28 Jun 2022
How To Keep Your Funds Safe
Many people who start out in Crypto, think they are smart enough not to get drawn into a scam. But some crypto scams are clever, sure having a high IQ will navigate many of the less sophisticated scams. But generally, the higher the IQ the lower the EQ, which means you might be vulnerable to emotional scams such as Romance scamming and social engineering. We have seen people we trust highly, people we know would never usually associate with criminality, be coerced into supporting unlicensed brokers. The scams come from everywhere, having a high IQ alone won’t protect you, only knowledge and educating yourself against the fraudulent activities will keep you safe.
This article is actually a collaboration. Many of us from the anti-scam community are coming together to talk about strategies and keeping people safe, we don’t get paid to do this, we do it because we have the knowledge that you need. We do it because we care, we do it because we know the feeling of having funds frozen and otherwise stolen.
The anti-fraud community is growing, with experts in different fields from Crypto, Forex, Arbitrage NFT and we also have a blockchain security expert as well and more people are joining the community each week. There are bad people in this space, but, take heart, there are good people here as well. So it just comes down to a good vs evil, however, if you adopt these simple rules, you stand a good chance of keeping safe.
This article is aimed at people who are new to Crypto trading because these are the people who are most vulnerable from the vultures that just want to fraud you. Remember the fraudster vultures are always circling and they love fresh meat.
Never Invest In Someone Who Direct Messages You On ANY Social Media Platform.
Know your crook. A simple but important standard to adopt. Many of us from the Anti-Fraud community adopt the simple rule that we will never DM first. Why? Because if someone DMs you, they usually have a motive, they want to sell you something. Bear in mind here this isn’t like walking into a shop and purchasing an item where you can see the shopkeeper in front of you. You don’t know who you are talking to unless the person is prepared to facetime with you, there is no way of knowing who this person is, no matter how real they seem to you. We have seen evidence of men being seduced by romance scammers pretending to be women.
Often, many of us from the Anti-Fraud community will keep people talking just to find out which platform they want to sell us so we can check it and add it to our lists if the platform doesn’t have the required audits and KYC.
Is The Platform KYCd?
What is a KYC. Know Your Customer. The KYC process is a process of identification whereby a 3rd party will check a developers credentials, ID etc to ensure the person is who they say they are. This is important because if you give your money to someone, you need to make them accountable. However, this is where it becomes a bit of a minefield, because some companies offering KYC are also in on the scam. Therefore, the only KYC product we trust, is the SEEK KYC. Because SEEK continues to monitor who they have certified, and if they act illegally, the guilty parties' details are released to the authorities, it's that simple. No other KYC product offers this level of security.
Is The Platform Audited?
Another important step, there are some good auditors out there and some scam ones too. Certik immediately jump to my mind. But, just because there is a Certik audit badge on their website, it doesn’t mean the audit has passed. In some cases we found the audit partners but we couldn’t find the project listed. In other cases projects have been audited and failed. Don’t assume anything.
SEEK also offers an audit service and again, if the platform has a SEEK Audit shield this is a really positive indication.
The Smart Contract/Public Wallet.
Recently one of our clients had been contacted and asked if he wanted to join a mining platform offering great returns. …”It is totally safe, because the funds are secure in your wallet”. I asked him if he checked the smart contract? He told me he had not signed anything. (No joke he actually said that.)
The smart contract is the point of vulnerability here because the mining certificate is what gives the platform access to the wallet. Your wallet! You can use coinsniffer to check the developer wallet. If the developer hasn’t even made his wallet public, this is a major red flag. The smart contract can have malicious code that gives a developer 2-way access to your wallet, this can drain your wallet.
HLT recently checked a platform we suspected, we started asking the project manager if we could check the smart contract. The same night, many wallets were emptied. (We reported the platform to the authorities along with all the material we amassed.)
Tokenomics is another important factor when considering a platform or token to put your funds into. Project liquidity sounds like a heavy subject, but the truth is it isn’t, not in the Crypto world. Any project whether it be staking, farming, a new token or all three. Liquidity is vital, because in mining liquidity pools you are essentially earning dividends so there needs to be project liquidity to allow access to the blockchain for the creation of a mining node or nodes.
To see what a project should look like, go to www.seektoken.net here you will note that the project wallet is public so the smart contract can be checked. Here you will also see the KYC process and many other vetted projects.
Set Your Standards
As the owner of a Trading company, it is a little easier to consider how the company interacts with the trading world. For example, we frequently receive pitches from various investment platforms. We therefore encourage the agent to prove their legitimacy. We advise the agent that HLT Ltd has high company standards as to who we are prepared to accept as an investment product, and before any business partnerships can take place the agent will need to meet these standards.
As an individual, you can adopt the exact same standards. Remember that the principle is still the same, they want your funds, what are you prepared to accept. A risky project with a good ROI or a safe platform with a lower ROI. I guarantee that the safe platform with a lower ROI will be more profitable because it will be around much longer and it wont swallow your deposits.
Adopting standards is the first step to keeping your funds safe, the second step is using your freshly obtained knowledge and putting it into practice. By following these simple checks, you have a good chance of staying clear from the vultures and thieves. Adopt these pillars as your standard of what you are prepared to accept and tell the agent what your standards are. We have placed warnings on our website and business social media feeds That HLT Ltd will not consider any platform without a SEEK KYC. In the forex market, HLT will not accept any unlicensed broker to affiliate with, and neither should you.
Remember, it's our money, and if the developer wants to get their hands on it, then they have to prove legitimacy and not hide behind a fake social media account.
So the next time someone directly messages you and wants you to invest in a platform, remember your standards, and if those standards are based on the four pillars discussed in this article, you have every chance of keeping your funds safe.
For further in depth knowledge I recommend you also check our friends at KYC Alliance.
For an in-depth look at how these scams technically function. I highly recommend checking out the following link from our friend at KYC, this is an authoritative compendium of how the scams work, and it is often a reference point HLT Ltd use.