How to spot and avoid crypto scams
With a high demand for cryptocurrencies and an evolving space, there has been an increase in related scams. It is therefore important that investors protect themselves against fraudulent crypto exchanges and tokens.
Every investor or non-investor is a target for scammers looking to make easy profits by exploiting individuals who would do anything to get rich instantly.
Cryptocurrency price swings have been crazy in the recent past with the Squid Game SQUID coin, Kokoswap, Ethereum rising thousands of percentage points in just a few hours. Many tokens also experienced a massive drop, leaving investors trapped.
Shashi Prakash Jha, Head of Legal Affairs and Compliance at WazirX, said: âCrypto has become widespread and while we are facing increased participation from young people, retail investors and businesses, we understand the responsibilities that arise from trading a high risk asset. to classify. Every investor or non-investor is a target for fraudsters looking to make easy profits by exploiting individuals who would do anything to get rich instantly. “
An easy way to identify a token is a scam or not is to see if the investment program promises unrealistic returns within a short period of time.
âAnother way to identify a scam token is if scammers promising crypto giveaways ask investors to send them a few coins for address validation. Another way is hacking or spoofing social media addresses of well-known personalities promising an instant doubling of the crypto sent, âJha said.
In addition, it is very important to invest after doing due diligence on a project, to consult their white papers (which follow the guidelines of knowing your customers and anti-money laundering), the backgrounds of founders and the quality and reputation of their customer support infrastructure exchange before investing.
Currently India does not impose any specific AML / CFT standards for crypto exchanges. However, all stakeholders voluntarily follow recommendation c on VASPs. Exchanges also engage with States, central and international agencies in the sharing and establishment of international best practices in the area of ââAML / CFT.
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