The growth of the cryptocurrency market means that more and more cyber scammers are launching their currencies to catch the unsuspecting. How to keep you
Marcelo (43) is a frequent user of cryptocurrency. To do this, it uses different non-custodial networks and various networks, such as Ethereum, Binance Smart Chain (BSC), Polygon, Avalanche and Optimistic, among others.
A few days ago, he was amazed to see that a new BSC network card had been added to his list, without him having purchased or requested a transfer. Not only that: the equivalent of $4000 in a new currency called $GPTC, which features ChatGPT, a service that is all the rage today.
Inspired by this “given from heaven”, he set out to convert those assets to USDT: he entered the Pancake Swap decent exchange and paid the gas debt (commission) in BNB, the country’s token BSC.
However, his $USDT and $GPTC accounts remained unchanged, while his BNB account had been decommissioned. He was one of the many gullible people who fell for this gas scam (commission scam): the smart currency contract does nothing but charge a discount and he could have stolen everything he had in his wallet.
Cryptocurrencies: how crypto “viruses” work
A non-custodial wallet allows direct access to the block using a private key (multi-character alphanumeric string) or a seed phrase (12-24 word sequence).
These data are encrypted, written on paper and kept in a safe place, because if they are lost or forgotten, the money will be lost and there will be no way to recover them.
In this they differ from exchanges, which provide a username and password that can be retrieved as with any other Internet service. In this case, they open the vault for the user and have the keys available so that it can be easily operated from their interface.
Non-custodial coats preserve the privacy of identities and do not associate them with money. In addition, in decentralized trading you can buy tokens that start at just hundreds and benefit from the increase in value when they are listed on central exchanges (like Binance or Coinbase). If this happens.
“The user with the wallet of his custody has full control over the private keys and is responsible for the security of his assets,” warn iProUP from Metamask, one of the expressions used of this type, which proposes the following analogy:
- “A custodial exchange is a payment like a bank that is trusted to keep safe deposits.”
- “A personal wallet is like a personal safe that the user has and is responsible for maintaining.”
Nahuel Burbarch, the Argentine representative of the Zerion wallet, warned iProUP “to receive goods that have never heard of or participated in, is a great sign that we are against the spam code possible.”
“Before they meet each other, it is useful to investigate them specifically, ticker, or smart contracts on the block explorers such as Etherscan, indexing platforms such as Coinmarketcap or CoinGecko and Twitter” said experts.
Santiago Cristóbal, founder of the Solow platform, tells iProUP that “it is a rule to distrust any gift received and absolutely avoid dealing with unknown goods.”
Pain contracts have some unwanted features, such as wallet access
“If the coin appears to be from a known purpose, what I recommend is to first go to the official Twitter account to find out if it was indeed a gift and then to consult with the people who are in the ecosystem,” he says.
The problem here is more serious than buying a card (junk currency) that can’t be worth anything over time.
Ethereum and networks imitating how it works (such as Chain, Polygon, Solana, Arbiter, and others) offer captive contracts that allow you to program activities on the blockchain. In this way, anyone with some knowledge can create a new code with specific rules that will be followed in the event of certain events.
In the case of $GPTC, your smart contract is designed not only to keep the commission that has been paid (savers have lost several hundred dollars) without offering any exchange: the accepted thing, an unwary user can access your funds. and will lose all signs. Kind of “crypto”.
Cryptocurrencies: How to protect yourself from scams?
Before we invest, experts recommend a lot of DYOR (an acronym in English for “do your own research”) in the strategy in which the money is based. The main tool is indexers such as CoinMarketCap or Coingecko, which offer – in addition to the current and historical prices – various data to start the search.
Those with significant funds can keep them in a wallet disconnected from the internet to prevent hacking
The first is the simplest of all: the comments of the users themselves, which will tell if their sentiment is bull or unscrupulous (indocile), but above all they will report if it is a scam. “I think the most important thing to consider is to understand what the plan is: how it works, does it make sense or is it a real application,” advises Burbach.
Cristóbal adds that “it is vital to see how long it has been in the market and has a presence on social networks, especially on Twitter. Although the accounts are artificially inflated, a greater presence and seniority usually indicate gravity.”
So, when he searches for a coin on CoinMarketCap, he can see the official website. If it doesn’t, that’s a red flag to watch out for. Or if he does not offer a white paper with access, there is a document of some kind of “constitution”, in which the project, objectives etc.
In addition, Cristóbal recommends tracking specific information that is usually found on the site of each project:
- Take a look at the project and vision roadmap
- If the founders are anonymous, there is more risk of a scam.
- Check if they have great partners
- Check the latest releases or improvements of the project
Similarly, on CoinMarketCap you can view other vital points:
- That the smart contract is verified (usually indicated by the logo of a crypto audit firm)
- The volume that has been carried out in the last three months
Burbarch highlights that he does not trust “some parameters of CoinMarketCap or CoinGecko that can be manipulated by the market, such as uncials, but a joint analysis of all the data provided by these platforms.”
Educate yourself and research: those who want to invest need to know how crypto-currencies work and learn about each purpose
According to the expert, “another point is to analyze the liquidity in decentralized markets like Uniswap, Sushiswap or Balancer, among others”, which will indicate how easy it will be to remove things, in addition to “verifying that when the tokens are traded”.
Even non-custodial wallets provide tools to avoid these scams. “One is to block user interaction with known malicious domains. MetaMask manages this list and many collaborators in updating the ecosystem,” they point out from the app, adding that they have received complaints from 11,512 people to refer to 33,478 domains.
“We are working together with PhishFort, which uses the block list that MetaMask uses, and we are investigating ways to include proactive anti-phishing measures. We have recently disabled the use of an old signature tool to complete asset theft.”
In the case of Zerion, Burbach indicates that he has “a secret filtering formula to indicate the signals in the application. Since there is no 100 infallible filter, any thing can be reported by users and based on this, we proceed to develop it.”.
“We have a verification system for each purpose: if the cryptocurrency is found in two or more signs.org, it receives a blue overview indicating that the information has been prepared by the correct entity, even if the investment plan does not work”, hxc.
Metamask from Metamask recommends connecting “to an external hardware wallet to provide greater security for people who store significant amounts of money by keeping their private keys physically separate from devices connected to the Internet.”
On the other hand, Burbach notes that “there is a tendency to find a greater number of spam in networks in the network such as BSC or Polygon costs, although it is equal to all those looking for an investment objective.”
In this sense, Cristóbal states that it would be best to invest in Bitcoin and Ethereum, and then explore others as you learn about the subject. As always, education is the key to protecting your personal finances in a “safe” way.