Web3 Anti-Fraud Guide: Protect Your digital asset security

In the wave of the digital age, cryptocurrencies and blockchain technology are gradually becoming an indispensable part of the global financial system. However, this innovative and opportunity-filled field also comes with various frauds and security threats. To help users better identify and avoid these potential risks, we have meticulously crafted this "Web3 Anti-Fraud Guide," which deeply analyzes the fraud tactics that cryptocurrency users may encounter at different stages, and provides detailed breakdowns using real case studies, aiming to equip investors with practical anti-fraud skills.

As a professional regulatory technology company, we focus not only on theoretical research and risk data monitoring but also on the asset security incidents that occur in the present. Over the past year, we have received nearly a thousand various cases and assisted victims in tracking and recovering funds. Through in-depth communication with many victims, we have accumulated valuable frontline experience and gained a deeper understanding of victim psychology, the common tactics of criminals, and the types of scams prevalent in the cryptocurrency field. This experience provides a solid practical foundation and case support for the writing of the "Web3 Anti-Fraud Guide."

The "Web3 Anti-Fraud Guide" will discuss six major themes in depth: from the identification of information sources to the misconceptions of asset management, from financial traps during the transaction process to phishing, and finally to the Crypto Drainer at the end of the fraud chain and the potential OTC trading scams encountered during withdrawals. We will reveal them one by one.

Bad Information Sources: Prevention is Better than Cure

Many investors first encounter concepts related to cryptocurrencies through social media, self-media platforms, or online communities. The information from these channels is often mixed, and even experienced investors need to sift through a lot of noise and rumors to find valid information, which is even more challenging for inexperienced investors. Criminals take advantage of this information barrier to defraud novices who lack relevant knowledge, employing tactics such as distorting or fabricating facts, stealing account keys, and deceiving account permissions.

Seemingly harmless short video QR codes, social media, and emotional scams often exploit people's curiosity, sense of trust, and emotional needs, luring investors into traps. This guide will teach you how to identify these fraudulent activities and avoid being deceived from the very beginning.

Incorrect Asset Management Methods: The First Hurdle of the Web3 Journey

Unlike the centralized account login and verification system of traditional Web2 platforms, Web3 infrastructures such as cryptocurrency wallets do not retain users' identity information and account permissions, nor do they have common functions found in traditional internet software platforms such as account cancellation, re-linking, and identity information recovery. This means that Web3 users need to take care of their address keys themselves; once lost, it will result in the permanent loss of control over their on-chain identity, or theft of on-chain assets due to leakage.

Some coin thieves take advantage of investors' lack of understanding of blockchain wallets to deceive them into revealing mnemonic phrases, private keys, or wallet operation permissions, thereby stealing their assets. This guide will expose common scams such as fake wallet APP coin theft, multi-signature case payments, authorization scams, fake chat tool scams, and hardware wallet manual fraud.

When you start trading cryptocurrencies

Do you believe that there are sustainable financial projects in the crypto market that offer an annualized return of over 50%? Do you think that by using idle stablecoins to "stake" in a certain "mining pool," you can steadily earn money? Do you think that purchasing a certain token to participate in the "official exchange" staking activities can easily yield profits? If your answers are all "yes," then you may already be in danger.

We will provide you with a detailed explanation of specific cases and the truth behind high-yield exchange financial scams, Pi Xiu coin fraud, fake mining pool scams, fake public chain holding coin and receiving coin scams, liquidity exit scams, and more.

Phishing: A Viral Growth Threat

Phishing is an attack method that involves sending deceptive emails, text messages, phone calls, or websites with the intent of enticing users to disclose sensitive information or perform malicious actions. With the development of the cryptocurrency economy, an increasing number of fraudsters are beginning to target cryptocurrency holders.

Address poisoning, ad tokens, and refund SMS are three common types of online fraud methods targeting unspecified individuals' digital assets. This guide will elaborate on these in detail.

Crypto Drainer: The Ultimate Weapon of Industrial Division of Labor

Drainer is a type of malware specifically designed to illegally empty or "drain" cryptocurrency wallets. This software is rented out by its developers, meaning anyone can pay to use this malicious tool.

Crypto Drainer conducts reverse analysis on mainstream cryptocurrency wallet software and modifies specific code to obtain the target mnemonic phrases. To assist agents in managing a large number of mnemonic phrases, a dedicated management backend will also be developed, allowing agents to transfer the victim's funds or multi-sign the victim's address with one click. Behind phishing fraud techniques such as address poisoning, impersonating official social accounts, and arbitrage scams to deceive victims into relinquishing their token permissions, there are also professional Crypto Drainers providing technical and even operational support.

OTC Fraud: The Weakest Link

In certain countries or regions, over-the-counter (OTC) trading is the most commonly used method for cryptocurrency investors to convert fiat currency to cryptocurrency. Such OTC activities may occur in various scenarios, including centralized platforms, online groups, or offline, but regardless of the scenario, OTC activities carry the risk of fraud, including but not limited to being scammed out of fiat currency, being scammed out of crypto funds, and even threats to personal safety.

This guide lists some common fraud methods: exchange coin merchant fraud, offline trading fraud, offline multi-signature fraud.

Conclusion

Compared to other fields, the Web3 industry has a higher barrier to entry, which includes understanding the technical principles, the cost of getting started with the infrastructure, and the difficulty of obtaining accurate information. Newcomers who are blindly confident and ignore these barriers often find themselves in trouble. At the end of this guide, we list some security recommendations and the measures that victims should take after encountering fraud.

Anti-fraud is an ongoing process. Fraud tactics are constantly evolving, so staying vigilant and continuously learning is key to protecting yourself. We encourage you to use this guide as a starting point to continually explore and update your knowledge base. At the same time, we will continue to share and analyze the latest security incidents, interpreting the fraud methods involved.