How to identify and avoid crypto scams

Every investor or non-investor is a target for fraudsters who want to make some easy profits by exploiting such individuals who can do anything to get rich instantly.

Cryptocurrency price volatility has been wild in recent days with Squid game-based coin SQUID, Kokoswap, Ethereum meta rising thousands of percentage points in a matter of hours. Investors have been trapped as well, with several tokens falling sharply.

Shashi Prakash Jha, Head of Legal and Compliance at WazirX, said, “Crypto has gone mainstream, and while we are experiencing increased participation from youth, retail and corporate investors, we are looking forward to more opportunities to come when trading in high-risk assets. Class. Every investor or non-investor is a target for fraudsters who want to make some easy profits by exploiting individuals who can do anything to get rich instantly.”

An easy way to identify whether a token is a scam or not is to see if the investment scheme is promising unrealistic returns within a short period of time.

“Another way to identify scam tokens is if scammers promising to give crypto giveaways ask investors to send them some coins for address verification. Another way is to hack or social media of famous personalities. Cheating the handle, promising to immediately double the crypto sent,” Jha said.

In addition, it is very important to invest after you have done due diligence on a project, see their whitepaper, (that follows your Clients and Anti-Money Laundering guidelines), the background of the founders and the quality and reputation of the exchange from making their investment. Customer support infrastructure first.

Currently, India does not mandate any specific AML/CFT norms for crypto exchanges. However, all stakeholders voluntarily follow the C recommendation on VASP. The Exchanges also engage with both State, Central and International agencies in sharing and establishing international best practices on AML/CFT.