Due to the huge demand for cryptocurrencies and the rapidly changing landscape, there has been a surge in cryptocurrency-related scams. As a result, it is critical for investors to protect themselves from rogue crypto exchanges and tokens.
Every investor and non-investor is a target for con artists attempting to make quick money by preying on people who will do anything to get rich quickly.
In the recent past, cryptocurrency price movements have been extreme, with Squid Game-based coin SQUID, Kokoswap, and Ethereum meta soaring thousands of percentage points in a matter of hours. Many tokens have also plummeted in value, trapping investors.
“Crypto has gone mainstream,” said Shashi Prakash Jha, head of legal and compliance at WazirX. “While we are seeing increased participation from the youth, retail, and corporate investors, we understand the responsibilities that come with trading in a high-risk asset class.” Every investor and non-investor is a target for con artists aiming to make quick money by manipulating people who will do anything to get rich quickly.”
To determine whether a token is a scam or not, look at whether the investment scheme promises unreasonable returns in a short period of time.
“Another way to spot a scam token is if scammers advertising cryptocurrency giveaways require investors to send them a few coins for address validation. Another method is to use hacked or spoofed social media identities of well-known people to promise instant crypto doublers,” Jha stated.
Furthermore, it is critical to invest only after conducting due diligence on a project, including reviewing their whitepapers (to ensure that they follow know your customer and anti-money laundering guidelines), the founders’ backgrounds, and the quality and reputation of the exchange’s customer support infrastructure.