day since a lot of people are still not familiar with how cryptocurrencies operate. Various virtual assets online and crypto kiosks located across the globe are being utilized by these scammers to carry out their schemes. Some of those are fake ICOs and phishing sites.
Red flags and how to spot them
Assessing red flags will not only help you save a ton of money but also how to spot suspicious activities. Be cautious if you want to invest in a cryptocurrency to avoid certain situations that will risk your money.
Here are some helpful tips on how to spot red flags:
Lack of code repository
The team that advertises that the product has a public repository must prove that it does. Without this, there won’t be proof that there’s a product code. The code of repository is a web hosting facility that can be accessed by the public for software source code, documents, web pages, and others. If you’re making long-term investments, steer clear of these kinds of advertisements that don’t have a public repository.
No activities/Not active
Majority of cryptocurrencies promise to solve solutions that previous ones weren’t able to do. This is something to look forward to because it shows that they’re willing to make their visions a reality. If a coin hasn’t done anything in regards to their public repository for many years, this can create some stir within the community of investors. To know if the coin is real, discover every update or activity they have that exhibit their dedication to make their project successful.
Unrealistic price growth
Returns in cryptocurrency are not guaranteed. So if you encounter a cryptocurrency that says otherwise, it’s definitely a fraud.
Asking about your private keys
One thing you should know about using cryptocurrencies is that private keys can only be accessed by the owner. Always be wary of individuals or groups that ask for your passwords or any personal information online.
Some might say anonymous teams in the industry of cryptocurrency is normal. That’s somehow expected given that the founder of the first cryptocurrency is still unknown. Though this is the case, you should be cautious of such teams that don’t even share what their cryptocurrency is like and their goal for the following years with it.
Unsatisfactory team management
Being inactive on other parts of the project is possible, but the founder of the cryptocurrency should have the time to blog or tweet to update their customers. Engaging with the public is one of the ways to be known in this industry and to gain trust. The people involved with the project should be connected with the crypto community. If a team lacks this, then you should think about it carefully before fully trusting them with your money.
These suspicious emails involve clicking on a link and providing personal information to win a prize. Clearly enough, that kind of email says a lot because no business offers a free prize without doing anything. By clicking that link, the scammers can hack easily into your personal accounts and obtain valuable information that they can use to successfully carry out their scheme.
Always watch out for big offers and free prizes posted online because they are definitely a scam. Though they have interesting and inviting headlines, it’s better not to click those links or you might end up with a zero bankroll.
Phishing sites are fraudulent sites that disguise as a popular cryptocurrency. They will send you an email that contains a link and take you to the fake site. One of the things you should look for to determine if it’s a phishing site is the security sign at the URL box. It is in the form of a padlock and it should appear locked. This ensures that the site is legitimate.
Other red flags you should look out for
If the following red flags are evident in a site, it’s most likely a scam. Crypto sites should be active because users are regularly looking for updates and new details about the cryptocurrency:
No other members of the team
Finishing one major project can’t be done alone, there has to be more than one idea to complete the whole plan. One of the ways to check the legitimacy of a crypto project is to evaluate the individuals that make up the whole team. Make sure that there are more than two or four members.
The advisers’ job is to ensure that the team knows exactly what to do. Without advisers, the team won’t have the ability to convince investors to put their trust in them. A team should have more than one adviser. This is to ensure that all ideas and plans don’t only come from one source.
No diversity in tasks
A company must have more than one person in a certain task and this includes other teams of individuals who have been working in their field of expertise for many years. A team must have a team of engineers, business experts, designers, marketers, and more. This proves just how necessary it is to have people that can work in various fields to finish the project easily.
Be wary and don’t be a victim
There will always be someone who will try and scam people. The best thing to do is to be wary at all times. Check all the necessary information you need to know if a site is legitimate. Now that you have an idea on what kinds of phishing these scammers do, you won’t easily be fooled into clicking a link or giving out the necessary information.