How to Avoid Falling Victim to Common Crypto Scams
Tags: Latoken, Scam, Bitcoin, Blockchain, Crypto

How to Avoid Falling Victim to Common Crypto Scams LATOKEN Jun 8·5 min read

Crypto assets create an alternative to traditional currencies and attract the attention of investors. But apart from that, scammers are also increasingly paying attention to digital assets.

Considering the peculiarities of cryptocurrencies, the methods of their theft have their own specific features, and in some cases, differ from manipulations with ordinary bank accounts. LATOKEN experts want to tell about how scammers threaten the owners of “digital assets” and how to stop crypto scams.

The cryptocurrency market is an attractive destination for investors from different countries, regardless of whether the state recognizes “digital assets” or not, applies some kind of regulation to them or not. But for the self-protection of assets, the user must have a high level of technical literacy. In most cases, investors interested in crypto assets have only a basic understanding of information security. That is why digital assets are of such interest to scammers.

Criminals who seek to get hold of other people’s money act in much the same way as in the case of bank accounts — they try to get hold of information that allows access to the account and then withdraw funds from it. The only difference is that it is not a bank or a credit institution that is responsible for protecting access to crypto assets, but each user personally. The security of your digital wallets depends on the protection techniques you use.

We at LATOKEN have seen many schemes used by scammers. We also make a lot of effort educating our users on how to recognize fraudsters. The hardest part is preventing social engineering.

We would always like to help our users, but it is the user’s responsibility to protect access to their accounts and assets. This defense begins with understanding the possible attack vectors.

Cryptocurrencies are digital assets that have value, and for each virtual wallet, there is only one sign of its uniqueness — the private key. The person who owns this key also owns the funds on the account. If you lose your key, you also lose access to your wallet. If someone steals your key, they will be able to make a transaction, and no one will be able to prove that it was not you.

The user has the right to choose where to keep the key to the virtual wallet. It can be kept on a computer, on a smartphone, or hosted in the cloud. You can also keep the code ‘offline’ by writing it down on a piece of paper. Many people prefer to install special applications — “key keepers” for the convenience of working with wallets. Others like storing keys on online services such as crypto-asset exchanges.

Methods of Protection

Scammers usually use standard schemes and almost the same tools to steal funds from virtual wallets. Therefore, to counteract them, it is enough to stick to the following rules:

Do not store data in the public domain. If the file with the key is just on the flash drive of the mobile device, the risk of loss of assets increases. If your computer is hacked, the wallet actually ends up in the hands of a scammer. Store keys encrypted using specialized key and password storage programs, or encrypt the entire device, and you will be able to avoid crypto scams.

Don’t use the same passwords, especially when it comes to crypto exchanges or online wallets. Since we are talking about values, it is better to use different passwords for these services. Otherwise, if, say, your account on a forum or in a social network is hacked, attackers will get to your money as well.

Protect your mobile devices, especially if you use financial services and applications. It also applies to traditional banking and virtual wallets that are now available for both Android and iOS. Your device could end up being stolen. Therefore, set up password protection and do not use face unlock or geolocation — on many smartphones, they can be bypassed by showing the user’s photo. That is why some online banking applications do not allow you to work with an account if you have unlocked your smartphone with your face. In addition, it is worth setting up self-destruction of all data after, for example, ten unsuccessful unlock attempts. Your data copied to the cloud won’t be stolen, and an attacker won’t be able to get the password by simply guessing it.

Do not be fooled by social networks’ and Telegram offers and giveaways. If the wallet is well protected, scammers begin to process the victim using social engineering methods. There are cases when scammers gave investment advice for months and then, having gained confidence, asked to provide access to the wallet for verification. Recently, there have been many cases of “black investors” who ask to transfer money and then disappear. Also, many offer technical support and are represented by the exchange or service employees that should help the user “not lose money.” There are also more complex schemes. For example, scammers claim that the service does not provide social media support and provides a “safe link” that leads to a hacked website.

Keep track of your phone number if used for two-factor authentication. If you have declared yourself as a person “with cryptocurrency,” then sooner or later, they will try to steal your crypto. You can contact your operator to prohibit the restoration of the SIM card without a physical visit to the office. You can also try to register a number for confirmation codes in another country, but here you also need to be careful with the choice. For example, the American numbers of some operators are more likely to be subjected to SIM-card spoofing attacks.

Check the legitimacy of websites when dealing with virtual assets. Scammers love to create clones of popular exchanges or online services for working with virtual wallets. For example, you may receive a call from the “support service” employee who will ask you to urgently confirm the legitimacy of the wallet using the link that will come via SMS. If you have an antivirus installed and are working with a modern browser, security systems should warn you about a scam, so never ignore such alerts.

LATOKEN: Safe Investments in Crypto Assets

If you have primary defenses installed, the most important thing is to keep a close eye on your own actions. Under no circumstances should you trust the reports of the possibility of getting rich soon, as well as the security notifications. Very often, scammers imitate a routine check for “suspicious activity” and ask for a code. In other cases, they can lure you into a referral program, where you attract other investors, and as a result, everyone loses money.

By sticking to some basic rules for working with digital assets, each user can get a sufficient level of security. The protection of crypto assets can guarantee no less and sometimes even greater safety than banks since the level of security here depends only on you.