How to Recognize Cryptocurrency Investment Scams

Cryptocurrency is a hot topic right now. Fear of missing out (FOMO) is leading many to have an urge to invest in crypto without having any knowledge about the subject. If you are not careful, it is extremely easy to fall for a cryptocurrency investment scam. 

Check for These Signs of a Cryptocurrency Investment Scams

In this short guide, let’s take a look at a few criteria allowing us to differentiate if a cryptocurrency trading website is likely to be legit or fraudulent. 

1. The first step is to check if there are any 'payment proofs' and if so, to verify them. It’s easy and common for scammers to present edited images/videos as fake proof and testimonials.
   
   
2. Then, our next step is to check to see if the site makes any claims of how long they have been running, and compare it to when the domain was registered. You can easily do this by entering the site's URL on ScamAdviser.com and checking the 'Key Facts' section.
   
   NB: Most scams already fail at this point.
   
   
3. If the owner information is hidden, it does not always mean it is a scam. However, but it does raise a red flag, especially if they claim to be a registered company.
   
   
4. We'll check the site social media channels with respect to how long they have been online and how many user posts they published. For example, checking the ‘Page Transparency’ section of a page on Facebook will tell you when the page was created and where it is operated from.
   
   Scammers have learnt to register their domains long in advance so comparing domain age against first evidence of being online is very important.
   
   
5. Then, verify their company registration, if applicable. When it comes to online investment, if the service is offered by a registered company, they would usually need to register with a regulatory body as well (depending on the country). If they are not, but should be, they are definitely a scam. The accuracy and legitimacy of information are checked by regulatory bodies (such as the SEC or FCA), not by the company registrar.
   
   
6. Visa, MasterCard and PayPal offer a certain level of consumer protection. If a site accepts these forms of payments they are usually legitimate. Although, I have found many sites that say they accept Visa/MasterCard, when they actually do not.
   
   Avoid paying strangers using unsafe payment methods such as cryptocurrency, as it is extremely unsafe.
   
   
7. If there are any photos/images, you can perform a Google search of the image to see if it was taken from or used somewhere else. Check images of team members and testimonials to know if they are photos of real people or random images taken from the internet.
   
   
8. If the website promises unrealistic return rates (more than a few per cent per year) then you should really beware. 1% to 15% per year is considered a realistic rate of interest and high returns come with high risk. Anyone offering guaranteed high returns is likely to be a scammer.

If the website fails one or many of these checks, then it means that the website offers cryptocurrency services which may be high risk. In that case, we suggest you protect yourself and your money and should be very careful regarding this website.

Finally, we recommend you refer to the Library of Congress (LOC) website where the relevant regulatory bodies are mentioned for each country. Please note that depending on your country, cryptocurrency investment might be at your own risk.

We hope you find this tutorial useful. If you have any questions, let us know!