Julia Baranovskaya, Chief Compliance Officer of NDAX, speaks with columnist Justin Roberti
More than halfway through 2020, virtually everyone has experienced significant changes in both personal life and in business.
More than 40 million people have filed for unemployment in the US and people worldwide have lost employment and income, it seems the pandemic may drive mainstream adoption in a way that 100 well-meaning visionary white papers could never accomplish on their own. Bitcoin performance has crushed traditional stock markets since March 2020.
However, cryptocurrencies are a complex world with rules and technology that are hard for the uninitiated to understand. Bitcoin has outperformed some “safe investments” such as natural gas and oil and even the US Dollar, so clearly crypto has proven its value, particularly as a hedge or safehaven in an uncertain market but even economists can’t seem to predict the long-term performance of Bitcoin let alone more than 5,000 altcoins that are available.
So how do you protect yourself as a newbie investor trying to make some new income or protect the value of your traditional investments by diversifying with cryptocurrencies?
To find these answers, I spoke with Julia Baranovskaya, Chief Compliance Officer of NDAX, a Canadian crypto exchange. In addition to leading the exchange’s compliance efforts, Julia works closely with customers to get them through challenges, bringing her into direct contact with a new spate of scammers that appeared along with the pandemic.
11 Tips from an Exchange Insider to Protect Yourself When Buying Crypto
“There has been a definite increase in scam activity since the outbreak,” Baranovskaya said. “I have worked with elderly people who may have limited knowledge in virtual currencies to get their retirement money back and worked with people like one single mom who accepted a fake part-time job opportunity, quit her current real job, and started sending scammers increasingly large amounts of money on our exchange under the auspices of expediting crypto payments for the non-existent job. These stories can be heartbreaking, you feel terrible for the victims, but at least when it’s elevated to the point where we are dealing with them directly we can shut down the scammers and try to get the victims their money back.”
Julia provided a few simple tips to follow to help make your crypto investing experience relatively safe and scam-free:
- Do your research – Check to see if the business that you are in contact with actually exists. Find out exactly who you are dealing with. Depending on what industry the business is in, check their registration, their website, conduct an online search, and look for online reviews from other people.
- Do not provide personal information – Especially if you have not initiated contact but were contacted by a representative that is asking you for your personal information, DO NOT give personal information, such as name, your identification number (SIN), date of birth, address or your government-issued picture ID. If you have been contacted by someone claiming to be from your bank or governmental agency, hang up and call the number on the back of your bank card or phone number for the agency that called you.
- Do not grant remote access – Do not allow anyone to access your computer remotely unless you are receiving support from a trusted source. Hackers will find ways to access your computer remotely and retrieve your personal information and your online passwords that are saved on your computer. If such information is obtained, it can be used in opening online bank accounts under your name and depleting your savings in your bank account.
- Reject sales pressure – Do not be afraid to say “NO” and do not buy into “call for action” or an urgent request that is time-sensitive. Offers like “one time only” and “today’s special” are an attempt to pressure you to make “on-the-spot” decisions that will not allow you to do your own research or analyze if this is you making the right decision.
- Say no to upfront fees -Be wary of any types of upfront fees, especially if they are part of an online job offer that is requesting you to pay an upfront fee so they can verify your address for future payment. Or when you get that phone call with someone on the other end informing you that you won a trip to a sunny destination and you have to pay an upfront fee to reserve your spot. It sounds very cliche’, but if it sounds too good to be true, most probably it is.
- Ask for more time – Got an offer that is very hard to say “no” to, but there is no time to decide, as it is about to expire?! Ask for an extension of the offer and request that they send you the information in writing. Still not sure if this is the right choice and if the offer is right for you, get an extra opinion or call other service providers in the same line of business to better evaluate the offer and understand its true value.
- Use stronger passwords – We always suggest using a strong and complicated password and not to write it down, on all the online platforms that we use and they all recommend using a “unique” password. It’s hard to come up with a new password every time and it’s even harder to remember them all. To resolve this issue you can use an online password manager app which will help you generate a unique password and will keep the record of it for you, so all that you need is to remember one password for your password manager.
- Do not share your ID – Do not share an image of your government-issued picture ID. Do not post pictures of it online. Do not share your personal, biographical, or identification information on social media. It is surprising to see that people will sometimes post pictures of their ID on social media – but it’s inviting all kinds of trouble.
- Watch for unordinary behavior – Watch for anything suspicious or “out of the norm” from your service provider. Your bank or your phone service provider will never send you a phone text asking you to click on the link to accept a deposit for some unknown refund that they owe you. They will just process it and notify you later.
- Just hang up – If the caller on the other side is too pushy and is not allowing you to think about the offer, just hang up.
- Avoid suspicious emails – If you get an email from an unknown sender with links, offers, and other information that looks very tempting, do not click on the links – you don’t know who sent it to you and it may be a trap. Do not click on the links or pop up windows, it may be a virus that can infect all the information on your computer and compromise your security.
These are common-sense precautions that can make it significantly harder for scammers to compromise you and your information, but what do you do if you have already been the victim of a possible scam?
If you have been a victim of fraud and you think that your personal information has been fraudulently used or your bank or other online accounts have accessed by an unauthorized person:
- Call your bank or your credit card provider and inform them that your account may have been accessed by an unauthorized user and ask the bank or credit provider to send you new cards.
- Reset all your online passwords, such as all your online accounts, your email, and your computer.
- Contact your local law enforcement agency.
- File a report with your Anti-Fraud center. Links to Anti-Fraud centers are listed below.
“A surprising number of people don’t want to talk about scams they have fallen victim to. People are embarrassed and surprisingly often don’t want to pursue it — even if they lost money. Remember, bad actors exist in every industry and crypto scammers are just relying on the mystique of blockchain technology as something cool and high-tech that few people really understand. There is no need to be embarrassed – if you have been fooled, you were tricked by someone who does this for a living. Share your experiences so others can learn, contact your exchange if something has happened so they can help track down anomalous activity from scammers, and work to be better informed next time.”
*Note: This list is shorter than I intended — it is surprisingly hard to find where you should report crypto fraud in China, India, etc. Please leave other places to report fraud in comments and I will follow up with an article that shares that information with a more inclusive list.
Places to report crypto fraud:
USA.gov (US): https://www.usa.gov/stop-scams-frauds
Anti-Fraud Centre (Canada): https://antifraudcentre-centreantifraude.ca/report-signalez-eng.htm
Action Fraud (UK): https://www.actionfraud.police.uk/reporting-fraud-and-cyber-crime
Scam Alert (Singapore): www.scamalert.sg
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