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$14bn Theft: How To Avoid Being A Victim Of Crypto Scams

$14bn Theft: How To Avoid Being Victim Of Crypto Scams

Some days ago, Chainalaysis, a New York-based blockchain data platform, published that in 2021, digital asset holders around the world lost no less than $14 billion to fraudsters. The estimated amount, which in today’s (Monday, January 10, 2021) exchange rate means about N5.8 trillion was fraudulently claimed by scammers last year.

In what appeared to be an all-time crypto scam in the year under review, the amount lost to scammers was over 500 percent as it relates to the worth of digital assets taken by scammers in 2020.

As reported by Chainalysis, while legitimate cryptocurrency activities surpassed that of crypto scams, the latter has never depleted in recent times. “In fact, illicit activity’s share of cryptocurrency transaction volume has never been lower, since the growth of legitimate cryptocurrency usage has far outpaced that of criminal activity usage. The raw value of illicit transactions reached its highest level ever in 2021, yet illicit transactions accounted for just 0.15% of cryptocurrency transactions,” the report reads.

BizWatch Nigeria understands that with the increasing interest in the adoption of cryptocurrency, it is no surprise that scammers have been exploring innovative ways of taking advantage of the Decentralised Finance (DeFi) system, which charactised digital assets trading and ownership. However, as one gets more involved in the new digital monetary mechanisms, it is pertinent to understand the risk attached to it and how to be safe from scammers.

It is in this light that this publication presents below how to avoid being scammed in the crypto sector:

  • Don’t take any information at face value -Investigate the claims being made around any investment, especially if they seem too good to be true or promise overnight windfalls. For instance, in 2020, a lot of people fell victims, as Jeff Bezos, Bill Gates, and other billionaires were targeted.
  • Don’t trust anyone-government officials, public figures, strangers-who contacts you directly asking for payments in cryptocurrency or offering you an “investment opportunity.”
  • Never share your private key or the seed phrase to your cryptocurrency wallet with anyone, and store that information somewhere offline, otherwise known as a cold wallet.
  • Enable two-factor authentication whenever possible on whatever kind of crypto wallet and exchange you use. But be aware that this is not a sure-fire solution, as many people experienced when Coinbase was hacked.
  • Double and triple-check website URLs. Scammers attempting a phishing scam will copy the URL of legitimate sites and swap letters and numbers—an “l” for “1” or “0” for the letter “O,” for example.
  • Reject any offer that requires an up-front fee no matter what, especially if that fee has to be paid in cryptocurrency.

About Author

Damilare Famuyiwa is a journalist and media consultant with over seven years experience. Trained at the Nigerian Institute of Journalism (NIJ), he has since been actively covering different beats, which include finance, showbiz, and music. You can reach him on [email protected]

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