I regularly invest in cryptocurrency. I'm aware of the risks involved, but I'm still worried about getting scammed. I've recently been approached by a few people who are claiming to be from a new cryptocurrency exchange. They're offering me a guaranteed return on my investment if I sign up with them. I'm tempted to take the risk, but I'm also having second thoughts. What should I do?
– Priya Sharma (Bihar)
I understand your dilemma. Cryptocurrency is a new and exciting asset class, but it's important to be aware of the risks involved. One of the biggest risks is fraud. Today there are a lot of cryptocurrency scammers who are always coming up with new ways to steal people's money, and they're especially targeting young people who may be new to the space.
Table of contents [Show]
Here are some red flags to watch out for:
Promises of guaranteed returns
No investment can guarantee future returns, and cryptocurrency is no exception. If someone is promising you guaranteed returns on your investment, it's a scam.
Pressure to invest quickly
Scammers will often try to pressure you to invest quickly, without giving you time to do your research. They may tell you that the opportunity is limited-time or that you'll miss out on big profits if you don't invest now.
Requests for personal information
Scammers may ask for personal information, such as your Aadhar card number or bank account number, in order to "verify" your identity or "process" your investment. Never give out this information to anyone you don't trust.
Unsolicited investment advice
Scammers may reach out and try to contact you via email, social media, or even phone calls with unsolicited investment advice. Be suspicious or wary of anyone who tries to sell you something that you didn't ask for.
Unregistered or unlicensed investment platforms
Only invest on registered and licensed investment platforms. You can check the SEBI (Securities and Exchange Board of India) website to see if an investment platform is registered.
“If you see any of these red flags, it's best to walk away. Don't give anyone your money unless you're absolutely sure it's a legitimate investment,” says Vijay Gurav, a regular investor in cryptocurrency. He adds, “Do your research. Before you invest in any cryptocurrency, take the time to learn about the project and the team behind it. Read the white paper, join the community forum, and follow the project on social media. This will help you keep up to date about red flags and fraud schemes.”
Here are some additional tips to help you stay safe from cryptocurrency fraud
Only invest so much money that you can afford to lose
Cryptocurrency is a volatile asset class, so it's important to only invest an amount that you are okay with losing.
Use a secure wallet
Store your cryptocurrency in a secure place such as an online wallet, which is alike having a hardware wallet.
Only share your cryptocurrency information with people you trust.
Report scams
If you think you've been scammed, report it to the authorities and to the cryptocurrency platform where you invested.
