Crypto safety first: Recognize and prevent scams in the world of digital currency

The world of cryptocurrency is exciting, innovative, and full of opportunities. But like any financial sector, it unfortunately also attracts individuals and groups who try to exploit others’ inexperience or enthusiasm. At Knaken, we place great importance on the safety of our users. That’s why in this blog post, we’ll guide you through the world of crypto scams: what they look like, how they work, and most importantly, how you can protect yourself.

What are the most common crypto scams?
The crypto space features a wide range of scams. Here are a few of the most common types:

Phishing Scams
– How it works: Scammers create fake websites, emails, or social media profiles that closely resemble those of legitimate crypto exchanges (like Knaken), wallet providers, or well-known projects. They try to lure you into clicking a link and entering your login details, private keys, or other personal info.
– How to spot it: Look for oddities in the URL (e.g., knaken-login.com instead of the official site), spelling errors, unprofessional design, or email addresses that are slightly off. Be especially wary of emails that create a sense of urgency (e.g., “Your account will be blocked unless you log in immediately!”).
– Prevention: Never click on links in emails or messages blindly. Type web addresses manually in your browser. Use bookmarks for key websites. Knaken will never ask for your password or private keys via unsolicited email or DM.

Ponzi & Pyramid Schemes
– How it works: These schemes promise extremely high, guaranteed returns. New investors fund the returns of earlier ones. When the influx of new money stops, the scheme collapses, and most people lose their money.
– How to spot it: Promises of unrealistically high and guaranteed profits, pressure to bring in new members quickly, and lack of transparency about how returns are actually generated.
– Prevention: If it sounds too good to be true, it probably is. Stay skeptical of get-rich-quick claims.

Pump and Dump
– How it works: A group agrees to mass-buy a specific (usually unknown and cheap) coin to artificially inflate the price (“pump”). They hype it on social media to attract others. Once the price peaks, they sell all at once (“dump”), causing the price to crash and leaving latecomers with worthless coins.
– How to spot it: Sudden extreme price spikes of unknown coins, hyped messages on social media from anonymous accounts, and pressure to buy quickly before the “rocket takes off.”
– Prevention: Be cautious with coins being hyped without a clear fundamental reason. Always do your own research.

Fake ICOs (Initial Coin Offerings) / Token Sales
– How it works: Scammers create convincing-looking websites and whitepapers for non-existent projects and offer “tokens” in a presale. Once they raise enough money, they disappear.
– How to spot it: Anonymous or unverifiable team members, vague or copied whitepapers, and no clear roadmap or tech explanation.
– Prevention: Research the team thoroughly. Check if there’s a working product or prototype. Be extra cautious with promise-heavy projects.

Malware and Hacking
– How it works: Malware is spread through fake apps, downloads, or email attachments. It can steal login details, record keystrokes (keyloggers), or take over your wallet.
– How to spot it: Unrequested software updates, sketchy downloads, or strange behavior on your computer/phone.
– Prevention: Only download software from official sources. Use a reliable antivirus. Be cautious with attachments or links from unknown senders.

Your Crypto Safety Checklist: 7 Golden Rules

1. Talk about it & report suspicious activity: If you’re unsure about something, ask trusted sources or the community. Notice suspicious activity involving Knaken or our users? Report it to our customer service immediately.
2. Keep your Private Keys and Recovery Phrase offline: These are the keys to your crypto. Never share them and store them in secure, offline locations. Write them on paper and store them in multiple secret places.
3. Use Passkeys: For your Knaken account, use your unique Passkey. It allows you to log in using biometrics — making it impossible for anyone else to access your account.
4. Always enable Two-Factor Authentication (2FA): Prefer authenticator apps (like Google Authenticator or Authy) over SMS-based 2FA, as SMS can be intercepted (SIM swapping).
5. Do Your Own Research (DYOR): Don’t believe everything you see online. Research projects, teams, and technologies before investing. Rely on trusted sources.
6. Be extra cautious with links and attachments: Don’t click on links blindly. Check the URL and sender. Avoid opening attachments from emails you don’t trust.
7. Don’t fall for “too good to be true” promises: Guaranteed high returns with no risk? That’s a major red flag.

Knaken’s Commitment to Your Safety

At Knaken, we take security extremely seriously. We implement advanced measures to protect our platform and your funds. For example, we recently introduced Passkeys — a more secure and user-friendly way to log in without traditional passwords.

Conclusion

The crypto world offers fantastic opportunities, but staying alert and informed is key. By recognizing the signs of scams and taking proactive steps to protect yourself, you can navigate this space with confidence. Remember: your knowledge and caution are your strongest defense.

Do you have questions or concerns about your account security? Contact Knaken Support.