Highlights
Knowing how scams work is a great start for anyone looking to stay safe in the world of cryptocurrencies. Knowing how to keep your money safe is just as crucial.
This article is the first part of a mini-series exploring best practices for dealing with cryptocurrency scammers.
Be wary of “investment experts,” self-proclaimed “Binance staff,” online romantic dates that seem too good to be true, and tiered investment schemes that promise income for inviting new people.
Keep your funds SAFU! Here is a summary of some of the best tips to help you avoid and identify annoying scammers trying to steal your cryptocurrency.
We recently compiled and summarized the most common cryptocurrency scams, including common tactics used, in an in-depth blog series titled Learn About Scams. In the series you will find detailed breakdowns of popular scams such as Ponzi schemes, fake job offers, and Binance imposters, to name a few examples.
While it's helpful to know how different scams work, we wanted to shed more light on how you can best avoid common fraud schemes.
Cryptocurrency scammers mainly target new users who are unfamiliar with the industry and see the cryptocurrency market as an opportunity to make easy money. If you are new to the crypto space or any form of investing, keep the following scenarios in mind.
The investment specialist or “Binance employee”
Strangers on the internet or self-proclaimed “Binance employees” who message you with unsolicited investment advice or offers to “double your money” are most likely scammers. Additionally, Binance employees will never proactively message you on social media to talk about investing, give you money, or offer you any exclusive services.
Three tips to avoid imposter scams
1. Understand what a reasonable profit would be
If you want to evaluate the authenticity of an "investment expert", the easiest way to do so is to calculate the returns they offer. Annual returns of 20%, which translates to a daily return of 0.0548%, are already considered very high among the investment community. Be wary of any “investment expert” who promises returns greater than 20%.
Keep in mind that you should be cautious with anyone who offers you investment advice or promises to multiply your money. Even someone who advertises a reasonable annual return, like 10%, could be a scammer trying to trick you into giving away money.
2. Use Binance Verify
Our official database, Binance Verify, allows anyone to verify Binance domains, email addresses, phone numbers, WeChat IDs, Telegram IDs, and Twitter handles. Don't instantly trust anyone who says they work for Binance or represent Binance. Verify the source first on Binance Verify.
Continue to proceed with caution even if your query shows that the source is verified. Scammers often use real names of Binance employees to trick their victims.
3. Check the background
Look for key information behind the “investment program.” Use tools like who.is to find when the investment website was founded and how long it has been active. Check URLs with Scamadviser, a database that compiles and scores websites based on their trustworthiness.
Always do your research before trusting your money to a platform, person or entity. At the very least, you should do a quick Google search on the website or project name. If you notice anything strange or irregular, block contact and cease all communications. Scammers often have scripts prepared to try to convince you of their legitimacy.
Website Review on Scamadviser
love comes fast
If an online relationship quickly goes from first contact to falling in love, be alert. It's a telltale sign of an online dating scam.
Three tips to detect a romance scam
1. Reverse Image Search
You can use image search apps like TinEye, Google (image search), or Baidu (image search) to check if the person is who they say they are. Scammers often steal photos from real people's social media profiles.
TinEye Home Page
2. Search the person's name to get more information
Try searching for the full name of the person you're chatting with on Google using keywords like "scammer," "romance scam," or "dating fraud." Ask for their profile on social networks. If you can't find any information about that person on the Internet, tread carefully, especially if money becomes a recurring topic of conversation.
3. Ask to see his face via video call
Your potential partner could be impersonating someone. Ask for a video call to check if they are who they say they are. If he continually avoids the topic, it's best to exercise caution. Scammers will spin a series of lies to convince you that they can't make a video call.
High returns with a tiered invitation system
Schemes that offer you high returns and upgraded VIP levels based on the number of people you invite are considered high risk and are often signs of a scam. There is usually no stable business model behind such deals. Your income depends on the number of new users you invite to deposit money.
Warning signs to identify a false cryptocurrency investment scheme
1. Understand what a reasonable profit would be
According to traditional metrics, an annual return of 10%-20% is already considered a very high return on investment. Fake “investment schemes” may try to seduce you with offers such as 1% daily profit. This equates to an annual return of 1230%, a highly unlikely figure.
As we have already said, you have to be careful even if a project or plan announces a more reasonable profitability.
2. Find the wallet addresses
Use a block explorer, such as Bitquery, to view withdrawal address information. Look at the address balance at different times, when the addresses were created, how often withdrawals are made, and where the money is going.
These tools, although more advanced, are important to understand for every crypto user. Try using them the next time you come across an unknown wallet address.
For a complete tutorial, check out our Binance Academy guide: How to Use a Bitcoin Blockchain Explorer.
Bitquery
To get more details about a specific address, you'll need to use a network-specific block explorer, such as:
TRONSCAN for the TRON (TRX) protocol
Etherscan para la red Ethereum (ETH)
BscScan para BNB Chain (BSC)
btc.com for red Bitcoin (BTC)
Analysis function in TRONSCAN
Conclusions
To stay safe in the world of digital currencies, it is important to be wary of unsolicited investment advice, rapidly progressing online romantic relationships, and tiered investment schemes with seemingly high returns.
By understanding realistic investment returns, verifying sources, performing necessary background checks, and using available tools for research and due diligence, users can protect themselves against prevalent scams and safeguard their crypto assets.
You might also be interested…
Learn about scams: detect false crypto investments
Learn about scams: warning signs to recognize impostors
Legal Notice and Risk Warning: This content is presented “as is” for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial advice, nor is it intended to recommend the purchase of any specific product or service. Digital asset prices are volatile. The value of an investment may go down as well as up, and it may be the case that the user does not recover the amount invested. Only you are responsible for your investment decisions. Binance is not responsible for any losses you may incur. This should not be construed as financial advice. For more information, please see our Terms of Use and Risk Warning.
