3 Ways To Protect Yourself From Possible Scams When Being Paid in Crypto

Robert Stone

AMLBot, an anti-money laundering service, reported that one-third of the American freelance workforce is now paid in cryptocurrency. According to AMLBot, an anti-money laundering service, one-third of American freelancers are now paid in cryptocurrency. Below are some tips to protect yourself from a possible scam if you are getting paid in crypto.

Check the Employer's Wallet

Payments should be coming from a legit crypto wallet. The AMLBot and AMLSafe crypto wallet's CTO, Slava Demchuk, says it is difficult to tell whether a payer is trustworthy simply by asking or identifying them. "Getting crypto on your account is just the beginning. Each transaction is checked and validated by the network under the hood, which is a much more complex process. Since these processes are not visible or traceable, a small number of illegal funds can be hidden in anyone's account. Things seem fine - until they don't. Even payers you trust can put you at risk unwillingly."

Ensure that any payment you receive is from

a trustworthy source by using anti-money laundering screening services like AMLBot, Chainalysis, or Elliptic.

Make Your Crypto Wallet Secure You should not only check the legitimacy of the wallet from which your payments are coming but also choose a secure wallet. Multi-signature authentication and two-

factor authentication are safety features to look for.

In addition to ease of use, you should consider a few other factors when choosing a crypto wallet. "If you are a newbie, choose one with an easy and intuitive interface," Demchuk advised. "Determine whether you're interested in long-term safekeeping or active trading, then pick one with the right capabilities."

A multi-currency wallet may also be of interest to you.

Demchuk said that some wallets support only one or two cryptos while others support a wide variety of cryptocurrencies. Choose one that supports the currencies you intend to use." The more vendors you work with, the more wallets you may need. Demchuk suggested that you create a wallet for your trusted contacts and another for your high-risk or unknown contacts. "In this way, you will keep your funds safe and secure and minimize the risk of receiving 'dirty crypto." Choose a Secure Crypto Exchange Choose a trustworthy cryptocurrency exchange to ensure the safety of your funds. "Avoid

trading crypto on exchanges that do not require Know Your Customer (KYC)

verification," Demchuk said.

What To Do If Your Crypto 'Payment' Is A Scam

Even if you take all the precautions, it's possible to become the victim of a crypto scam. Suppose "dirty crypto" — crypto that originates from a hack, criminal activities, or unregulated exchanges — is deposited into your account. In that case, your wallet can get banned, and you could lose access to the funds within it. If this happens to you, there are actions you can take to try to recover your funds.

Demchuk advised disputing the decision with

the exchange first. "You can also get professional help from companies that offer crypto dispute resolution services and investigations."

It could also be that the payer was scammed and sent you a bad payment without realizing it. "Inform the payer that they may be the victim of a scam and warn them to be extra vigilant in future transactions," Demchuk said. "Lastly, ensure that you never receive any other payments from the same source, and be super careful when dealing with future payments and transactions."