Invest
5 ways to reduce your risk in crypto
Investing in cryptocurrencies is risky enough without the involvement of scammers.

5 ways to reduce your risk in crypto
Investing in cryptocurrencies is risky enough without the involvement of scammers.

With cryptocurrency scams on the rise, there are a few tried-and-tested tactics that investors can rely on to mitigate their risk profile.
Cointree CEO Shane Stevenson said that no amount of security on the part of financial institutions could make up for inadequate personal security.
“COVID-19 has seen an upswing in scam activity in the cryptocurrency markets, with ASIC reporting a sharp increase in reports from consumers about losing money in crypto-asset scams,” Mr Stevenson said.
The growing value of digital assets like bitcoin and ethereum means that the costs of getting it wrong have never been higher.
“The unfortunate truth is that very little can be done to control the risk of poor personal security practices,” he admitted.
Rather than overcome complex and comprehensive security systems, the goal of most scams is to trick potential victims into giving up the protection those systems offer.
“If the scam works, criminals will be able to bypass almost any security measure, not just those of financial systems,” Mr Stevenson warned.
For those looking to remain one step ahead of scammers, there are a few cyber hygiene habits that should be considered.
Both regulators and crypto-finance experts advocate for the taking of precautionary measures, such as two-factor authentication.
Another step that those looking to reduce their risk in crypto should take is keeping on top of the latest scams.
“It is important to stay up to date with the latest scams and follow a few security guidelines that can help prevent you from falling victim to a scammer,” Mr Stevenson said.
He pointed to an idiom familiar to most: if something sounds too good to be true, it probably isn’t.
“Never send cryptocurrency to an untrusted destination and avoid anyone promising high returns if you give them your cryptocurrency,” he recommended.
According to him, one of the biggest mistakes you can make is sharing your account credentials around.
“Be wary of anyone asking for account information online or over the phone or anyone inquiring about your identification,” Mr Stevenson explained.
As the value of digital assets has surged, scammers have become increasingly sophisticated.
Mr Stevenson warned that scammers would use any method at their disposal to gain access to cryptocurrency, “whether that be impersonating a government authority, a known financial institution or exchange, or even a potential love interest”.
To minimise your risk, he recommended watching out for fraudulent websites and only ever rely on legitimate and established trading platforms with a good reputation.
Despite this rising threat, legitimate cryptocurrency exchanges, like their traditional finance counterparts, are some of the most secure platforms out there.
“So long as members practice good security discipline and do not share their access with anyone, then digital assets can be held and traded safely,” Mr Stevenson said.
About the author

About the author


Cryptocurrency
New Cosmos ETF offers access to ethereum
Cosmos Asset Management has launched another crypto ETF in Australia. ...Read more

Cryptocurrency
1 in 9 Australians have purchased crypto in the last year
A consumer group has released new data into crypto-assets. ...Read more

Cryptocurrency
CBA hits pause on in-app crypto tool
CBA has paused the rollout of in-app cryptocurrency trading. ...Read more

Cryptocurrency
European Central Bank president says crypto is ‘worth nothing’
European Central Bank president Christine Lagarde has shared her views on the value of crypto and the importance of regulation. ...Read more

Cryptocurrency
Will ‘cryptogeddon’ follow the stablecoin crash?
The collapse of TerraUSD last week sent the crypto market into a panic, raising fears about broader financial implications. ...Read more

Cryptocurrency
UNSW receives largest known crypto donation to fund pandemic detection tool
UNSW Sydney has received the largest known cryptocurrency donation to an Australian higher education institution. ...Read more

Cryptocurrency
Three new crypto ETFs commence trading following setbacks
The new crypto-based ETFs have been launched on the Cboe Exchange. ...Read more

Cryptocurrency
Consumers spending more through crypto-linked payment options
Cryptocurrency exchange Crypto.com said that spending via its crypto-linked card had increased, particularly on fashion, transportation, hotels and dining. ...Read more

Wrapping up an eventful 2021
Listen now

What Omicron means for property, and are units right for first-time buyers? What is equity crowdfunding? Are industry super funds tapping into member funds to save their skins?
Listen now

Will housing affordability improve in 2022? Will buy now, pay later become the norm? Why are Aussies staying in failing super products?
Listen now

Who really benefits from crypto ETFs? How will the RBA respond to rising inflation? Could a mandate help address unpaid super?
Listen now

Cryptocurrency
New Cosmos ETF offers access to ethereum
Cosmos Asset Management has launched another crypto ETF in Australia. ...Read more

Cryptocurrency
1 in 9 Australians have purchased crypto in the last year
A consumer group has released new data into crypto-assets. ...Read more

Cryptocurrency
CBA hits pause on in-app crypto tool
CBA has paused the rollout of in-app cryptocurrency trading. ...Read more

Cryptocurrency
European Central Bank president says crypto is ‘worth nothing’
European Central Bank president Christine Lagarde has shared her views on the value of crypto and the importance of regulation. ...Read more

Cryptocurrency
Will ‘cryptogeddon’ follow the stablecoin crash?
The collapse of TerraUSD last week sent the crypto market into a panic, raising fears about broader financial implications. ...Read more

Cryptocurrency
UNSW receives largest known crypto donation to fund pandemic detection tool
UNSW Sydney has received the largest known cryptocurrency donation to an Australian higher education institution. ...Read more

Cryptocurrency
Three new crypto ETFs commence trading following setbacks
The new crypto-based ETFs have been launched on the Cboe Exchange. ...Read more

Cryptocurrency
Consumers spending more through crypto-linked payment options
Cryptocurrency exchange Crypto.com said that spending via its crypto-linked card had increased, particularly on fashion, transportation, hotels and dining. ...Read more