Securing Your Bitcoin During the Holidays

For many, the holiday season is a time of giving and sharing with one another. But as the amount of people shopping, donating and sending gifts online grows during the season, so do the scams. And crypto is no exception. Bad actors often take advantage of the holidays to try and trick unsuspecting Bitcoin users out of their assets. Many of these scams look like legitimate offers or opportunities at first glance, but they can put your personal information and finances at risk.

If you use a self-custodied wallet (such as Leather) to secure your bitcoin, then you are ultimately the one responsible for safeguarding your assets. A big key to keeping your bitcoin safe is education. In this post, we’ll talk about the most common crypto scams that rear their heads during the holidays, how to recognize them and what steps you can take to protect yourself. 

The Most Common Kinds of Scams

With each technological advance, scammers come up with new and creative ways to target unsuspecting users. That said, there are some common types of crypto-related attacks that vigilant users can spot – some of which are particularly prevalent during the holiday season. These include:

• Phishing - One of the most common crypto scams is phishing, which involves tricking users into telling someone their private keys. In a phishing scenario, the scammer often pretends to be someone known to the victim or another legitimate entity to gain their trust. Once they’ve acquired the information they need, the scammer will directly steal crypto from the victim. Many phishing scams target wallets, which is part of the reason crypto users need to be informed about how to best protect their assets.
  
  

• Giveaways - In a giveaway scam, attackers often use social media. They’ll either hack or impersonate a prominent account and post offers to “give” crypto to people for free – if they just follow X, Y and Z steps. Many times, these scams require you to send a specific amount of coins to an address, with a promise you’ll receive something in return. Once you’ve sent the crypto to that address, it’s gone forever.
  
  

• Last-Minute Deals - The holiday season is a popular time for “last-minute deals,” where scammers promise you a great gift option for anyone you’ve left late on your shopping list. These schemes can take various forms, but they work primarily by putting you under pressure to act quickly. They often include short deadlines, hoping you’ll fall for it before having time to investigate the offer further.
  
  

• Investment Schemes - In these scams, someone will reach out to you with an investment opportunity that promises incredible returns. The process typically starts by having you send a certain amount of crypto to them or downloading an app. Often, these scammers have legitimate-looking social media accounts and even websites to make them convincing. Once you’ve sent the money, however, you won’t see those returns. Often you’ll be unable to withdraw your money or only be able to do so if you pay a large fee. These bad actors, similar to those in the category above, often try to pressure you to make a decision without having time to look into their claims.
  
  

• “Pump-and-Dump” - The crypto market has seen its fair share of “pump-and-dump” scams, in which a person or group buys into a thinly traded coin with a low price point. Once in, they begin pushing the coin – sometimes with contrived data – to convince others to invest. As others buy in, the price climbs. The scammers then sell their assets (often a substantial percentage) to incoming buyers, cashing out and generally tanking the price.
  
  

• Bogus Charities - Another regular scheme to keep an eye out for during the holidays is bogus charities. Scammers prey on the knowledge that many charitable groups solicit donations at this time of the year. If you see a so-called charity asking you to donate cryptocurrency, especially through an unsolicited link or ad, be sure to vet the information. Would-be donors should always take the additional steps of verifying that the organization they think they are donating to is real and that the way they plan to donate is legitimate.

Recognizing Scams: What To Watch Out For

While cryptocurrency and decentralization differ in many ways from traditional finance, the warning signs for fraud are not all that different. Self-custodied wallets are only as secure as the users themselves – if you give a bad actor your private keys, they may be able to access your crypto. If you are unsure whether an opportunity is legitimate, there are some common red flags to watch out for.

One of those is offers for free money. Let’s face it: there are very few people who actually give away money for nothing. If you see an ad or post on social media promising you free crypto, be cautious. Never allow yourself to feel pressured into downloading things, clicking links or sending money right away in order to get a “deal.” It’s important to vet any offer you see online before taking action.

Another common warning sign is typos or grammatical errors. Most legitimate businesses will take the time to edit and correct their copy. Any ad, article, social media post or website that’s riddled with typos should raise internal alarm bells. This is particularly true for any relevant licenses or certifications the business might have.

Then there are suspicious endorsements. A common scam tactic is to try and create an air of legitimacy by faking endorsements. This can involve anything from creating a fake image of a celebrity endorsing something to using a real photo but putting it on a fake article or ad. Many times, the scammer will use a reputable media outlet’s name on the falsified document. If you are ever wondering if an endorsement is real, go directly to the alleged source and try to find that post yourself. If it’s not on there, that’s a red flag.

How To Protect Yourself From Bitcoin Scams

Choosing the right wallet is crucial to protecting your bitcoin. But that’s a lot easier to do if you understand some of the basics about how wallets work. There are hardware wallets (also known as “cold” wallets), which are external devices that store your private keys offline. There are also software wallets (known as “hot” wallets). These come in several formats, such as desktop, mobile, or online. They are generally always connected to the internet.

Then there is the question of custodial versus non-custodial wallets. If you have a custodial crypto wallet, then a third-party – such as an exchange – holds your private keys. While you don’t have to worry about losing them, you do need to worry about data breaches or other security issues. For this reason, many users opt for self-custodied wallets, such as Leather. With these wallets, you are the one safeguarding your private keys. This allows for greater control, but also more responsibility.

To avoid endangering your assets, you need to make sure you’re using a reputable crypto wallet, and you need to avoid sharing your private keys with others. Ensuring that your information is not easily accessible to others is the most important thing you can do to avoid getting scammed. This, combined with doing research into posts you see online, staying alert for any of the patterns listed in this article and not being pressured to send money or information to unknown entities will help you keep your currencies safe this winter.

Conclusion

The holidays are a popular time for scammers looking to pull one over on the unsuspecting precisely because they know so many people are conducting transactions online. Whether it’s a fake investment opportunity, a so-called giveaway or another scheme, these attackers are able to prey on others due to a lack of knowledge.

You are ultimately responsible for the safety of your assets when using a self-custodied wallet, so it’s crucial to regularly learn more about recognizing common scams and protecting yourself from them. When in doubt, crypto users should keep the famous adage in mind: if something seems too good to be true, it probably is.

Connect to web3 applications built on Bitcoin with the Leather browser extension. Install Leather – the only wallet you need to tap into the multilayered Bitcoin economy – today.