How to identify a scam
In addition to checking out the company’s track record, consider your crypto holdings’ exposure to cryptocurrency fraud. You can check this exposure by visiting CoinSchedule.com, which monitors an aggregate of cryptocurrency assets. Here, you can input your holdings’ unique ID into the service to see the current value of your coins. If a suspicious site shows up as the cryptocurrency holder of your funds, that could be a sign that it’s a scam, warns business information site Nation.
Experts are also warning that cryptocurrency scammers are eager to meet new people and get their hands on your money.
How to spot an ethereum fraud
An ethereum fraud is a company that promises to use blockchain technology and computer algorithms to create a new currency and promises very large profits. In some cases, they’ve touted cryptocurrencies with names that sound nearly identical to bitcoin, despite not being based on the same technology.
If you receive a call or email with someone wanting to get into a cryptocurrency investment, make sure you ask the person for an honest and detailed explanation of how they plan to use your investment. Always confirm with several third parties that they’re legitimate, as scammers may try to confuse you with language that sounds official. Scammers can hide behind anonymous wallets, PayPal accounts, and fake identities.
The importance of transparency
Some companies avoid questions and scrutiny from the community, making it easy for a scammer to swoop in and create a social network in the “dark web” that has a certain amount of transparency. These “unverified” communities are relatively unknown and, therefore, less difficult to debunk because they lack a platform to be reviewed. The crypto markets are too small, too new, and too unregulated to have the same reputation and scale as more established social networks.
Don’t hesitate to ask questions
Try not to automatically dismiss a startup or a new crypto company that asks you to sign up, even if the questions are simple ones such as how to create an account. Scammers are more likely to ask questions than their counterparts.