Cryptocurrencies are big news, with thousands on offer from Bitcoin and Ethereum to Ripple and beyond. With values having soared in the past couple of years that interest doesn’t look as though it will die away any time soon, but how do you stay safe when dealing with cryptocurrencies?
Along with legitimate investors, a new kind of interest has come from cybercriminals, looking to extort money. Fraudulent Initial Coin Offerings (ICOs) are a popular scam. A legitimate ICO lets investors get in on a coin at the ground level, getting the new currency before it’s officially traded. As this can be a good way to make money, fake ICOs attract investors but never release anything.
Other scams are designed to attract people’s attention, such as the popular free coin giveaways that are all over social media. These scams ask people to transfer a small amount of one coin to a wallet to act as verification, with a promise that more coins will be sent the other way for free.
As a result of growing cryptocurrencies and increasing scams, a new legal industry has started to build up, with specialists able to help and advise when things go wrong. One such company, Hogan Injury, can offer help if you’re the victim of a scam, but has also issued advice on staying safe:
- Perform research
Researching investments is essential, and that’s never truer than with cryptocurrencies. Currently traded currencies should be investigated thoroughly, looking at what people online say about the currency and checking out if there are have been any reports of scams.For ICOs, the job’s slightly harder, but you should investigate the people behind the coin and other investors to see if they’re trustworthy. For an ICO, a currency should have a whitepaper available stating what the currency will do and the milestones for the project; a poorly-worded or thin document could be a sign that the ICO isn’t all it’s cracked up to be.