How to Avoid Crypto Scams
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Scams Are Everywhere
Billions of dollars are lost to crypto scams every year. This guide could save you thousands. Read it carefully.
Step 1
Know the Common Scam Types
Rug Pulls
Developers create a token, hype it up, then disappear with investors' money.
- New token launches with big promises
- Price pumps as people buy in
- Developers sell all their tokens and vanish
- Token becomes worthless
Phishing Attacks
Fake websites or messages that steal your wallet info.
- Emails pretending to be from exchanges
- Fake MetaMask popups
- Websites with misspelled URLs (coinbsae.com)
- DMs asking you to "verify" your wallet
Fake Airdrops
Messages promising free tokens if you connect your wallet.
- Random tokens appearing in your wallet
- Sites asking you to "claim" rewards
- Connecting drains your real tokens
Pump and Dump
Groups coordinate to pump a price, then dump on latecomers.
- Telegram/Discord "signals" groups
- Celebrity endorsements of random coins
- Price explodes then crashes within hours
Step 2
Red Flags to Watch For
If you see any of these, RUN:
- "Guaranteed returns" - Nothing is guaranteed in crypto
- "Send 1 ETH, get 2 back" - Always a scam, always
- "Limited time offer" - Creating urgency to bypass your thinking
- Anonymous team - Legit projects have doxxed founders
- "Only going up" - Everything can go down
- DMs from "support" - Real support never DMs first
- Asking for seed phrase - NO ONE legitimate needs this
Social Media Red Flags:
- Fake Elon Musk/celebrity giveaways
- Comments disabled on YouTube streams
- Bots commenting "This changed my life!"
- Screenshots of "profits" (easily faked)
Project Red Flags:
- No whitepaper or vague whitepaper
- Copied code from other projects
- Team tokens not locked
- No audit from reputable firm
- Aggressive marketing, little substance
Step 3
Protect Yourself
Golden Rules:
- NEVER share your seed phrase - Write it on paper, never digitally
- Verify URLs - Bookmark official sites, don't click links
- Use hardware wallets - For any significant amount
- Enable 2FA everywhere - Authenticator app, not SMS
- Start small - Test with tiny amounts first
The Burner Wallet Strategy
Use a separate "burner" wallet for interacting with new dApps and mints. Keep your main holdings in a different wallet that never connects to unknown sites.
Before connecting wallet to ANY site:
- Check URL is correct (every character)
- Look for the padlock (HTTPS)
- Search "[site name] scam" on Twitter
- Ask in trusted Discord communities first
Step 4
Verify Everything (DYOR)
Before investing in any project:
Research Checklist:
- Team - Are founders doxxed? LinkedIn profiles? Track record?
- Code - Is it audited? By who? Check audit reports.
- Tokenomics - How much does the team own? Are tokens locked?
- Community - Real engagement or all bots?
- Use case - Does this actually solve a problem?
- Age - How long has it existed? New = higher risk.
Free Research Tools:
- CoinGecko/CoinMarketCap - Basic token info
- TokenSniffer - Scam detection for new tokens
- Etherscan - Contract analysis
- DefiLlama - TVL and protocol data
- RugDoc - DeFi project reviews
Remember
If something sounds too good to be true, it is. In crypto, there are no guaranteed returns. Anyone promising them is trying to steal from you.