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The amount of scams in the crypto community has really been bad for cryptos overall. From Ponzi schemes to phishing scams, there is a lot to watch out for and it's not often easy to spot the good guys from the bad guys. Here are some things to look out for:

1. Scam Coins and Scam ICOs

With so many ICOs failing and an entire platform dedicated to naming them, you better be sure you know what you are getting into when you invest into an ICO. An ICO (Initial Coin Offering) is a fantastic way to raise money for a new venture, but unfortunately, many ventures fail to materialize and investors are left poorer.

How to stay safe:

  • Always do your own research and never invest more money than you are willing to lose.
  • Use platforms like deadcoins.com to spot bad coins early!

2. Phishing

A phishing scam is when a malicious user creates an e-mail that looks similar to that of a company they are trying to impersonate. They then send this e-mail to clients of the company with the hope that the client will click on the links and either provide their login details or other personal information which they then use for nefarious purposes. 

How to stay safe: 

  • Always make sure you end up on the right website. If you click on a luno.com link, make sure your browser says LUNO.com at the top.
  • Keep up to date with phishing scams by using websites like badbitcoin.org and cryptoscamdb.org 

(Tip: have a look at what Luno is doing to fight phishing here)

3. Competitions and Giveaways

Koinexpert.com is running a competition through Compsaurus.com where you can win R5000.00 worth of Bitcoin. Here are the reasons how you can tell this is legit:

  • There is no entry fee to enter the competition - scam competitions often charge a fee
  • The competition is hosted on a reliable platform where you can see who the previous winners are.

If you do your own sanity checks and stay away from companies that charge an entry fee, you should find competitions that are legitimate and actually give you a fair chance of winning something.

(Tip: here's another competition where you can win some Bitcoin, also on the Compsaurus platform)

4. Pump and Dump Schemes

There seems to be a strong opinion that Thorecoin is essentially a pump and dump scheme. The article explains it in more detail, but you should be able to easily get the picture by opening the graph on coinmarketcap.com. The coin grew over 6000% in only 3 months. That in itself is not entirely impossible, but if you look at the order book, it is extremely suspect. 

How to stay safe:

  • Be very careful of any new coins and follow the advice from the previous points to do additional research

5. Watch out for making assumptions

It's easy to make assumptions and it can easily backfire. Here are some assumptions to watch out for:

  • Assuming it won't happen to you - always always always do your research, no matter how convincing your friend sounds.
  • Assuming that a coin will turn eventually - some coins are going to die and not come back.

6. Malware and Viruses

More malware and viruses are produced every day. These can do anything from locking you out of your computer and demanding money (Ransomware) or it could steal your personal information and access accounts that could ultimately lead in actual cash or crypto being stolen from you. 

How to stay safe:

  • Make sure you use a good anti-virus program. Don't use a FREE one. Spend the money and opt for a good paid option.
  • Install an anti-malware program like Malware Bytes.
  • Consider switching to Linux, which is generally considered to be harder to hack than Windows.

7. Ponzi Schemes

Ponzi schemes or pyramid schemes offer high returns for a small initial investment. There is also a strong emphasis on recruiting new members because the initial investors are paid with the investments from new recruits and so on.

How to stay safe:

  • Start by understanding what a ponzi scheme is - this will help you identify a ponzi as and when it comes your way
 
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