Nine Lessons To Spot a digital assets Scam

Posted on March 20, 2020 in Articles, Digital Assets 101, Opinions
Nine Lessons To Spot a digital assets Scam
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2019 was a massive year for digital assets scams. Ever since digital assets has become popular, people have been trying to engage in various digital assets exchanges to earn some profit via digital assets trading. But there have been many fraudulent actions which led to many users losing more than what they invested.

According to a report by CipherTrace, around $4.26 billion has been stolen from various digital assets exchanges, investors, and also users. A popular Japanese digital assets exchange BITpoint lost a total of $28 million, and they had to repay around 50,00 of their customers.

The popular stolen digital assets coins were Bitcoin, Litecoin, XRP, and Ethereum. A popular digital assets exchange Binance reported being robbed of $40 million in Bitcoin. Not only have the fraudsters stolen 7,000 Bitcoins, but they also have various two-factor authentication codes and API tokens.

digital assets is very volatile, and many trading platforms available today aren’t established well enough. Many exchanges don’t provide any insurance, so you may lose all your money. Therefore, before you start trading or investing research exchanges and find out who offers insurance (we will give you a tip, there aren’t many – Zipmex is one of the only exchanges globally who provide such a service).

One has to be vigilant when dealing with digital assets so to help you out we have constructed a list of nine giveaways to spot a digital assets scam.

Nine lessons to Spot a digital assets Scam

Fake ICOs or Whitepaper

ICOs or initial coin offerings help to gain some initial investment to set up the digital assets. They are fundraising techniques for a new digital assets. Over the last few years, investors have been pouring money to more than 1000 ICOs.

Many ICOs are legitimate, but they are new to this business and have no prior experience. Since there are numerous investors for digital assets, fraudulent ICOs also get away with their digital assets scam. Fake ICOs also tend to have a fabricated white paper. Their white papers may be cloned from an existing white paper and may look far less original.

Before you go around investing in any ICO, you can research more about the team and their white paper. You can copy-paste the white paper content into Google and verify whether there are any matches.

Unregulated Exchanges

Various exchanges make it difficult to withdraw money once you invest in them. They charge massive commissions, and you may lose a lot of funds. Investors and users should be aware of such exchanges that guarantee high profits and various promotions.

Before you enrol yourself in any digital assets exchange, you need to go through the terms and conditions carefully.

Fraud Wallets

Multiple digital assets wallets in the market can hold your digital assets coins. But not all are legitimate. Since there is a rise in digital assets scams, there has been a rise in fraudulent wallets that claim to hold your coins, but the moment you load your balance, you might lose everything.

Always try to use legitimate wallets even if they charge a fee for registration.

Bitcoin Trading

Bitcoin is one of the top digital assets in the market and one of the standard coins involved in a digital assets scam. Various exchanges offer bitcoin trading, but investing is more accessible than withdrawing.

Bitcoin is highly volatile, and the exchanges take quite some time, and within this window, all your profits can vanish. Always be vigilant about bitcoin trading and keep analyzing the market status.


Phishing is one of the oldest tricks in the book. Many cybercriminals can imitate popular exchanges, and they aim to steal your login credentials. In some cases, it is tough to detect such impersonation.

There have been reports of various impersonations of company officials and CEOs offering multiple promotions and luring users. This is commonly called a multi-vector attack. It combines social engineering, phishing, and even cold-calling.

You can research the team or even have contact with someone on the inside.

Social Media

Social media is a platform to verify the credentials of various officials of the digital assets team. But it is also a platform for fraudulent traders and scammers to impersonate legitimate traders.

To counter this, you can stay away from personal messages regarding digital assets promotions and offers.

Spam Emails

You should never click on any link about digital assets promotions or offers. The emails may seem legitimate, but you’d rather avoid them than lose all your money. Phishing is a common internet scam, and you should not fall prey to it.

Pump & Dump

Pump & Dump mechanism is the method of inflating the stock of one commodity and then selling it to earn high profit. In this scam, they use popular social media platforms such as Facebook, Telegram or Twitter.

They form a vast community and start looking for a digital assets with the highest scamming capability. Then buy the coin at a low price and help to inflate its value and then sell high.


Since digital assets trading is complex and has a lot of users involved in it, there is an increase in the number of digital assets scams. These brokers can approach you via emails or social media.

Never trust anyone online, especially with such scammers and frauds on the loose.

Not all digital assets has been well established, and not all digital assets trading platforms offer insurance to protect you from hacks. Even though Bitcoin is at the top of the digital assets game, it is highly volatile. Every second or every minute, the value of the digital assets coins change. If you ever start digital assets trading, make sure you understand what you are doing. There is an age-old saying don’t invest in something you don’t understand. The same can be said for using exchanges. Do your research before using an exchange.

Every day various websites and forums update their list of fraudulent digital assets exchanges or digital assets scams. Instead of diving headfirst into any investment, read and research online. It might save you from a hack or being scammed. The high-profit nature of ICOs and digital assets exchanges attract many users and investors, but even they can be fraudulent. So exercise caution and do your homework.