I have received many questions from newcomers to the cryptocurrency market about what scam means and how to avoid being deceived. In fact, this is a very important issue that everyone needs to understand clearly.

What does scam mean? Simply put, it is fraudulent behavior—bad actors trying to seize your assets through sophisticated tricks. Those who carry out these actions are called scammers and will face penalties if caught. Nowadays, with the development of the internet, scams are becoming more sophisticated and complex, especially in the cryptocurrency field.

I often hear investors say they have been scammed. This happens when you fall into the trap set by fraudsters. There are two common cases: one is you don’t realize you’ve been deceived, and the other is you know it’s a scam but still participate for quick profits. For example, Ponzi schemes—where the money from new participants pays earlier investors—so the earlier you join, the more profit you can make. But when no new participants join, the system collapses and everyone suffers losses.

There are quite a few scam methods I want to share. ICO scams were the most common during the ICO boom in 2017. Scammers create a new cryptocurrency project, advertise exaggerated promises, even hire famous KOLs to increase credibility. After raising funds from investors via ICO, they abandon the project and disappear with the money. You can recognize this type of scam by some signs: the project has no real solution, the development team is anonymous or has scammed before, the website and whitepaper are poorly prepared, the roadmap is unclear, or the project community is unprofessional.

Another common scam I see on decentralized exchanges (DEX) is liquidity withdrawal or rug pull. Initially, the project is built very professionally, then they issue tokens and list them on liquidity pools. You can spot this by signs like very low liquidity or promises of abnormally high APY returns. There are also other scam types, such as locking trading functions or hacking the project to dump large amounts of coins.

So how can you avoid scams? Before investing, you need to thoroughly research the project—understand its solution, whether blockchain is truly necessary, how the community is built, and the tokenomics. Nowadays, there are many tools to help check, such as examining smart contracts for warning signs. Most importantly, when connecting your wallet to a website, make sure it’s truly reputable before granting access. Once you no longer need it, remember to revoke permissions to prevent misuse.

In summary, you now understand what scam means—it is a real danger in the world of cryptocurrency. I hope this knowledge helps you protect your assets. Wishing you smart and safe investing!