Written by Logan

On March 23, 2021

How to spot cryptocurrency scams

Every part of the finance industry has scammers out to get your hard-earned money. Wire fraud scams, counterfeit money, and bounced checks plague the traditional finance industry. When it comes to cryptocurrency, the scams look a little different.

You can’t counterfeit cryptocurrency. Checks don’t bounce in crypto, since funds can be verified on-chain. In cryptocurrency, scams look more like phishing attempts, fake airdrops, people after your private keys, social engineering, and impersonators. Let’s take a look at what these look like in the wild and how you can avoid them.

Phishing Attempts

A phishing attempt is when someone with bad intentions tries to get information from you by pretending to be someone else. In cryptocurrency, this often takes the form of a fake website or email address. Take a look at the difference between www.MetalPay.com and www.MetaIPay.com – can you tell what’s wrong? In the first link, that’s our name. In the second link, the “L” in “Metal” was replaced with a capital “i”. Tricky, eh? That type of scam is all over the cryptocurrency industry. Had a scammer gained access to that domain, they could’ve mirrored our website perfectly, except for a few areas where they would ask for your information and gain access to your crypto. As a result, you’d risk losing it all.

Sometimes you may receive a phishing email; these often look the same as the fake web address: something in the email address will be a little off, but probably hard to spot. To ensure you don’t fall for a phishing attempt, avoid entering your personal or account information into a website if you simply clicked on a link. Rather, you should type the web address in yourself, carefully, to ensure you are reaching the right website.

Fake Airdrops

An “airdrop” is when a cryptocurrency is automatically dropped into your wallet, instantly and without you having to really work for it. Last year, we airdropped Proton XPR into the accounts of anyone who had a balance of MTL. Pretty cool, right? Do you know what people had to do to participate in this airdrop? Absolutely nothing.

And that’s the way it should be. Fake airdrops will often ask you to import your private keys in order to “unlock the funds.” This is never a good idea and should never be required to receive your funds. Anyone promising you airdropped crypto, but needing your private keys first, should be ignored completely. Do not fall for this; if it sounds too good to be true, it probably is.

Going after your Private Keys

As a reminder, we will never ask you for your private keys. In general, a cryptocurrency company will never ask you for your private keys. However, a scammer might pretend to be part of a legitimate company as a way of getting at your private keys. If you hand them over to the scammer, they instantly gain access to your crypto and can transfer it away in the blink of an eye.

Never share your private keys with someone, ever. If you’re having trouble logging into your wallet, your private keys aren’t necessary to fix the problem, so don’t give them away. If your app is crashing, your private keys aren’t needing to troubleshoot that, so keep them private.

Social Engineering and Impersonators

This has become a real problem recently. Scammers are going on Twitter, Discord, Telegram, and other chat sites and pretending to be a member of a cryptocurrency company. They might make a profile that perfectly matches the profile of a real person. For an example, imagine a profile that looks exactly like the profile of our CEO, Marshall Hayner. This scammer might even pay for some followers, too, or even a Verified badge!

Sometimes, they’ll wait for you to post a question or a complaint about a product – then they’ll swoop in to “save the day,” and find a way to get you to hand over your private keys. Other times, they might reach out to you and offer to double your cryptocurrency if you send it to them first. Or they’ll ask for a cryptocurrency loan for just a few hours, promising to pay it back with interest.

If you’re having trouble with your account, you should always take it directly to the Support Team of whatever company you’re using. If someone on social media asks for your private keys, ignore and report them. If they ask you for crypto so they can “double it” or “pay it back with interest,” ignore and report them.

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Scammers are increasing in number in cryptocurrency, but you don’t have to fall victim to their schemes. Stay aware, speak up, and take your time when making a decision. If you find yourself rushing to recover lost funds, or chasing an opportunity that seems too good to be true, take a moment to really think through your decision.

Patience and deliberation is one of the weaknesses of scammers. Take it slow, think through your steps, and you’ll be able to navigate this space much better. In time, you’ll get very good at spotting scams; practice makes perfect.

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