6 Common Cryptocurrency Scams & How to Avoid Them
On top of learning investing strategies, protecting your digital assets from scamming is also quite important. Therefore, imToken security team has summed up six common scams you should keep an eye out for. Don’t fall victim to these scams!
1. Pyramid or Ponzi Scheme
Many blockchain pyramid schemes share the following characteristics:
High investment returns with little or no risk
Lies about decentralization, security and transparency
Fake news, claiming cooperation with renowned companies
Community marketing, a commonly used strategy to brainwash people into investing their funds
How to avoid pyramid schemes?
Money doesn't grow on trees！
2. Fake wallet and airdrop
Scammers lied that users can get airdrop tokens once downloaded the latest version of imToken. They have created quite sophisticated fake imToken wallet apps that, once you download and import your private key, can be used to steal your coins.
How to avoid fake wallet and airdrop scams?
There is only three ways to download imToken wallet:
Official website https://token.im/
Please do not download imToken app from other third-party channels. What’s more, imToken has never airdropped any tokens and the latest official activities will be published here https://support.token.im/hc/en-us/sections/360005311314
If you see imToken activity information in other channels, you can go to the link mentioned above to check.
3. Over-The-Counter (OTC) Trading and Arbitrage
Scammers set up a Telegram group and lied to users that they could exchange ETH for other tokens in a certain ratio, tricking users into transferring their digital assets to the scammer's address and returning the users fake tokens.
How to avoid OTC and Arbitrage scams?
Technically speaking, arbitrage refers to trading between different platforms when there is a large spread to make profit. It demands a large amount of funds and is highly risky. Please do not trust in a man who promises you that arbitrage is risk free. All the more so if that person wants your money upfront.
4. Fake officials
Scammers impersonate officials of imToken to contact users claiming to help users solve problems and ask for users’ mnemonic/private key/keystore to be used to transfer coins.
How to avoid fake officials scams?
imToken is a decentralized wallet and will never ask for your mnemonic/private key/keystore which can be used to transfer your coins. If you need help, please contact us via firstname.lastname@example.org.
5. Fake tokens on DEX like Uniswap and Justswap
Anyone can list their tokens on DEXs, so scammers have listed plenty of fake tokens on DEXs such as Uniswap and Justswap in the hope of tricking people into sending their funds to buy these fake tokens.
How to avoid fake token scams?
Projects usually publish the contract addresses of the token, the only way to identify, in their official websites or whitepapers. Please match this contract address with the address in the token bar you intend to swap.
6. Fake QR codes
Scammers often send you an address QR code during off-exchange trading, and you will enter a fake transfer page after scanning the code. Once you click “Confirm” on the page, your token transfer authorization is granted to scammers, resulting in the theft of assets.
Note: The real transfer page has a scan icon in the top right corner.