What is the SAFU?
During unscheduled maintenance, Changpeng Zhao (CZ), the Binance CEO, tweeted out to users saying "Funds are safe."
After this, the phrase “Funds are safe” became regularly used by CZ to ensure users were aware that their funds were, in fact, safe. SAFU was probably a typo on Twitter which immediately became the preferred choice for "safety" in the crypto world.
Crypto is like the wild west and scammers are cooking up more ways to scam unsuspecting investors out of their hard-earned money.
In this guide, we will show you the most common scams and how to spot and avoid them.
We will start with 3 important tips followed by a list of common scam contributed by our community
No coin listing website, influencer or celebrity endorsement can ensure that the project is 100% not a scam.
Even the most famous rug pull event, Squid Token was listed on popular Coin listing sites and also publicised by the media before the project owners ran away with some $3.3million in funds.
Your best chance of lowering your risk of being rug-pulled is making sure the following:
Don't FOMO into any project just because you see a parabolic chart, as long as you don't lose all your money, there are always great opportunities out there that can give you the same killer returns.
The best scams work by tapping on our greed and creating immense fear of missing out, if you see a project that sounds too good to be true, 9/10 times you will lose money.
You can easily start your research from the project's community
Would you give someone your credit card details? No right?
It's the same in crypto.
Never, ever give anyone your secret phrase.
This is so important that we have to repeat it again. Never, ever give anyone your secret phrase.
Your secret phrase in the unique 12-word Secret Backup Phrase and can be used to restore your wallet on any device.
There is no blockchain application out there that requires your secret phrase to work.
Administrator of projects will never need your secret phrase or ask you to connect your wallet.
Even if you see tokens airdropped to your wallet by projects, never attempt to connect to their website because many users have their funds can be stolen that way.
How can you prevent your wallet from being compromised?
It is literally impossible not to receive a "Support Text" from a scammer after joining a crypto telegram/discord group.
These scammers will often ask you for your seed phrase or ask you to connect your wallet to a fake phishing site in a roundabout way.
The scammers are getting smarter with their gimmicks every time, these scam baits could come in the form of a "free" airdrop or scare you by saying your wallet is compromised and you will lose all your tokens unless you connect to a website to re-sync your wallet.
Unfortunately, many beginners will lose their hard-earned money this way.
If you notice in most telegram or discord groups, the administrators or moderators will clearly state ( even in their bio ) that they will never DM you, this is to prevent any sort of misunderstanding because the scammer can copy the moderator's profile exactly down to the profile picture.
Most people start with Google when they want to find an official website for a crypto project, however scammers are getting smarter and using blackhat search engine optimisation techniques, they can trick google into ranking their website on the number one result.
These techniques can usually last for days before google's algorithm catches on and if you are one of the unlucky few to search during this window period, you might land up on the fake website instead.
There is no way to tell a fake website from a real website because all the styling can be copied completely.
The best way is to get the website link from reputable directories such as Coinmarketcap, Coingecko or Wherecrypto.
Crypto users may also use the search function on discord or telegram to find the project's group and scammers know that.
That is why almost all successful projects have many fake telegram groups that ask you to connect to their website, some of these telegram groups have even more members than the real group.
There are also fake mobiles apps.
Some mobiles app promise you staking or mining rewards with your device.
While others are phishing apps for popular crypto applications such as ( Wallets or Coin discovery Applications )
Always make sure to get the official application download link from the official website.
A honeypot is a scam contract where you can buy into a project but you cannot sell.
It is very hard to determine if a project is a honeypot even by looking at the charts because the scammers can whitelist several wallet addresses for selling to make the price chart look more realistic.
The best way is to AVOID projects that do not look legitimate or make sure to always buy a small sum first and try to sell before investing a larger amount.
Some scam projects go even further to complete tax all your investment the moment you buy.
This means that you will not receive any tokens after "Swapping" your precious stablecoins for the project's token.
Again make sure to only invest in legitimate projects or invest a smaller amount to test the waters first.
A rug pull is where crypto developers abandon a project and run away with investors' funds usually by dumping the entire team's token or pulling out the liquidity of the project.
This is harder to catch unlike contract scams because it's like musical chairs where everything looks exciting and price only goes up until the developer decides to pull the plug and run.
Some tell-tale signs of a rug pull through the unsustainable marketing activities of a project. Rug pulls are a quick cash grab and the developers would definitely want to exhaust any method to make people buy their tokens so that they can scam a larger amount before anyone discovers the scam.
Pump and dump signal groups are very common in crypto where a group owner tells a group for the next token that they are going to "pump" up and then the members rush to buy into the project hoping that they can sell for a much higher price and not end up being the last one.
Unknown to the group members is that the owners have already bought into the project and will dump on them once the price hits their target.
If you are in any project's community, you can easily do your part by spreading the word and making this article a pinned post in your telegram/discord group so that any newcomers will not have their precious tokens taken away from their wallets.
