3 ways entrepreneurs can identify & avoid red flags

ART 05 3 ways entrepreneurs can identify avoid red flags

Ways to prevent entrepreneurs from falling victim to scammers over the emergence of digital assets 

More than 81 million investors created Bitcoin wallets this month. However, as digital assets skyrocket, so do scammers. Nowadays, many on-chain companies lose funds to “investors” offering company capital growth.

Scammers also stay up to date with business trends to offer promising benefits in their schemes. For example, only two months ago, OpenSea, the world’s largest NFT marketplace, lost $1.7 million in an alleged phishing scam, causing trading volume to go down by 70% that month. 

As a recourse, President Biden signed an executive order for Congress to examine the risks and benefits of cryptocurrencies. Cryptocurrency platforms can also explore more proactive options.

REV3AL offers multifaceted and multilayered authentication systems to ensure successful trades. The blockchain and non-blockchain patented technology verify the ownership of digital assets, NFTs, and digital documents. 

Ways to help steer clear of tech-savvy swindlers

Enable two-factor authentication (2FA) 

Implementing 2FA adds unique personal protection measures such as a generated code, facial recognition, or fingerprint scanning. 2FA adds an almost impenetrable security layer to protected devices, crypto wallets, and accounts. 

Hide the seed phrase

Marketplaces such as MetaMask provide customers with a ‘Secret Recovery Phrase.’ The phrase should be kept safely offline, out of the reach of scammers. 

Know current crypto scams

Crypto scams are usually sneaky twists on existing cryptocurrencies. Scammers favor entrepreneurs using crypto to send funds.  

If something appears too good to be true, it most probably is. So instead of believing information at face value, investigate every crypto scheme on legitimate trading sites such as OpenSea and Marketplace before investing. 

Popular scams you should know

Rug pull scams 

Nearly $3 billion was lost over rug pull scams last year. The “rug pull” persists when a startup or business owner spreads news of an NFT, DAO, or crypto-token and runs off with the cash before updating or handing over the project. These projects often claim celebrity involvement or launch on creditable platforms for further appeal.

The “Squid Game” rugpull immediately comes to mind. Riding the wave of the famous Korean series, scam developers carted $3.3 million after selling a fraudulent fan token to public investors. 

Phishing scams

Aka technical support scams, these schemes target email or bank login credentials to retrieve crypto wallets. Scammers impersonate help desk representatives to access crypto wallets before draining the assets they hold.  

For your safety, never provide sensitive information to anyone making unsolicited contact. If a call or email feels suspicious, please double-check all information before proceeding. 

Double, triple, or even quadruple-checked website URLs – phishing scams tend to copy the URL of trustworthy sites, sneakily swapping letters and numbers for the hoax to appear ‘legit.’ 

Investment scams

Most scams begin with an incredulous sales pitch where their company or project is the “next big thing!” 

Beware of pyramid scams where fraudsters advertise recruiting people into a program as the BEST way to get paid in crypto. It is always a trail of broken promises targeting new unsuspecting people. 

Another common scheme involves “investment managers” offering to grow company capital. Then, they ask owners to hand over the capital to set up an investment account out of the victim’s control. 

Extra fees are not legitimate investments! While fees are standard to deposit, trade, and withdraw tokens, fraudsters often convince victims to pay more to earn extra returns before ghosting them.

What’s the solution? 

Businesses and entrepreneurs should first implement personal protection strategies before setting up international trade lines. Forward-looking enterprises can explore REV3AL technology’s solution to handle the basic precautions and detect scams. 

If every company used REV3AL to check digital asset ownership, the blockchain space would be safer. However, it takes industry-wide responsibility to put scammers out of business. You can always refer to the information in this article to help you steer clear of scams, cons, and fraudsters.

Related News

Hot Stories

Web3 goes to school in India: Algorand announces game-changing partnerships
TRON DAO Establishes Artificial Intelligence Development Fund
NYU takes the leap into the future of education with Web3 and NEAR
ChainLink price analysis: LINK obtains bullish momentum at $7.2
Dubai bans privacy tokens: what you need to know

Follow Us

Industry News

Web3 goes to school in India: Algorand announces game-changing partnerships
NYU takes the leap into the future of education with Web3 and NEAR
Nokia advances remote work via metaverse tech
Uniswap DAO Votes to Deploy V3 on Binance Smart Chain (BSC)
Kazakhstan president signs law to cap power consumption of crypto-mining

Add Your Heading Text Here