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• To stay safe in the world of cryptocurrencies, it is critical to know how scammers operate and take steps to protect your assets.

• This article is the first in a short series of posts on the best ways to combat crypto scams.

• Be wary of so-called “investment experts,” those posing as “Binance employees,” suspiciously ideal long-distance relationships, and multi-level investment schemes that promise returns for referring new people.

Ensure the safety of your funds! We're sharing our best tips for identifying scammers who want to steal your cryptocurrency.

We have collected and summarized information about the most well-known and common types of cryptocurrency fraud in the “How to Recognize Fraud” blog series. In it you will find detailed information about various types of scams such as Ponzi schemes, fake job offers, impostors posing as Binance employees, and other scams.

While understanding the specifics of different scams is helpful, we'd like to shed some light on how to avoid the most common types of scams.

Crypto scammers primarily target new users who are not yet familiar with the industry and view the cryptocurrency market as an opportunity to make easy money. If you're new to the cryptocurrency space or any other form of investing, beware of the following scams.

Investment Expert or "Binance Associate"

If strangers on the internet or those calling themselves “Binance employees” send you unsolicited investment advice or offers to “double up your capital,” you are likely dealing with a scammer. Real Binance employees will never write to you on social networks and tell you about investments, offer money or any exclusive service.

Three ways to recognize impostors and avoid being scammed

1. Assess the realism of your income

The easiest way to assess the authenticity of an “investment expert” is to calculate the return they offer. An annual return of 20% (0.0548% per day) is already considered very high in the investment community. Be wary of any “investment experts” offering returns greater than 20%.

Always exercise caution when communicating with those who offer investment advice or promise to increase your capital. Even promises of a more or less realistic annual return (for example, 10%) can still come from a scammer who is trying to steal your money.

2. Use Binance Verify

Our official Binance Verify database allows anyone to verify their Binance data: domains, emails, phone numbers, WeChat, Telegram and Twitter profiles. You should not immediately trust anyone who claims to be an employee or representative of Binance. Always check the source on Binance Verify.

Even if the source is verified, remain vigilant. Sometimes scammers use the real names of Binance employees to scam their victims.

3. Study information and check data

Check key information about the “investment program”. Use tools like who.is to find out when the site was created and how long it has been around. Check URLs with Scamadviser. This database collects and ranks sites based on their reliability.

Carefully research information about a particular platform, individual or legal entity before entrusting your money. At a minimum, it’s worth searching for the name of the project or its website on Google. If you notice anything suspicious, block that contact and stop communicating. Often, scammers communicate using templates and blanks to dispel your doubts.

Scamadviser site rating

Love at first sight

If your online acquaintance quickly develops into mad love, you should be wary. This is a sure sign of a romance scam.

Three ways to avoid romantic scams

1. Search the person you're talking to in their photos

Upload the person's photo to image search services such as TinEye, Google or Baidu (image search) to see if they are pretending to be someone else. Typically, scammers steal photos from real people's social media profiles.

Home page TinEye

2. Search by name for more information

Google your date's full name with the keywords "scammer," "romance scam," or "dating scam." Ask your partner to share their social media profiles. If you can't find any information on the Internet, this is a reason to be cautious, especially if the conversation often turns to the topic of money.

3. Ask to see each other via video call

Your potential partner may pretend to be someone else. Offer to have a video call to check if he is who he says he is. If your interlocutor constantly avoids this topic, you should be wary. Fraudsters will come up with any excuse not to participate in the video call.

High profitability in a multi-level invitation system

Schemes that promise high returns and upgrades to VIP levels based on the number of people you invite are considered extremely risky and often involve fraud. Typically, stable business models do not make any such promises. In these tiered schemes, income depends on the number of new users you convince to deposit money.

What signs can be used to identify a fraudulent crypto investment scheme?

1. Assess the realism of your income

It is believed that 10-20% per annum is a very high rate of return. Fake “investment schemes” lure in with offers like 1% daily profits. This corresponds to a 1230% annual return, which is extremely unlikely.

As we have already said, one should be careful and remain vigilant even if the project or scheme offers more reasonable returns.

2. Search by wallet address

To check output address information, use block explorers such as Bitquery. Observe address balances at different times, find out when they were created, how often withdrawals are made, and where the money goes.

Although these tools are not that easy to use, they are essential for every cryptocurrency user to master. Use them the next time you come across an unknown wallet address.

For more information, see the Binance Academy guide: How to Use the Bitcoin Blockchain Explorer.

Bitquery 

Detailed information about a specific address can be found in the block explorer of a specific network, for example:

• TRONSCAN for TRON protocol (TRX)

• Etherscan for Ethereum (ETH) network

• BscScan для BNB Chain (BSC)

• btc.com for the Bitcoin (BTC) network

Function analysis of TRONSCAN

Conclusion

To avoid scams in the world of digital currencies, you should be wary of unsolicited investment advice, new online relationships that are rapidly gaining traction, and multi-level investment schemes with suspiciously high returns.

Evaluate true investment returns, check sources, use available screening tools, and do your due diligence. With all these measures, you can protect yourself from common types of fraud and protect your crypto assets.

Additional Information

• How to Recognize a Scam: How to Protect yourself from Imposter Scammers on Binance

• How to Recognize a Scam: Crypto Investment Scams to Watch Out for

• How to recognize a scam: the main signs of an impostor scam

Risk Warning and Disclaimer. The following materials are provided “as is” without warranty of any kind for general reference and educational purposes only. This information should not be considered financial advice or a recommendation to purchase any specific product or service. The value of digital assets may be volatile, increasing the risk of loss of investment. You are solely responsible for your investment decisions. Binance is not responsible for your possible losses. This information does not constitute financial advice. See Terms of Use and Disclaimer for details.