Security Tips For Setting Up A Crypto Wallet  

Back Up Your Wallet

When setting up your crypto wallet, one of the most important security measures that everyone should abide by is to back up your crypto wallet. Many people forget to do this and then later, once they have forgotten it, they can’t access any of their digital assets as they can’t be accessed without it. 

Backing up a crypto wallet is a very simple process. All it involves is you writing down your 12-24 word recovery phrase. It is essential that you write this down and put it in a safe place. Do not put this in any digital format, or take a screenshot or photo as these can easily be hacked. Many wallets will ask you for a username and password and others will require you to save a file to open your wallet. So before you start investing, ensure you are setting up your crypto wallet correctly and back up the recovery phrase. 

Securely Store Your Recovery 

When setting up your crypto wallet, it is essential to back up your recovery phrase, which you should have already done. The next step is to secure your recovery phrase properly. When you store your recovery phrase after setting up your crypto wallet, the most important thing to remember is not to store this in any digital format as these can malfunction as well as being hacked. It may be tempting to have it in a note app or in your emails but this will lead to your phrase being compromised. 

Once you have written down your recovery phrase, you need to place this somewhere secure. If you have a safe, this is a great option as it won’t get lost or damaged. Wherever you put this piece of paper, you need to ensure nobody else can get to it.  So when you have finished setting up your crypto wallet, ensure that your recovery phrase is safe. 

Never Share Your Recovery Phrase

After setting up your crypto wallet and once you have written down your recovery phrase offline, it is essential that you do not share your recovery phrase with anyone at all. This even means legitimate employees of crypto websites, crypto wallets or even support teams. If there is one major rule in the crypto world, it’s that you do not share your recovery phrase after setting up your crypto wallet. No legitimate person will ever ask for your recovery phrase. If anyone asks for your recovery phrase, it is 100% a scam. 

If hackers get hold of your recovery phrase, they can duplicate this and create a copy of your wallet and withdraw all of your funds so after setting up your crypto wallet, remember not to give your recovery phrase to anyone. 

Avoid Downloading Malicious Files or Clicking on Phishing links 

Finally, after setting up your crypto wallet, you need to make sure that you are not clicking on any links or downloading files from random senders as this can help to protect yourself from crypto-stealing malware. If you do click on a malicious link accidentally or unknowingly, then the hacker will be able to access your wallet remotely and steal your details and private keys which will, in turn, result in them emptying your wallet. To prevent this further, it is worth installing anti-malware and anti-virus software to catch any attempts. 

If there is one thing to remember when setting up your crypto wallet is that you should always write down your recovery phrase and don’t let anyone know it or where it is. This is for your eyes only. Never keep a picture of it as this is giving hackers a chance for fraudulent activity.    

If you believe you may have been the victim of a crypto scam, then please contact us today to arrange a free consultation to see if we can help you recover lost funds. 

With cryptocurrency only increasing in popularity and scams becoming more and more commonplace, let’s take a look at the mysteries surrounding The Hunt For The Crypto King and what lessons you can learn from the new crime documentary.

Who Was Gerry Cotten? 

Gerry Cotten was a Bitcoin investor from Canada who founded Quadriga CX – the cryptocurrency trading platform – in 2013. In just a few short years, the platform became the biggest of its kind in Canada. In 2016, just a year before Cryptocurrency launched into the mainstream, Gerry took over as sole director. This then resulted in a huge increase in investor interest, some sources say around $1billion went through the company in 2017, but Quadriga soon ran into financial difficulties. 

What Happened To The Crypto King?

As explored in The Hunt For The Crypto King, in 2018 interest in Bitcoin dropped massively. This then led to a number of Quadriga CX customers rushing to withdraw their funds and get their money back. Some investors who held Bitcoin with other investors also transferred their Cryptocurrency to Quadriga CX as, at the time, they could make some money by doing so. But, those who requested their funds back never received it. 

At the same time, Gerry Cotten got married and, whilst on his honeymoon in India, he passed away at the age of 30 from complications of Crohn’s Disease. This sudden news came as a huge shock in the industry, but it also left a lot of questions unanswered, especially for investors who were still waiting on their investment funds to be returned. 

Why Was His Death Surrounded By Controversy? 

When ‘The Crypto King’ died, he was the only person who held the ‘keys’ to Quadriga CX’s wallet, as he had never shared the passwords with anyone else. At the time, there was around $250million in Cryptocurrency that was owned by around 115,000 customers, which was basically unretrievable.

Shortly after the announcement of Gerry’s death, the Quadriga website went offline for ‘maintenance’ and then, soon after, the company was declared bankrupt, meaning that customers had no way of getting their money back. In The Hunt For The Crypto King documentary, some investors stated that they believe Gerry Cotten is still alive and staged his death as a way to defraud customers and get out of repaying them their money. 

There are also some suspicious details that investors were unsure of following his death. In the days before his death, Cotten changed his will and instructed that everything be left to his wife, including a $9.6million estate and a $100,000 trust fund to look after his dogs. Upon his death, his death certificate was found to be misspelt and signed off by police in India with no objection and his body was quickly returned to Canada.

