7 Signs Your Cryptocurrency Investment Might Be a Scam
Recent media coverage of cryptocurrencies has showcased incredible stories of people making substantial returns by investing early in emerging coins. With endorsements from celebrities like Elon Musk, it's no surprise that both interest and fraud in cryptocurrency are on the rise. The complexity of the market and the lack of experience among many investors make it easier for scammers to deceive people into parting with their money. To help you stay alert, here are seven key signs that your cryptocurrency investment could be a scam. Remember, not all of these signs need to be present for it to be fraudulent.
1. You Found the Opportunity Through Social Media or a Cold Call
Fraudulent schemes often come to you via social media, unexpected calls, or even fake celebrity endorsements. Be cautious of unsolicited messages or articles that seem to promote investment opportunities. If you engage with these, you may find yourself targeted by persistent scammers.
2. You Were Encouraged to "Start Small"
Scammers often suggest starting with a small investment, like £200 or £250, to test the waters. They may make your investment seem successful by showing fake returns, even sending a small profit back to you to build trust. However, everything is fabricated, and they will use elaborate stories to persuade you to invest more.
3. The Opportunity Seems Too Good to Be True
If someone claims to have inside knowledge about a highly profitable coin, ask yourself why they are sharing it with you. If I had a secret investment that guaranteed huge returns, I would keep it to myself and profit from it rather than sharing it with a stranger. Many successful investors simply bought coins early and held onto them.
4. You're Asked to Transfer Funds to a Different Wallet
If someone instructs you to set up a wallet and send money to theirs, be wary! Once you do, it's nearly impossible to recover your funds through these unregulated platforms. Remember, legitimate platforms like Kraken and Coinbase won't ask you to transfer money this way.
5. You're Asked for Remote Access to Your Device
This is a major red flag. No legitimate broker would request remote access to your device. This tactic allows scammers to manipulate your view and hide any warnings while guiding you through a confusing process.
6. You've Been Told to Send Screenshots of Your Transfers
If a broker asks for screenshots, it's not for security purposes. They need to confirm that you've sent money to their fake platform before they show it as "available" in your account.
7. You're Asked to Pay Withdrawal Fees or Taxes
Scammers often try to extract more money by claiming you need to pay fees or taxes before you can withdraw your funds. These charges usually come as a surprise, and paying them will only lead to new demands for more fees.
How Can I Protect Myself from Investment Scams?
Here are some tips to help safeguard your investments:
- If someone asks you to create a wallet to send them cryptocurrency, it's likely a scam.
- Never transfer your cryptocurrency to someone else's account.
- Understand that the crypto market is volatile; no one can guarantee returns.
- Be cautious if anyone asks for remote access to your device.
- Avoid paying taxes or fees that can't be deducted from your returns.
What Should I Do If I've Lost Money to an Investment Scam?
If you've been a victim of an investment scam, Refundus can assist you in recovering your funds from your bank. Fill out our fraud claim form for a free consultation. Our fee is 15% plus VAT on anything we recover, and there's no charge if we're not successful. For larger claims, our fee is capped at £10,000 plus VAT. You can also pursue your case independently, free of charge! For guidance on how to secure a refund, refer to our bank transfer refund guide.