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First of all we would like to mention that in our daily work, we see a lot of sophisticated players being defrauded. So it is not just happening to unknowing or naive people or institutions. Scammers have become more and more sophisticated and have been able to steal or lie money out of pockets of some of the most advanced Venture Capital firms, exchanges and even Banks. This might give you some comfort to know, that it can happen to everyone.

However, there are some basic rules to follow in order to lower the chances and greatly improve security. If you are too lazy to read through all the rules, there is for each section 1 absolute master rule that if you don’t follow it, you will be losing your money sooner or later for sure.

Your own wallet (hardware & software)

  1. Never ever, we mean really never, share your private key with anyone. There is not a single use case, where someone must have your private key. Someone asking for it, is 100% a scammer
  2. Do not store your seed or private key somewhere on your computer and if you do (we know many do so let’s not ignore that), make sure its encrypted at the very least.
  3. Use at least 12 character long passwords with lower and capital letters, numbers and special characters.
  4. Never give anyone access to your computer with TeamViewer or any other desktop sharing app while you are handling your wallet. Many fraud cases involve people giving control to a “support agent” that then removes all the funds. Nobody serious would ever ask you to enter a pin code, password or private key while you share the screen or even worse, have someone remote control your computer or phone.
  5. Do not use your wallet ever on a computer that is not yours
  6. Install security software such as Malwarebytes (www.malwarebytes.com) and keep it enabled. Do not ignore warnings.

Master Rule: Do not ever share your seed or private key

Exchange Wallet

  1. Do not store all your funds on 1 exchange. Spread your funds on multiple, reputable exchanges or even better, have part of your funds in an offline wallet (preferably hardware). The more places, the better.
  2. Do not use unlicensed and less known exchanges and if you can’t avoid it, make sure to only use them for money you are willing to lose and always withdraw funds after you have done what you intend to do.
  3. Do never share your login with anyone. Not even with your family members. Not that you don’t trust them, but you cannot trust that their digital devices are not compromised
  4. Always use 2 Factor Authentication besides username and password. Two factor authentication is to be enabled for login as well as withdrawing funds.
  5. If you lose your phone, imagine it has been stolen and someone can access it. The thief has access to your exchange account where you might have been logged in and has access to your emails (2fa). Therefore, immediately log in to your account from another of YOUR devices and change the password as well as terminate all other open sessions (if possible).
  6. Always verify and re-verify the address to which you are withdrawing funds to. There has been clipboard malware that changes a bitcoin address you copy with another one

Master rule: Do not store all your funds on 1 exchange.

Fraudsters, Con-Artists, Investment Scams

  1. Nobody with a legitimate business model or great investment idea is reaching out to you via cold call/email/telegram (somebody just writes you) and wants you to deposit Bitcoin. If you wonder, from where they have your contact, its for sure a scam.
  2. It never costs money to receive money. Never pay somebody money to unlock more money. This is 100% a scam
  3. If it sounds too good to be true, it is.
  4. Nobody will double or even just 50% increase your money guaranteed or within a certain time frame or at all. No serious asset manager or investor, even algo trader, would ever give you a guarantee of success and lure you in with such high claims.
  5. Know Your Customer or in this case, your Service Provider. Ask details about incorporation, personal information, etc. Do your google research and if you have even just 1 red flag, abort.
  6. If even remotely insecure about a transaction, request to pay partial. Even the most professional businesses do not pay each other all upfront, especially if it’s a cross border transaction
  7. Do not trust your friends recommendation of unknown services. They might have fallen into the trap of a scammer not knowing about it.

Master rule: Nobody is interested in making you rich. Really nobody.

Scam Coins & Projects

Here it is important to mention what is not a scam. Many projects have been called scams but all they were are failed businesses you should not have invested in in the first place. The line between scam and a bad business is blurred, as it depends a lot on the intentions. That is why we would like to highlight here that just because you lost all your money by holding a coin, it does not necessarily mean it was a scam. Maybe their business model was good and so were their intentions, but a sudden event has caused them to seize operation or the company just lost the momentum. If you buy no name coins, you are buying into very early stage projects, sometimes just ideas. Therefore, you must expect that 90% will go to 0. Be aware of what you are buying.

Do not invest what you cannot lose. By that we mean what you can lose and not care about so much that it robs you of your sleep.
Example: if you have 1000 USD in assets, we assume you can lose 20 USD and not shed a tear. If that is true, only invest that much and not more.

Nothing on this website is an investment advise but just an advise in not to be scammed.