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Kimberly Rosales explains how to avoid cryptocurrency scams

There are plenty of financial scams around, including in the cryptocurrency space, and Kimberly Rosales offers best practices to avoid them.

Québec, Canada – WEBWIRE

Recently Netflix, through its documentary “Trust No One: The Hunt for the Crypto King,” addressed one of the events that hit the cryptocurrency world hard between 2018 and 2019. In that period, the Canadian exchange Quadriga publicly stated that it would not be able to pay the $190 million in investments of its customers, because its founder and sole holder of the passwords of its “digital wallets,” Gerald Cotten, passed away in December 2018. Kimberly Rodriguez knows the risks that exist in this space, and that is why she has used her experience in cryptocurrencies to explain how to avoid falling victim to countless scams today.

Cotten’s case, besides raising doubts about the veracity of his death, shows how this man managed to manipulate and sustain a fortune based on deception and excessive trust on the part of his investors. That is why today, in the midst of a context of economic variations and inflationary trends worldwide, the search for new income and investment instruments (that generate greater profitability) seems to attract more and more of the attention of people.

This being the case, Rosales explained how these pyramid scam mechanisms operate, linked to investment in cryptocurrencies, which, like any other industry or market, respond fraudulently to the high expectations of their customers and the search for new investment opportunities. In this sense, Rosales pointed out that, although investment in cryptocurrencies is usually safe due to its traceability and difficulty to hack, “usually scams occur due to misuse or delivery of personal information or trust in unrecognized platforms in the market.”

Therefore, the risks associated with this type of digital investment can be classified according to different criteria. First, it is mandatory not to provide personal data to an entity or person who contacts us without having requested it: either through an email, a text message or social networks, etc.

Rosales stresses that fraudsters can even impersonate friends and contacts through social networks, email and even WhatsApp. “If you created an account on an exchange platform to buy cryptocurrencies, always activate the two-factor authentication and any other security suggestions given by the platform,” she adds.

Always rule out any investment “opportunities” that require upfront payment, exorbitant short-term rents, or seeking out friends or colleagues. Never use unofficial app stores or websites. Always verify the web address you are entering to avoid phishing.

“It is of utmost importance to never give out private keys on web pages, unknown people, support services, or public portals,” suggests Rosales. “Most important of all: always look for ways to have your cryptocurrencies in your own digital wallet.”

Rosales also referred to the most common types and avenues of scams and frauds that will allow you to be alert regarding the different “investment offers” that hide varied scam formats, where many times the support changes, but the mode of operation remains. Therefore, Rosales explains that there are from Ponzi Schemes, fraudulent applications, false testimonials, and success stories of celebrities to Phishing/implantation, where a request for payment in cryptocurrencies is falsified, looking like a legitimate source of such request as it is a credit card provider.

Ponzi scheme is a type of investment pyramid scheme where victims are tricked into investing in a non-existent company or “get-rich-quick scheme,” which in reality does nothing more than line the scammer’s pocket. Cryptocurrencies are ideal for this, as scammers are always inventing new “cutting-edge” technologies to lure investors and generate higher virtual profits. Falsifying data is easy when the currency is virtual.

“Pyramid schemes, as the name suggests, build block pyramid systems, where the participants themselves must make it grow through the creation of a network in which they recruit new participants with the objective that the new ones produce profits for the original participants. These types of systems tend to go bankrupt as soon as not enough new investors come in for the company to be able to pay the promised profits,” explains Rosales.

The expert points out that these descriptions correspond to the most common way of operating around cryptocurrencies. However, in any case, the existence of more and new scam modalities is not ruled out, so it is always suggested to verify the source, not to trust the addressee, and an evaluation and own investigation to protect our funds and assets.

About Kimberly Rosales

Kimberly Rosales is an entrepreneur and tech aficionado who, early on, understood the full capabilities cryptocurrency could offer. She founded ChainMyne, a FINTRAC-registered company, in 2020 as a means to offer an easier method for accessing digital currency, as well as to empower cryptocurrency holders. While the majority of her time is occupied by ensuring her business ventures constantly run smoothly, when she does have some free time, she enjoys spending time with her family and exploring new locations.

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 Kimberly Rosales

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