Key takeaways
To navigate the crypto world safely, it’s important to start by understanding how scams work, although knowing how to protect your money is just as crucial.
This article is the first in a miniseries detailing best practices for fighting crypto scammers.
Beware of “investment experts”, so-called “Binance employees”, online dates that seem too good to be true, and multi-party investment schemes levels that promise you income if you invite new people.
We recently collected and summarized the most common scams in the cryptocurrency industry, including common tactics used by criminals, in an in-depth blog series titled How to Survive Scams. There you will find detailed descriptions of common scams such as Ponzi schemes, fake job offers and Binance impostors, to name a few.
While it's very helpful to understand how different scams work, we also want to educate you more about steps you can take to avoid common scams.
Crypto 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 world or investing for the first time, the following situations should alert you.
The Investment Specialist, or “Binance Employee”
On the internet, strangers or so-called “Binance employees” who send you investment advice or offer ways to “double your money” when you didn’t ask are most likely scammers. Additionally, Binance employees will never send you the first message on social media, especially not to talk to you about investing, give you money, or offer you an exclusive service.
Three tips to protect yourself from imposter scams
1. Calculate if the return offered is realistic
The easiest way to assess the legitimacy of an “investment expert” is to calculate the returns they offer you. An annual return of 20%, or a daily return of 0.0548%, is already extremely high within the investment community: be wary of "investment experts" touting returns above 20%.
Note: Still be cautious if someone offers you investment advice or promises to multiply your investment, even if the promised annual return seems reasonable, such as 10%. It could be a scammer trying to get money from you.
2. Use Binance Verify
Binance Verify is our official database that allows anyone to verify domain names, email addresses, phone numbers, WeChat and Telegram IDs as well as Twitter usernames supposedly belonging to at Binance. If someone claims to be an employee or representative of Binance, do not trust them blindly and first consider verifying their legitimacy on Binance Verify.
Stay vigilant even if the source is verified on Binance Verify: Scammers often use the names of real Binance employees to deceive their victims.
3. Find information about your interlocutor
Find more information about the “investment program” in question, including tools like who.is to find out when the site was created and how long it has been active. Check URLs on Scamadviser, a database that compiles and rates websites based on trustworthiness.
Always do your research before entrusting your money to a platform, person or entity. Conduct at least a quick Google search for the website or project name, and if you see any discrepancies, block contact and cease all communication. Scammers generally rely on ready-made scenarios to try to convince you of their legitimacy.
Website Review on Scamadviser
A real love at first sight
If your online relationship quickly goes from a first exchange to mad love, be careful: it's definitely an online dating scam.
Three tips to protect yourself from a romantic scam
1. Perform a reverse search of received images
Use image search apps like TinEye, Google (image search), or Baidu (image search) to check if the person you're talking to is who they say they are: scammers often steal photos of real people on social networks.
TinEye Homepage
2. Look up the names given to you
Google the full name of the person you're chatting with, adding keywords like "scammer," "romance scam," or "online dating scam." Also ask for their social media profile. If you can't find any information about her online, be wary, especially if she regularly talks to you about money.
3. Ask to make a video call
Your potential partner may be impersonating someone: to eliminate this possibility, try arranging a video call to verify if they are who they say they are. If he keeps dodging your request, we advise you to be on your guard: scammers are never short of excuses to justify their inability to answer a video call.
High returns with a tiered invitation system
Programs offering you high returns and upgraded VIP levels based on the number of people you invite are considered high risk and often conceal a scam. These systems generally have no stable business model: your revenue depends on how many new users you can convince to put money into it.
The distinctive signs of a fake crypto investment
1. Calculate if the returns offered are realistic
Traditional indicators consider that an annual return between 10 and 20% already constitutes a very high return on investment. The organizers of fake investments sometimes try to seduce you with tempting offers, for example by offering you a daily return of 1%, or an annual return of 1,230%: you will recognize that this is a highly unlikely.
As explained previously, constantly remain on your guard even if the promised return seems more reasonable.
2. Search for wallet addresses
Use a block explorer like Bitquery to get information about withdrawal addresses. Review the address balance at different times, the dates the addresses were created, the frequency of withdrawals, and the destination of the money transferred.
Mastering these, albeit more advanced, tools is essential for any crypto user: consider using them the next time you see an unfamiliar wallet address.
Refer to our Binance Academy guide How to Use a Bitcoin Blockchain Explorer for a complete tutorial on the subject.
Bitquery
To learn more about a specific address, you will need to use a block explorer specific to the network in question, such as:
TRONSCAN for the TRON (TRX) protocol
Etherscan for the Ethereum (ETH) network
BscScan pour BNB Chain (BSC)
btc.com for the Bitcoin (BTC) network
TRONSCAN analysis functionality
Conclusion
To safely navigate the world of digital currencies, you should carefully consider the unsolicited investment advice you receive, be wary of online relationships that move (too) quickly, and beware of multi-party investment schemes. levels offering seemingly very high returns.
By determining realistic and unrealistic returns on investment, verifying sources, carrying out the necessary checks on your interlocutor and using the tools at your disposal to ensure the legitimacy and authenticity of the information received, you will know how to protect yourself from the most common scams and protect your crypto-assets.
For more information
How to survive scams: watch out for fake Binanciens
How to Survive Scams: Fake Crypto Investments to Be Wary of
How to Survive Scams: The Red Flags of an Imposter Scam
Disclaimer and Risk Warning: This content is presented to you “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 as a recommendation to purchase a specific product or service. Prices of digital assets can be volatile. The value of your investment may go down as well as up and you may not get back the amount you invested. You are solely responsible for your investment decisions and Binance is not responsible for any losses you may incur. This does not constitute financial advice. Please see our Terms of Use and Risk Disclaimer for more information.