Cryptocurrency scams are the fastest-growing category of financial fraud, with $5.6 billion lost in the US in 2023. The irreversible nature of crypto transactions makes recovery nearly impossible. This guide helps you identify crypto scams before you lose money.
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Legitimate crypto exchanges are registered with financial regulators. In the US, check FinCEN and state money transmitter licenses. Major exchanges like Coinbase, Kraken, and Gemini are publicly regulated. If a platform isn't registered anywhere, don't use it.
Your seed phrase (recovery phrase) is the master key to your crypto wallet. No legitimate service, support agent, or airdrop will ever ask for it. If anyone requests your seed phrase for any reason, it's a scam designed to drain your wallet.
Cryptocurrency is volatile by nature. Anyone promising guaranteed returns, fixed daily profits, or "risk-free" crypto investments is running a scam. Real crypto investments can go down as well as up.
When you "connect" your wallet to a website and approve a transaction, you may be granting permission to drain your wallet. Only connect to established, audited DeFi protocols. Never connect to sites you found through DMs, emails, or social media ads.
Before buying any token, check it on CoinGecko or CoinMarketCap. Look for smart contract audits, team transparency, locked liquidity, and real utility. Tokens promoted only through social media hype with anonymous teams are likely rug pulls.
Pig butchering scams specifically target people through dating apps and "wrong number" texts. If an online romantic interest starts talking about crypto investments and a platform they use, you're being set up for a pig butchering scam.