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March 11, 2022

5 Key Tips to Keep Your Crypto Safe


Crypto, NFTs and web3 provide countless new opportunities to investors, artists and businesses. However, with many users new to the space and billions of dollars pouring in, so are scammers. 

It’s estimated that in 2021, $7.8bn dollars in crypto was stolen by criminals. Due to the decentralized nature of crypto, there is no bank or authority you can call to claim your money back in case you’ve been scammed, so it’s extremely important to be careful.

Below are a few of the most common scams and top tips to keep your funds safe.

1. Never share your seed phrase

Rule no. 1 - never, ever share your seed phrase. The seed phrase is a secret phrase that acts as a recovery tool that can be used in case you lose access to your wallet. This means, of course, that if scammers get access to your seed phrase, they can access your wallet from their device and steal your funds.

The most common way hackers try to steal your seed phrase is by pretending to represent customer support of wallet services such as MetaMask. They might contact you via email or social media (often after you’ve posted that you’re having trouble with the services) and pretend they need the seed phrase to help you out. Legitimate customer service staff will never ask for your seed phrase. 


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2. Always verify the domain name


Phishing scams are one of the most common types of scams. Criminals send you a genuine-looking email or message, asking you to click a link to. However, the link will usually direct you to a fraudulent site. Traditionally, scammers would ask you to log in and enter your password on the fake website, which they would then use to steal funds; in the crypto world, attackers would typically ask you to connect your wallet and sign a malicious smart contract, such as what happened in the recent OpenSea scam losing users $1.7M.


Always carefully check the domain name on a project’s official social media accounts or prior communications, as scammers typically use the same name but a different extension (e.g. .io instead of .com) or a small variation in spelling (e.g. using a “-” in the name, changing a letter). Do note that subdomains (e.g. project.joinkoia.com) are legitimate and can’t be accessed by hackers unless the main domain name system settings have been compromised, in which case they could use the main website. 


While you might think such a “basic” scam could never happen to you, even some very experienced crypto users have (almost) fallen for such scams! In this thread Twitter user @thomasg.eth, who owns $125M in ETH, describes an elaborate scam, which could have been spotted by verifying the correct domain name. 


3. Do not trust Discord Direct Messages (DMs)


Discord is a great tool to chat with people in the same NFT projects, but it’s also full of frauds. Often when you enter a project’s Discord server, you’ll get a direct message from a user who carries a similar name to the Discord Server and looks like an admin of the server. Typically, the person will send you an official looking message saying that the NFT sale has now started, with a link to the sale. More often than not, these links contain fake NFT collections, copying the original one. You should not click on or buy from links you get in DMs, but instead should rely on links in the official public Discord channels of the project.  


NOTE: Koia team members will never send you a DM. If someone claims to represent Koia, do not trust them, and report them to the team. 

4. Have multiple wallets and understand their security implications



Once you start accumulating more crypto, it makes sense to have multiple wallets, with one wallet being a hardware wallet that can’t be accessed online. A hardware wallet is a physical device that allows you to store your crypto “offline” and access it via a password. The wallet can’t be accessed from an online source and if your physical device gets stolen a thief still needs your password to access the wallet (and if this happens, you do have an option to get a new hardware wallet and recover your funds with the seed phrase). The reason why a hardware wallet is more secure than an online wallet, is because the hardware wallet’s private key is stored on the device. Browser wallets, while generally secure, ares more susceptible to attacks and viruses because they are connected to the internet.


Never buy a second-hand hardware wallet. These devices could have been tampered with and leave you exposed. Companies such as Ledger will verify your wallet is authentic as part of the setup process.

Guidelines by crypto educator @dame.eth

5. Preventing Rug Pulls


If you’re just getting started with NFTs and crypto, never put in more than you are willing to lose and stick to trusted projects. 

A type of scam that requires more due diligence on your part are called “rug pulls”, where crypto developers present an exciting project, such as a coin that is going up by 1,000% quickly. Users put in their money, and the project owners walk away never to be heard from again.  

You could, of course, decide to avoid these types of “high risk” projects altogether, but at the same time you might be interested in taking a bet on these “high risk” projects with a chance to cash in big. A few things to look out for:

  • The team behind the project. While not all anonymous projects are scams, most scams are anonymous projects.
  • Suspicious price increases in price. A price going up with valid reason (e.g. a partnership announcement or Elon Musk tweeting about it) doesn’t need to be a cause for concern, but a price going insane without reason could point to a “pump-and-dump”
  • Trading volumes, liquidity and holders. Check the coins’ trading volume, whether liquidity is locked and whether there is no concentration of the coin with a few holders. More info on these points here.

Take into account these basic security tips to keep your crypto safe and enjoy all the possibilities crypto can give you access to.

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At Koia, we allow you to buy, trade and collect fractions of iconic assets, starting from $60. Our experts make sure to source and buy the best assets, and we take care of authentication, storage and insurance. All of the benefits, with none of the hassle.

The articles and information made available on Koia are provided for information and educational purposes only and do not constitute financial advice. You are advised to consult with an independent financial advisor for advice on your specific circumstances.