Tips To Protect Oneself From Scams While Using A Cryptocurrency Exchange

The onset of digital banking indeed made banking transactions faster and easier. Eventually, people started realizing that much of their bank work is possible now by sitting at home. However, in the last 20 years, many people, especially in the West, have steadily realized the flaws of the global financial system dominated by central bank-issued fiat currencies. Therefore, cryptocurrencies using a cryptocurrency exchange have gradually emerged as an alternative to fiat currencies because of the cryptocurrency exchange. However, despite all the benefits, online scams continue to wreak havoc across the globe, targeting both fiat and crypto users. Thus, it is in the best interest of users to make them aware of the enormity of the scams and offer suggestions to avoid them as far as possible.

Statistical Facts on Online Scams: Why Users of A Cryptocurrency Exchange Should Be Careful?

Crypto users, irrespective of whether they are new or experienced, should remain vigilant about their finances online. The enormity of online scams is hard to comprehend without stating some hard statistical facts. Around 34% of people experienced a cyber scam in the last year. Since 2022, this harmful trend has increased by 7%. As per f-secure.com, it was found that around 85% of people were potential victims of a digital scam attempt. An overwhelming majority (80%) of online users worry in 2024 about their online safety. A whopping 7 in 10 people simply “do not” know whom to trust online. The concerns have sharply increased since 2022. Therefore, it is of paramount importance that users should know the tips to protect themselves from scams and enjoy crypto trading and investing activities.

Common Scams That Affect Cryptocurrency Users

Ordinary cryptocurrency users should be made aware of the common scams that affect them. It will help them to take extra precautions and quickly find out that something is wrong before the actual harm is inflicted. It is worth noting that by using trustworthy cryptocurrency exchange platforms such as PayBitoPro, the risk of becoming scams reduces considerably because of strong security measures.

Beware of Ponzi Schemes While Using A Cryptocurrency Exchange

Ponzi schemes are the most common way of duping the masses while promising exorbitant returns on investment. Some Ponzi schemes often use popular brand names and personalities to trap unsuspecting investors. Once the schemes go unchecked and become accepted, a loss of money takes place, and the scheme collapses. 

Misleading ICOs

Scammers often mislead investors by launching fake initial coin offerings (ICOs). The unsuspecting users fall into their trap and lose large amounts of money. The scammers often use tech-savvy language to attract new investors and then disappear or go missing once the looting gets over. 

Pump and Dump Schemes

The scammers intentionally inflate the price of an uncommon crypto through sheer propaganda. Then they sell those cryptos to make huge profits and inflict significant losses on the investors. They use messaging apps and social media platforms to run these schemes. 

Phishing

Phishing is one of the most effective ways scammers use to fleece money. They purposely create nearly identical fake websites and send emails as legitimate workers of a company (wallet providers or crypto exchange providers). They may send some links to trap users. Once the user clicks on the link, he/she might authorize access to the crypto wallet and then lose money. Phishing is hard to detect without using anti-phishing software because the websites and emails look very genuine. 

Fake Crypto Wallets and Exchanges

Similar to phishing website strategy, scammers use nearly identical-looking crypto wallets and cryptocurrency exchanges to dupe unsuspecting users. They often ask for personal information and financial information, and then ask users to store it in these fake crypto wallets. Once the clickings are over, they steal the money and change the links. Once the user tries to retrieve the lost money by clicking or tapping, the funds continue to reach the attacker’s wallet instead of the user. 

Impersonation in Social Media

Cybercriminals are experts in impersonation. They often impersonate reliable people on social media platforms and promise great schemes for cryptocurrencies. While building networks and associations with crypto users, the impersonator may ask for or develop access to the wallet and promise freebies in return. Once the access is provided, the impersonator steals the money and never gives anything in return. Within a short span, he may become unreachable as they are experts in removing all their traces on social media.

Tips To Protect Oneself From Scams While Using A Cryptocurrency Exchange

There are scores of tips that one can give to ensure that ordinary cryptocurrency users remain aware of scams and also become less vulnerable. Some of these tips are

Never Ever Share Private Key While Using A Cryptocurrency Exchange

The crypto wallet’s private key ensures how one can access and transfer funds in one’s wallet. The sharing of it with anyone can provide them access to cryptocurrency and anything else. Although two-factor authentication (2FA) offers additional layers of security, it is vital to check one’s password strength. It is advisable to have long alphanumeric passwords for optimal safety.

Always Remember the Private Key While Using A Cryptocurrency Exchange

The private keys need to be memorized, and forgetting can invite trouble. Once a crypto user forgets his/her private key, then retrieving it is almost impossible. Logging into one’s wallet is necessary for accessing funds. Therefore, using a password manager is the most common form of storing passwords and private keys. It also keeps the private key safe.

Make Encryptions Stronger

The encryption of devices can reduce the risks even when scammers and cyber criminals attack the system. By encrypting one’s wallet, one can defend against attacks by simply locking it or switching it off. However, there are different encryption standards depending on the operating system and the device specifications. 

Maintain An Alternative Safe Back-up

Cryptocurrency wallets should have an offline storage backup. If anything goes wrong, then users have the option of using the safe backup and trading with cryptocurrencies. An alternative safe backup can protect finance from ransomware, device malfunctioning, and accidental deletion of Exchange and wallet data. The cryptocurrency exchange backups serve a good purpose during financial crises, too, and are less vulnerable to cyber attacks because of their offline nature. For example, having a cold wallet is a prime example of a good alternative and safe backup. 

Also Read- Role of Blockchain Technology in Food Safety

Final Thoughts

There are numerous ways to protect oneself, and the list will continue to grow as cryptocurrencies and threats to them evolve. A notable fact is that it is fairly easy for an aware crypto user using a cryptocurrency exchange to protect their finances from getting hacked or scammed. Features, like multi-factor authentication, cryptographic algorithms, stronger passwords, superior encryption, and timely updates, can thwart most attempts. However, complacency can be costly, as statistical facts reveal that online scams are on the rise, and the crypto industry is not immune to them. Hence, users should never overlook crypto security for the safety of their money while using cryptocurrency exchanges.