Here’s a common scenario. You read that the price of Bitcoin went up 10% last night and see commentary suggesting that we are just now at the start of another bull run. Not wanting to miss the boat like you did back in 2017, you look for a way to get in the market. The next day you happen to receive a call from a “financial advisor” offering to help you set up an account with an exchange and give you some “inside” trading tips. Not wanting to get duped you quickly look up his firm’s website and read some testimonials.
You decide it looks safe enough, so why not see if you can become crypto rich? What’s the worst that could happen?
Unfortunately, Kraken fields calls every week from aggrieved individuals that trusted the wrong people when they started investing in crypto and lost everything. Why? They did not perform proper due diligence on these advisors and let visions of crypto riches crowd their better judgment.
Crypto is exhilarating, but not without its bad actors, and it is important to be safe. This article will walk you through one of the most common scams that we see and give you tips on how to not only identify a fraudster, but stay off their radar in the first place.
Please note that Kraken has a global 24/7/365 support team, and we are here to help. If you are contacted by someone saying they will help you set up your account, be cautious of this person. Verify the request with our support team before proceeding by creating a support ticket.
Look Before you Jump
Many people see investing in crypto as a way to achieve their financial goals. However, the industry remains a black box for many, and the education curve is steep. In such a situation, interested investors have only two options:
- Dive headfirst down the crypto rabbit hole, reading every white paper and book in existence
- Look for a trusted advisor or third party that can help set up a wallet, create exchange accounts, and devise a trading strategy
For many, strategy #2 makes a lot of sense. It accelerates the learning curve and helps investors “get in early.” Unfortunately, because crypto is such a novel industry, few brokerages offer crypto trading. This creates a gap between the supply and demand for such services, and scammers are stepping into this vacuum to steal from unsuspecting individuals.
Don’t let this happen to you.
Identify the Tell-Tale Signs of the Confidence Man
Fraudsters will go to great lengths to disguise themselves as a dependable entity that should be trusted with your money. In fact, they often share a set of common characteristics:
First contact often comes via phone, email or social media with promises of return on investment or to offer you trading advice.
- Scammers tend to be excellent salespeople and will likely attempt to befriend and flatter you with compliments to create a false sense of security.
- They are financially knowledgeable and very articulate.
- They will have high-quality websites with testimonials and materials that are hard to distinguish from the real thing.
- They may try to gain your trust by sending a small cryptocurrency deposit to your Kraken account as proof of return on investment. The hope is that this small return will convince you to trust them with even more of your money.
The scammer may even try to convince you that they are affiliated with Kraken by impersonating a support agent or claiming to partner with us.
- To add credence to this claim, they may offer to assist you with setting up your account, placing trades and withdrawing the funds to their “platform/investment” website – NEVER DO THIS.
- If you are unfamiliar with the industry or do not have a Kraken account, the scammers may even request for you to install Remote Access software, which is a program where you hand the scammer total and live control of your computer (see below) – NEVER DO THIS.
Verify Everything that They Say
Scammers can be VERY convincing. However, there are some steps you can take to lower the likelihood that you become their next victim.
- Keep reminding yourself, if it seems too good to be true, it is probably a scam.
- Do your own research! Don’t trust what any advisor/broker says about the market or a particular asset. Also, do not blindly trust them when they say they work with a company such as Kraken.
- If you are concerned about the legitimacy of a website you can look for other signs of a legitimate digital footprint (LinkedIn, Twitter, Telegram). Also, do not hesitate to contact the dedicated financial regulatory body in either your country or the one in which the firm is domiciled to see if it has the proper licenses and registrations.
- Stay off the radar by not tweeting about cryptocurrency price movements or highlighting financial challenges . Scammers like to target individuals in emotional distress, when their decision-making is sub-optimal. Here is what NOT to do:
Don’t put all your eggs in one basket. You likely do not keep all of your money in one place, the same rule applies for crypto.
Never…(even if they seem trustworthy)
- Let someone else create a Kraken or other crypto exchange account for you
- Share your Kraken or exchange account credentials with anyone
- Allow uninvited access to your devices via Remote Desktop Access software
- Send your identity documents to an unverified company or individual
- Kraken will never ask you for your username. Keep your username secret
- Kraken will never ask you for your passwords. Never give out your passwords to anyone who asks
- Kraken will never request access to your devices via Remote Desktop Access software
We Are Here to Help
Kraken has a global 24/7/365 support team, and we are here to help. If you are contacted by someone saying they will help you set up your account, be cautious of this person. Verify the request with our support team before proceeding by creating a support ticket.
How Do I Report a Scam/Scammer?
You should always be suspicious of any website, organization, or “investment manager/advisor/broker” claiming to be affiliated with Kraken or wanting you to use Kraken to move funds to their platform/website.
If you have fallen victim to a scam or suspect a scammer is in contact with you, please submit a support request providing as many details as possible with regards to your concern.
Thank you for choosing Kraken, the secure and trusted digital asset exchange.
The Kraken Team
P.S. Have you tried the Kraken Pro mobile app yet?
Download the Kraken Pro App from the App Store or Google Play: