Cryptocurrencies: three tips to avoid scams

Cryptocurrency can seem attractive and even dreamy. Investing, selling and buying seem simple and accessible. There are more and more websites and currencies as new competitors join the virtual currency race. But there are also more and more scams.

A Monegasque couple defrauded

New market, new ways to scam. In 2022, a Monegasque couple lost all their savings, 250,000 euros, trying to profit from cryptocurrency. Lured by a seemingly trustworthy website, the couple put their money in the hands of strangers, with the promise of a monthly interest rate of 10%. The couple signed a contract but soon received a fake email, allegedly from fraud authorities, asking them to pay tens of thousands of euros in tax.

How to avoid these situations? We posed the question to Kevin Dejoie, CFO of a Monegasque IT company, who has been investing in cryptocurrency for five years.

Choose website

Cryptocurrencies are purchased through web platforms. On these sites, there are assets (an asset is a currency. For example: Bitcoin and Ethereum are two different assets) that can be purchased with real money. You must check its notoriety when choosing the site through which you want to go. “One of the most well-known scams is phishing: fraudulent sites that look like other known or reputable sites and offer to store your wallet. In these cases, a site like CoinMarketCap will help you to be sure to access the real original sites and not to be mistaken”, explains Kevin Dejoie. Most investors operate on known and recognized sites in the field (Binance, Coinbase, Capital, etc.). The transactions are secure, the platforms do not deceive you on the investment to be made and your money is refundable at any time. The Autorité des marchés financiers has published a white list on the subject.

SEE ALSO: Blockchain and cryptocurrencies: five key dates to understand the legal framework in Monaco

Do not invest through a third party

Advice from friends or professionals is always welcome, signing contracts is not. “One of the most important things in this field is to be informed. There is training in cryptocurrency, which will allow you not to be dependent on the opinions of others. I don’t buy if I don’t know how it works,” explains the CFO. It takes more time and effort to search for the “right deal” yourself, but the success or failure of your investment is up to you!

The Chain abuse The site was born in response to the huge increase in scams in recent years, +1000% since October 2020. Launched in May 2022, it lists many scams / frauds related to the world of cryptocurrencies. Internet users themselves testify on the page.

Securing your assets

A reliable site is a good place to start, but there is always a risk that your wallet will be hacked or the platform will be targeted. So how do you store and secure your investments?

The easiest and fastest method is mobile banking. Coinbase or Binance, mentioned above, allow you to store your crypto-currencies. However, this requires the buyer to trust the platform. The safest version of storage is cold wallets. “There are ledgers, a secure key that stores your private keys. It’s sort of the key to your vault, but it comes at a cost. Having your own private keys on you remains the safest way to store your savings,” explains Kevin Dejoie.

Passwords, secure networks, anti-virus software and double authentication on the different platforms are also important security elements.

“The weakest link in the blockchain is the human being. Scams play on our emotional and human side. The education and information aspect is really essential to avoid them as much as possible,” concludes the investor.