FX.co ★ Crypto market: How not to lose millions of dollars on cryptocurrency

When trading cryptocurrencies, a huge number of traders are in the red. In other words, it is not uncommon to lose large amounts in the digital currency industry. But it doesn't make it any easier.

A couple of weeks ago, on October 9, traders lost more than $140 million in 24 hours when trying to make money trading bitcoin futures. This colossal amount slipped like sand through our fingers when the cryptocurrency became rapidly more expensive from $10,500 to $11,100. The contracts of those who played short were forcibly closed by the exchanges. It is quite a familiar rule: exchanges eliminate short positions of clients and keep the funds pledged by clients for themselves. They use this mechanism to avoid losing money. As they say, it's just business, nothing personal.

Something similar happened on October 13, when the price of bitcoin steadily rose and eventually reached an all-time high of $11,700. The growth of quotes again forced the exchanges to liquidate short positions of traders. In just 12 hours, market players lost as much as $75 million.

However, the loss of funds is not always directly related to trading. It is obvious that everyone wants to earn a lot of money quickly. But the laws of life are such that any pursuit of fast money is quite capable of luring a person into a trap. The end of September of this year is another confirmation of this. This period was truly a mourning period for those users who were able to lose $15 million in just one night. You ask how? Very simple. It is enough to find a smart contract in the Ethereum network and mistake it for an innovative development or a new project that is not one. Dreamers saw this smart contract of the famous developer Andre Cronje on the web, assumed that this project promises to be extremely successful, and invested a lot of money in it before the release. However, this "grandiose" project was just a test version. Cronje was still only at the testing stage and did not think about launching.

And it would be fine if the reason for such an oversight was only the curiosity of users. Unfortunately, on the same night, a hacker also became interested in Cronje's smart contract. Most likely, he was interested in the amount that he found at this address – as much as $15 million belonging to naive and rich users. Given the vulnerability of the project, the hacker easily took these funds, depriving investors of hopes for an unprecedented profit.

No matter how sad it may be, but dishonest users of the Network are quite often found by people who sincerely trust everything in an attempt to make good money. For example, a Russian pensioner living in Voronezh suffered from fraud, losing more than 1 million rubles. a Woman found an ad on the Internet about profitable investments and tried to purchase digital assets. Then a stranger contacted her and advised her to download a remote access app on her smartphone. The woman did so and later transferred her funds to the user account created there. The fraudster stopped communicating after the transfer of funds, or simply "merged". Of course, it was impossible to return the funds. It seems to be a well-developed scenario, an obvious scheme of fraudulent manipulation, but there are still sincere and trusting people who are brought by this scheme. Actually, they are counted on by various cheaters.

Although it is not necessary to expect insight and suspicion from ordinary people, when deceived by scammers and specialized users, for example, the DeFi sphere, are everywhere. This fall, a token sale (sale of tokens at ICO) from the Polkastarter (POLS) project was implemented on the Uniswap exchange. Everyone could add cryptocurrency to the platform presented. It is thanks to this nuance that the scammers were able to extract other people's money, having sold three fake POLS tokens by the time of the token sale on Uniswap. Practicing cryptocurrency trading, but obviously, still inexperienced users invested more than $30,000 in one of these tokens. Needless to say, after the transfer of funds, this fake asset simply depreciated.

One of the latest failures was the sad story of a user under the pseudonym John Doe, who was able to lose more than $140,000 in cryptocurrency in a day. And here again, the fraudulent sphere on the DeFi service appeared. John Doe followed the usual algorithm on this service, granting permission to withdraw funds from a personal wallet. If the user first turns to DeFi, then this kind of step is necessary according to the terms of the service itself. But John Doe, apparently, was simply unlucky: he connected to a fraudulent platform and, apparently, without suspecting a trick, gave the go-ahead not only to withdraw funds from a personal local wallet but also to access it at any time convenient for the swindler. Thus, while clearly not the most experienced and hardened user in such matters, the user was sleeping peacefully, when 36,000 UNI tokens, or, more simply, $140,000 were debited from his personal account.

However, you can lose digital assets not only through the fault of a fraudster. It is enough to make a mistake in one letter or number of the address, and all the invested funds are lost, leaving no hope of profit. Here it is important not to make a mistake when copying the address. Checking the address from which funds will be transferred, as well as the address where they will arrive, is a prerequisite for a client who values their money. Laziness and haste can play a cruel joke, emptying the user account. Although checking the first two and last two characters of the address is a quick method, it is risky, since there is a high risk of becoming a victim of the virus. Existing malware can automatically change the address copied to the clipboard and redirect funds to the wallets of the same scammers. In this case, it is useful to be careful, painstaking, and antivirus software with a fresh, updated database.

It is also extremely important that the coins and wallet where the funds should be received belong to a certain cryptocurrency. If a user mistakenly starts transferring Ethereum to a Bitcoin address, they will simply lose all the coins irrevocably. By the way, recently, many exchanges, thanks to the built-in function, do not allow such mistakes: when transferring to the wrong address, a warning will appear about this.

In order not to get caught on a phishing site and not become a victim, like John Doe, carefully study the site on which you are going to post your data or transfer your funds to the wallet indicated there. Sometimes it is very difficult to distinguish a fake site from a real one, but this does not mean that it is impossible.

Price fluctuations must also be taken into account when sending cryptocurrency, otherwise, the loss of part of the capital will be an unpleasant surprise. Fortunately, you can avoid this if you transfer your funds in stablecoins, for example, in USDT, BUSD, USDC, etc. The price of these units is pegged to the dollar, so a sudden drop by a significant 15-20% is not typical for it.

Finally, the most practical advice: it is better to make your first transfer for a small amount. This strategy is obvious if the user is dealing with an unfamiliar service. Following this advice, the client will not lose funds if it turns out that the platform is fraudulent or the wallet does not work on it for some reason.