2. Tell me more — what are the most common ways to be tricked?

Exchanges, businesses, wallets and people that aren’t what they say they are.

For example, there might be a crypto exchange that looks like it offers fantastic rates and low fees on the trading fees you use the most. But, once you have made a deposit, it could be almost impossible to withdraw your funds. Another risk is entrusting your assets with a platform that has inadequate security measures in place. Just look at Mt. Gox — an astounding 850,000 BTC was lost all the way back in 2014, and those who were left out of pocket are still fighting to be reunited with their funds. Due diligence is essential — and even positive reviews found on crypto forums and social networks should be taken with a grain of salt.

Ponzi schemes are particularly disastrous because the number of victims can grow exponentially. Investors in these scams are normally under pressure to recruit as many others as possible to ensure that their profits rise. Indeed, they may even get a few payments to begin with — meaning those being duped often fully believe that they have stumbled across a real business opportunity. Ponzi schemes usually collapse when the pool of new recruits runs dry.

Phony crypto wallets are another issue. Apps posing as official wallets for NEO, Tether and MetaMask have been uncovered on the Google Play Store before now — and alarmingly, it seems they had hundreds of installs. The apps often requested a user’s private key and wallet password, sensitive personal data that would subsequently be used by cybercriminals to steal even more money. Other malicious pieces of software have piggybacked on reputable crypto wallet brands like Trezor.

Then, there are fake mainstream news articles and “official” social media pages that aim to capture crypto consumers who may have very little experience of the market. We’ve seen fraudulent investment opportunities that have claimed to have the endorsement of A-listers such as Elon Musk, Kate Winslet and Richard Branson — with Dutch billionaire John De Mol going as far to sue Facebook after the public lost an estimated $1.9 million falling for crypto ads that featured his image.

Facebook has even been a target itself, with fake pages on its social networks claiming to be official entities for the upcoming Libra cryptocurrency. They offered the chance for consumers to supposedly buy the stablecoin at heavily discounted prices, even though they hadn’t been launched.