Investing in cryptocurrency safely
• Think long and hard about investing in crypto before making any purchases. Be fully aware of the risks as well as the potential rewards. Always bear in mind that crypto assets are not anything like traditional money.
• Do thorough research before considering buying cryptocurrency, starting with online searches for background, ownership, reports and reviews on the company behind the product or service. Check that the company information on the website is clear in terms of the team members (including their background), source and level of financial backing to ensure that it doesn’t rely on your and others’ new investment (like a ponzi scheme), physical location and company registration details.
• Be aware that a company’s possession of – or application for – any kind of regulatory licence or membership of a trade body is no guarantee of your investment’s security.
• Ensure you are totally clear as to the conditions of your purchase and ownership:
• Can you easily remove your crypto assets from the platform?
• Is it clearly explained how the company secures and safeguards clients’ funds?
• Are clear descriptions of storing any type of asset quantifiable in the public domain?
• What does the crypto asset actually do? Make sure you understand the value that the token confers to the holder.
• Consider that unlike buying traditional currency or other assets, if you send your crypto to a scammer, you can’t contact your provider to recall your transaction as you would if you were using a credit card.
• Beware of aggressive and/or unrealistic marketing tactics such as repeated attempts to contact you across different channels, incentives to buy before a specific deadline, selling of products as bundles, minimum order levels, multi-level marketing where you are encouraged to recruit more people to participate, or promises of large returns and financial success. Cryptocurrency purchases should be driven by you and not an email, text, video, social media post or celebrity/influencer endorsement.
• Don’t attract attention by sharing on social media that you hold crypto or have bought it for the first time. Social engineering is a common practice for scammers and there are regular reports of promises of high returns if crypto is sent to an address. In almost every case, these funds are never returned to the owner.
• If something sounds too good to be true, it probably is.