Beware of Cryptocurrency Scams

Cryptocurrency is essentially a “buyer beware” investment

The new virtual currency is trendy but dangerous.  If you’re not careful, you could fall victim to a variety of scams that lost investors worldwide about $14 billion in 2021, according to the blockchain data firm Chainalysis.

But let’s say you want to give it a try! 

Until you’re an old hand at Crypto, a good rule of thumb is to keep it at less than 5 percent of your portfolio.  Remember never to risk money on Crypto investing if you may need funds for emergencies.

One thing about Cryptocurrency is for certain: it has provided scammers with many new ways to commit fraud, without much chance of finding the perpetrators or recovering your money. 

Here are a few things to beware of:

  • Individuals or companies that deal exclusively in Crypto
  • Anonymous or fake identities
  • Games in which scammers may do a “rug pull” where they sell out and disappear
  • Offers that promise 1000 percent return-on-investment
  • Dating sites where one of the parties convinces the other to invest
  • Typical phishing scams asking you to fill out forms with your personal information

Of course, some Crypto offers may be legitimate. But here are a few red flags you should know about just in case:

  • Typos and misspelled words
  • Contracts that obligate you to hold Crypto without selling
  • Celebrity claims (check the return email or website for authenticity)
  • Promises of free money
  • Claims on social media that seem too good to be true
  • Vague details on where your money is going

If you’re going to jump in, know when and how to use a Crypto Wallet.

As with any new technology, there are fortunes to be made. 

Just remember that the Federal Trade Commission says about 7,000 people in the United States alone lost $80 million to Crypto scams from October 2020 to March 2021.  If you’re anxious to give it a try, proceed with caution and know the risks.

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