His death wasn’t announced for around a month, but investors later found out on the company website, rather than directly or with any information on what this meant for their funds. The company soon declared bankruptcy, with around $215.7million in liabilities and $28million in assets. 

How Did This Affect Investors?

Shortly after Quadrigo announced bankruptcy, investors who were owed money began investigating the suspicious circumstances. It soon emerged that Cotten and his previous business partner Patryn had a series of connections to Ponzi schemes, also known as pyramid schemes. During this scheme, it was found that ‘The Crypto King’ Gerry Cotten would transfer millions from other investors’ accounts as a way of affording his luxury lifestyle. The accounting firm Ernst and Young discovered this in 2019 when investigating on behalf of concerned investors. 

Shortly after, the Ontario Securities Commission determined that Quadrigo was a scam pyramid scheme and in their report, said that “whether they were aware of it or not, Quadrigo’s clients were exposed to risks beyond fluctuations in crypto asset prices when they chose to trade on the platform”. 

It was found that Cotten took advantage of investors and treated their assets as personal funds which he would spend, use and trade at his own will. He eventually depleted those assets to such an extent that this then took down the company. Although there is no evidence that Cotten is still alive, it is widely believed that he faked his own death to get out of returning funds. 

How To Spot Signs Of Cryptocurrency Scams

Whilst there are a number of legitimate Cryptocurrency trading platforms, there are unfortunately a growing amount of crypto scams similar to that of The Crypto King that are causing investors to lose money. Fortunately, it is becoming increasingly more clear to spot signs of cryptocurrency scams, which can include:

• Being advised how to trade
• Assured a guaranteed profit or return on investment
• Being put under pressure to make a deposit
• Being asked to pay a fee or invest more money 

If you recognise any of these signs, then you may have been the victim of a Cryptocurrency scam. Please contact us today for a free consultation where we can look into ways to recover your trading losses.

Scams are everywhere, and in the crypto world, this is no different. If you get caught out and invest in the wrong opportunity, you can lose a lot of money and, the worst part is that it is not always protected. It can be difficult to know how to spot a crypto scam, so in our latest blog post, we will look into how to spot a crypto scam so you don’t lose all of your investment funds. 

The Promise of High or Guaranteed Returns

Many scammers will promise the world so you invest your money with them, so it is incredibly important that you do your research and see whether their offer seems too good to be true. This is one of the best ways of how to spot a crypto scam, especially if you are a new trader. An example of this would be a scammer promising to make a 1500% return on your investment which would be amazing, but in reality, this is just not realistic. 

To know how to spot a crypto scam of this type is pretty easy, as most scammers will provide fake promises of their returns without any strategy and will often give little to no information on how they are achieving these returns. An ICO is an initial coin offering where they are offering a discount rate, but this will increase dramatically. Now you know how to spot a crypto scam of this type, you need to steer away from it. 

Lots of Promotional or Marketing Offers

Another way how to spot a crypto scam is to notice how much marketing they provide. If you are overloaded with marketing ads, then this is likely to be a scam. Massive banners, lots of blogs on it and other promotional offers are all designed to target as many people as possible in the quickest time possible, so they can raise as much money in a short period. The more legit coins won’t advertise or expand exponentially and instead they will develop naturally. This is an easy way of how to spot a crypto scam.

Unnamed or Non-Existent Team Members

A simple way how to spot a crypto scam is to see who are the team members on the project. Like any business, you will easily be able to find out who all the team members are for the project. Once you have all the names, do your research on their background, and check their social media profiles for who follows them and who they follow. Contact these team members and ask them some questions about how they are achieving their promises. If they don’t respond, ignore them. Yes, this sounds like a lot of work, but if you are going to be investing your hard-earned money into something, it is always best to do your due diligence. This is a long way of how to spot a crypto scam, but it works well and ensures that your trades are protected. 

Check the White Paper

How to spot a crypto scam? Check for the whitepaper. The whitepaper outlines the initial coin offering (ICO) and describes how the project has been created, how it is going to grow, how the project will make money and will give a whole overview of the project. If the project doesn’t have a whitepaper, avoid it at all costs. If they do have one, but it is overly complicated, this is because the scammers are trying to confuse you as they know the project is fake. This is also a really simple way of how to spot a crypto scam. 

Watch Out For Fraudulent Trading Platforms

A cryptocurrency trading platform is a great way to start investing, but do your research first. Check the reviews for the platforms as this will give you a lot of information on how the platform performs and this will likely give you more information on how to spot a crypto scam on the particular platform. Many will offer great start-up bonuses and will also suggest they can beat prices and exchange rates with their automated process, this isn’t always the case. 

There are many spammy platforms, but it isn’t hard to decide on the more reputable platforms. How to spot a crypto scam via these platforms is to do your research and see what existing accounts are saying. 

Want To Make Safer Trades?

We hope this blog post has provided you with some of the best and easiest ways of how to spot a crypto scam and has given you some valuable tips so that you can go on to make safer investments. If you make regular trades and are unsure of the wallet destination where your funds are heading, check out our Crypto Wallet Checker to give you long-term peace of mind and a quick way of how to spot a crypto scam.