In 2021 crypto scammers took a total of $14 billion and since October 2021 crypto scams have increased by 1000%. Unfortunately, due to the rise in prominence of crypto in the last few years and increased coverage in the news, many people have got in to it with a certain level of naivety. It’s easy to see adverts and influencers talking about how much money they are making from it, in the same way that they do for get rich quick schemes but you don’t hear about the tens of thousands of people who lose money.

Know The Risks With Crypto Before Getting Started

As was touched on above, it is important to know what you are getting in to and what to expect from a cryptocurrency investment as well as which trading sites are legitimate with a solid reputation. Crypto trading is a high risk investment so for most people they should only use expendable income, meaning, only invest what you can afford to lose in the same way that you might do in a casino. Crypto markets aren’t tied to economies, currencies or sales, there is no way of predicting how a crypto currency will react beyond popularity, stability and if a large country/corporation decides to start accepting it as a valid form of currency. Crypto markets tend to react in a volatile way, as you will have seen recently with Etherium and Bitcoin, the values absolutely plummeted and the more negative headlines it gets the worse it gets. As a casual investor buying in to it at this point is the best thing you can do, when it is at rock bottom.

Popular Scams & What To Watch Out For

One of the major flaws in the crypto market is that it is very unregulated when compared with banks, anybody could start up their own wallet similar to the popular sites like Coinbase or Kraken and start allowing people to trade cryptocurrency on there. These site owners charge a commission for each trade to make money and also hold any cryptocurrency that is in a persons wallet. There have been many examples of Ponzi schemes in recent years where owners have taken peoples money and then used other customers money to pay another customer to ensure they have the money to withdraw, eventually though if enough people want to take money out there will be no money left and you can end up with nothing – it wont be covered by the government either in the same way that £85,000 of your money is protected in a high street bank.

Aside from the trading and wallet sites, there is also the currencies themselves that you need to be wary of, recently a ‘Squid Game’ scam took place where a new SQUID currency was released alongside a VR immersive game. Cashing in on Squid Game’s popularity lots of people bought in to this and the price rocketed and then the creators disappeared with $3m of peoples money.

What to do if you are the victim of a crypto scam

Due to a massive increase in the number of crypto scams, there are now dedicated investment fraud lawyers to try and help you regain some, if not all of your funds. Always make sure when you are trading or if you have any issues to keep all communication, whether it be via email or screenshots from live chat as well as screenshots of any trades in case a site should go down, this will make your case much stronger and give you a higher likelihood of success should it go wrong.

By lalae