Securing Your Coins and Tokens

Unscrupulous individuals take advantage of the rising popularity of cryptocurrency via scams in order to steal and make quick money. Learn some best practices to stay safe.

Posted on 20/07/2018

Securing Your Coins and Tokens


Cryptocurrency is a booming with industry and currently there are 28.5 bitcoin wallets worldwide. Two of the biggest coins in the market today (Bitcoin and Ethereum) has a combined market value of over $5.3 Billion US Dollars.


Unfortunately, unscrupulous individuals take advantage of the rising popularity of cryptocurrency via scams in order to steal and make quick money. Given that it is very difficult to recover lost or stolen coins, it is very important to invest wisely and to secure your personal information.


Here are some ways to secure your coins and tokens:


Check the sender's email address and the website before giving out any information


Any individual that has access to your private wallet key would have the ability to transfer your coins to any exchange or any other wallets. One of the biggest and most prevalent way scammers get hold of your private key is via phishing.


Phishings are normally done via email or via sponsored google links. Scammers would send you an email saying that you need to secure your account or wallet and that you need to click a link to verify your information. Once you have clicked the link, you are directed to a website that looks very similar to your wallet's or exchange's web page. 


Always check where the email is coming from. Normally, phishing emails use free email accounts like yahoo, hotmail or gmail but with the legit sounding username (ie coinbase_customersupport@gmail.com).


Another common phishing scam is through websites found in Google. Before you key in any personal info, be sure to check the website's URL to see if there is anything strange. Usually, scammers would add words or letters at the end of the url (ie cointrackingxyz.info).


Research. Research. Research.


A new study by the ICO advisory firm Statis Group showed that in 2017, close to 80% of ICOs were identified as scams - with 3 failed ICOs losing investors a total of $1.3 Billion US Dollars. Techcrunch also released a report showing that more than 1,000 crypto projects and more than 247 coins are considered dead as of 30th of June 2018.


It is important that you do research before you buy any coins or tokens or before you participate in any ICOs. A simple google search will go a long way in helping you decide whether an exchange or an ICO is a scam (try typing the name of the ICO or exchange + scam in Google to get the best results).


If the offer is too good to be true, then it probably is. Check whether the company is registered and whether you can the identify the owners and developers as scammers would normally remain anonymous.


Do not leave your coins in any exchange platform


From January to July of 2018, more than $700 million US Dollars have been stolen from cryptocurrency exchanges due to hacking.


It is understandable to leave your coins in an exchange platform as it it would be easier to trade if you always have coins on hand. However, this opens you the real possibility of losing your coins if your exchange is hacked. It is more prudent to keep your coins in your wallet and just transfer them once you are ready to trade.


Please ensure you are receiving the best advice, contact one of our crypto tax specialists.



Disclaimer
The material published electronically in this article is general in nature and does not constitute financial advice. We do not guarantee that the information is complete or correct. We do not accept any responsibility for loss or damage suffered by any person or body relying directly or indirectly on any information contained within this site.
We do not accept any liability for any financial decisions made on the basis of the information provided. We recommend you seek professional advice, and take into account your particular investment objectives, financial situation and individual needs before proceeding with any financial decisions.

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