How to Smartly Invest in Crypto and Minimize Risks

Dodge the Scams and Ride the Gains: How to Smartly Invest in Crypto and Avoid Common Scamming Schemes

As the popularity and expansion of cryptocurrency investments continue to evolve and grow, not only the number of novice traders willing to learn how to smartly invest in crypto proceeds to increase, but also the incidence of fraudsters, who seek easy targets and take advantage of traders’ negligence and lack of experience in the field. Modern scamming schemes are becoming more sophisticated daily, and even advanced investors sometimes can fall victim to criminals disguised as legitimate crypto exchanges.

To protect your personal information and finances, as well as to avoid common traps, it is vital to educate yourself on the topic of how to smartly invest in crypto, types of fraudulent actions related to cryptocurrency exchanges and the ways to minimize the risks.

1. Disappearance with no traces: exit scams disguised as legitimate crypto exchanges
   An ‘exit scam’ is one of the most common current scamming strategies, when a crypto exchange operates as a robust platform, registering and attracting new users, educating on how to smartly invest in crypto, and even executing transactions for a defined duration. Yet, at some point, the governing body of the platform disappears without any traces and illegally seizes users’ money and/or assets stored on the platform. These schemes are devastating and particularly dangerous, as in the early phase, the platform tends to demonstrate stability, offering lower transaction commissions and attractive bonuses for new users.
   To avoid this scenario and learn how to smartly invest in crypto, always carefully check the reputation of the exchanges before you create a trading account. Analyze its history, read user reviews, as well as check relevant licenses and official registration. This does not necessarily mean that new emerging platforms cannot be trusted, you just have to be careful in your analysis and study background information whenever possible. New projects, such as Ellyx, have sophisticated security measures aimed at preventing possible scams even before the initial stage, and transparent policies that allow users to make sure that the provider is trustworthy and reliable.

2. Fake liquidity and trading volume manipulation Some crypto trading service providers are artificially increasing the trading volumes to convey the illusion of high liquidity and attract new traders. Typically, these platforms utilize fictitious transactions or bots, falsifying the figures and making the exchange more appealing to new potential clients. Consequently, users face difficulties when trying to withdraw funds, as the real liquidity turns out to be inconsistent with the advertised one. To avoid this type of fraud, traders must verify trading volume data through independent performance tracking platforms and compare the results with other crypto exchanges on the list. Platforms with inflated figures, sharp increases in transaction levels or unusual trading patterns are likely to inflate metrics for their profit.

3. Data theft through phishing sites and fake applications
   Phishing remains one of the most common tools used by fraudsters aiming to get access to trading accounts on exchange platforms. Perpetrators create fake duplicates of the crypto exchange platform websites, which are impossible to differentiate from the real ones and distribute links through emails, ads and even search engines. The scammers immediately gain access to the account and steal funds once the user enters the login information.
   A frequently encountered variation of phishing is fraudulent mobile apps that often tend to appear in official stores and pose as clients of real exchanges. After being installed, these applications transfer the passwords and logins to hackers, granting them unrestricted access to the victim's assets.
   To understand the principles of how to smartly invest in crypto and to safeguard against these threats, always double-check the URL before entering any personal data, use two-factor authentication and install applications only through official links on the provider’s website or a verified platform.

4. Forced funds liquidation: insider manipulation and fund freezing
   Some malicious exchanges utilize hidden account freezing mechanisms that enable them to hold back user funds on the grounds of technical issues, suspected fraudulent activity or the need for extra verification. The platform can block all crypto withdrawal transactions, especially if users uncover significant financial misconduct by the exchange. Moreover, the platforms can cancel deposits or manipulate balances in other ways, claiming unspecified updates or system bugs. In these cases, when learning how to smartly invest in crypto traders permanently lose funds, with no way of ever retaining them.
   To avoid these unfortunate situations, study the background of the platform beforehand and avoid exchanges with negative reviews regarding the withdrawal policies or complaints about frequent technical issues. Additionally, never store substantial amounts of your funds even on recommended crypto exchanges, and use cold storage or register on P2P platforms, such as Ellyx, to be in control of your finances.

5. The investment schemes trap and unrealistic bonuses
   Platforms can also use aggressive marketing strategies and offer attractive bonuses for new clients or investment plans with guaranteed profits. Frequently, these offers turn out to be Ponzi schemes, where old investors receive their dividends at the expense of new contributions. These schemes are never good for the long run, as when the client flow dries up, the platform closes, and the founders disappear with the finances.

The simplest rule if you want to know how to smartly invest in crypto and avoid these schemes: if the offer seems too good to be true, then it most likely is. Cryptocurrency trading is quite unpredictable, and no exchange will guarantee profits without a logical explanation of the source.

Being a newcomer in the crypto community and acquiring the ways of how to smartly invest in crypto sometimes can feel overwhelming and confusing. Illegal schemes in the crypto trading world are becoming more complex and elaborate. Gullible users seeking easy profit lose millions of dollars daily due to their ignorance. To protect your money, it is not enough to simply choose from a list of exchanges, it is important to continuously analyze the market, study the reputation of exchanges and watch out for red flags and warning signs of fraud.

By signing up with ellyx.com you are making a safe choice of a secure and reputable P2P service provider that opens trading possibilities and investment options. It is never too late to embark on the crypto journey, learn how to smartly invest in crypto and start making a profit from day one.