Web3 Anti-Fraud Guide: Protect Your digital asset security

In today's thriving digital economy, cryptocurrencies and blockchain technology are playing an increasingly important role in the global financial system. However, this innovative and opportunity-filled field also presents various fraud and security threats. To help users better identify and avoid these potential risks, we have written this "Web3 Anti-Fraud Guide," which delves into the fraud tactics that crypto users may encounter at different stages, and provides detailed breakdowns using real cases, aiming to equip investors with practical anti-fraud skills.

This guide will discuss six major themes in depth: from identifying sources of information to misconceptions in asset management, from financial traps in the trading process to phishing, and finally to the Crypto Drainer at the end of the fraud chain and the potential OTC trading scams that may be encountered during withdrawals. We will reveal each one.

Beware of unreliable information sources

Many investors first encounter concepts related to cryptocurrency through social media, self-media platforms, or online communities. The information on these platforms is of mixed quality, and even experienced investors need to sift through a lot of noise and rumors to find valuable information, making it even more difficult for novice investors to distinguish between true and false. Criminals often exploit this information barrier to defraud users who lack relevant knowledge, using tactics such as distorting or fabricating facts, stealing account keys, and deceiving users into granting account permissions.

Investors need to be cautious of seemingly harmless yet risky fraudulent methods such as short video QR codes, social media, and emotional scams. These tactics often exploit people's curiosity, trust, and emotional needs, leading investors into traps. This guide will teach you how to identify these fraudulent activities and avoid being deceived from the very beginning.

Correct Asset Management Methods

Unlike the centralized account system of traditional Web2 platforms, Web3 infrastructure such as cryptocurrency wallets does not store user identity information and account permissions, nor does it have the common functions of traditional internet software such as account cancellation, re-binding, or identity recovery. This means that Web3 users must take care of their address keys themselves; if lost, they will permanently lose control over their on-chain identity, or their assets may be stolen due to leaks.

Some criminals take advantage of investors' unfamiliarity with blockchain wallets to deceive them into revealing their mnemonic phrases, private keys, or wallet operation permissions, thereby stealing their assets. This guide will reveal common scams such as fake wallet applications stealing coins, multi-signature fraud, authorization scams, impersonating customer service scams, and hardware wallet manual fraud.

Considerations When Trading Cryptocurrencies

Many investors are easily attracted by the promises of extremely high returns, mistakenly believing that there are sustainable financial products in the cryptocurrency market that offer annual returns exceeding 50%, or thinking that simply depositing idle stablecoins into a "mining pool" will lead to stable profits. These ideas are often dangerous.

This guide will analyze specific cases of high-yield exchange financial scams, Pi Xiu coin fraud, fake mining pool scams, counterfeit exchange public chain activities, liquidity exit scams, and the truth behind them.

The Threat of Phishing

Phishing is a type of attack that involves sending deceptive information to induce users to disclose sensitive information or perform malicious actions. As the crypto economy develops, more and more fraudsters are targeting the cryptocurrency space.

Address poisoning, advertising tokens, and counterfeit withdrawal information are three common types of online fraud targeting digital assets. This guide will discuss these in detail.

Crypto Drainer: An Emerging Threat

Drainer is a type of malware specifically designed to illegally empty cryptocurrency wallets. This software is rented out by its developers, allowing anyone to pay for the use of this malicious tool.

Crypto Drainer obtains target mnemonic phrases by performing reverse analysis on mainstream cryptocurrency wallet software and modifying specific code. To assist agents in managing a large number of mnemonic phrases, a dedicated management backend will also be developed, allowing agents to transfer victims' funds or multisignature victims' addresses with one click.

Risks in OTC Trading

In some regions, over-the-counter (OTC) trading is the most commonly used method for cryptocurrency investors to convert fiat currency into digital assets. Such transactions can occur in various scenarios, including centralized platforms, online groups, or offline settings. However, in any scenario, OTC activities carry fraud risks, including fiat currency scams, crypto fund scams, and even personal safety threats.

This guide lists some common fraud methods, such as exchange broker fraud, offline trading fraud, and offline multi-signature fraud.

Conclusion

The Web3 industry has a high barrier to entry, including understanding technical principles, utilizing infrastructure, and obtaining accurate information. Newcomers who blindly overlook these barriers often fall into traps. At the end of this guide, we list some security recommendations and the measures victims should take after encountering fraud.

It is important to emphasize that anti-fraud is an ongoing process. Fraud tactics are constantly evolving, so staying vigilant and continuing to learn is key to protecting yourself. We encourage you to use this guide as a starting point and continuously explore and update your knowledge to better protect your asset security.