How to Protect Yourself Against Cryptocurrency, ICO Fraud

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A booming topic such as cryptocurrencies and ICOs draws not only many newbies but also plenty of scam artists who want to cheat participants. We sadly witnessed this during our ICO, so we decided to show where the main traps are hiding – and how you can protect yourself.

  1. Telegram / Email

Almost all companies that do an ICO have established Telegram groups, which are an important information medium for a token sale. There you can communicate with employees of the company (they are the admins of the Telegram group, and it is clearly indicated next to their name with the label “admin”) or chat with other token buyers. Access to these groups is not filtered. Scammers masquerade as admins and contact you via personal message (PM) to send you their own wallet address with a request to send the money or coins for the token there. For example, they claim that the official wallet is down or that there is a special bonus if you use this wallet. They also ask you for your email address to send you fake emails later on, with the same type of requests/fake opportunities.

What you should do: Use only the official wallet of the company to pay. These can always be found on the website of the company. There are usually no other wallets and there is also no bonus for using special wallets.

Be careful with email requests, even if they seem to come from a company’s email address. The sender address of an email can easily be faked (it’s called “email spoofing”). Never send your email address on Telegram in a PM, unless you are sure that you are using an official admin contact. You can recognize real administrators by the addition “admin” next to the name. This addition is only visible in the group, but not in a private chat. You can only be sure that you’re writing with a real admin when YOU contacted him (by clicking on their name in the group chat itself directly). Scammers use the profile photo of admins, the same display name and a similar username (for example, by using a capital “I” instead of a small “L”).

Sometimes, entire channels or groups on Telegram are faked. Do not fall for these fake channels! There is only one official Telegram group for every ICO. These real addresses can be found on the website of the ICO. All the others are fakes – stay away!

  1. Google / Facebook / Website

Scammers spare no effort: Some place paid ads on Google and Facebook, where they announce a real, ongoing ICO. However, these ads link to fake websites, most of which you can see in the endings of the links (.in, .pw, .id, etc.). If you buy something, your money is most likely lost, and if you even just log in, your password will be used to log in to the real ICO website and change the wallet address you want to have your tokens minted to.

What you can do: Pay close attention to what the real website of the ICO you want to participate in is. Most of the time, it is a website with a .com ending – also check for the https – that is the sign for a secure connection.

There are still some other scams. If you are not sure, ask an admin of the company in the Telegram group. Be careful when identifying the company’s real contacts, real channels and real websites. That is the basis to participate safely in an ICO.

The author of the article is Tobias Zander, founder and CTO of Savedroid.

Featured image from Shutterstock.

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