5 warning signs for crypto scams

Invest Safely: 5 Warning Signs of Crypto Scams 

No investment is 100% safe. Wherever attractive returns are promised, there is also a risk of losing the money you’ve invested—especially if you fall for a crypto scam. To prevent this from happening, there are some warning signs that can help you spot potential scams as early as possible. If you see the following warning signs, all your alarm bells should go off.

# Unrealistic Profit Promises

The crypto market attracts many short-term traders hoping for quick money. Therefore, it is not surprising that exaggerated profit promises are commonplace. If someone promises you a 200 percent return within a few days, caution is definitely in order! Reputable crypto projects do not advertise with guaranteed wealth, simply because wealth can never be guaranteed! Even though scammers would like you to believe otherwise, the price of a coin cannot be predicted with exact precision. Exactly for this reason, black sheep try to exploit the greed of investors to trick them into trades that they will definitely regret.

Therefore, find out in advance which returns are realistic for which crypto projects and, above all, remain patient if prices behave differently than expected.

# Lack of Transparency at Crypto Exchanges

Reputable crypto providers do not lure customers with exaggerated profit or return promises. Nor do they try to hide in anonymity. You should definitely be suspicious if you can barely find any information about a crypto project. So if you find neither information about the company nor a corporate vision or contact details, that is not a good sign. Ideally, reputable crypto providers have an official license; this is how you can be sure that they are subject to a regulatory authority and are regularly monitored.

# Artificial Time Pressure

A popular scam tactic is to artificially create pressure in order to push unsuspecting traders into making hasty decisions. The more frantic the tone, the more likely it is that crooks are at work. Therefore, do not let yourself be flustered if someone tells you that you must act right now or invest in a specific cryptocurrency. Especially if you feel that an offer is too good to be true, it usually is!

Therefore, always take the time to check who is behind a crypto project and only invest money if the asset also fits your portfolio!

# Lack of Safety Measures

When trading cryptocurrency, security should be your top priority. Reputable crypto providers use two-factor authentication and encrypted connections. If these standard requirements are missing, you should steer clear of that provider and instead use well-established exchanges like Finst.

In addition, there should be transparency regarding data protection. Find out what happens to your data. If it is sold to countless advertising partners or if it is not even clearly explained what happens to your information, you should think twice about whether you want to register.

# No payout of winnings

Many crypto scams work like this: you invest, see rising profits on the platform, but can never withdraw your money. Instead, you are told that you first have to pay a fee before the withdrawal is possible. Or you are supposed to buy additional coins to „unlock“ your account.

If you cannot simply withdraw your money, even though there is obviously no reason why you shouldn't be able to, something is wrong! Therefore, test platforms you are unfamiliar with first with small amounts so that any potential loss is limited.

Also, do not let yourself be unsettled by alleged payouts from other users. Scammers often create screenshots that are supposedly meant to prove that payouts are indeed possible and are being made. If payouts fail to materialize entirely, avoid the provider in the future!

How to Protect Yourself from Crypto Scams in the Long Run

Better safe than sorry! It is better to check every crypto project twice before you finally decide to invest. Of course, it is also an advantage if you come up with a clear strategy in advance so that you can better assess whether a particular project fits your goals at all.

The following steps will help you protect yourself against crypto scams:

• Invest only on licensed platforms
• Research the provider using independent sources
• Don't let emotions or exaggerated profit promises guide you
• Use secure passwords and enable two-factor authentication
• Keep your coins in a private wallet as soon as you are not actively trading with them