Web3 Anti-Fraud Handbook: Protect Your digital asset Security

In today's rapidly developing digital economy, cryptocurrencies and blockchain technology are playing an increasingly important role in the global financial system. However, this innovative and opportunity-filled field is also accompanied by various fraud and security threats. To help users better identify and avoid these potential risks, this manual provides an in-depth analysis of the fraud methods that crypto users may encounter at different stages, along with detailed breakdowns based on real cases, aiming to equip investors with practical anti-fraud skills.

This manual is based on an analysis of a large number of asset security incidents and in-depth communication with victims, accumulating valuable front-line experience, leading to a deeper understanding of victim psychology, the common techniques used by criminals, and the common types of scams in the cryptocurrency space.

The manual will discuss six major themes in depth: from the identification of information sources to the pitfalls of 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 encountered during withdrawal. We will reveal them one by one.

Poor source of information: You may have been scammed from the very beginning

Many investors are first exposed to crypto-related concepts on social media, self-media platforms, and online communities, where the environment is often mixed with both good and bad. Even mature investors need to sift through a lot of noise and rumors to find truly effective information, making it difficult for inexperienced investors to avoid being misled by fraudulent information. As a result, many criminals take advantage of the existing information barriers to defraud users outside the circle who lack relevant knowledge, using methods 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, trust, and emotional needs to lure investors into traps. This manual will teach you how to identify these fraudulent activities and avoid being deceived from the very beginning.

Wrong Asset Management Approach: The Pitfall at the Starting Point of the Crypto Journey

Unlike the centralized account login and verification systems of traditional Web2 platforms, Web3 infrastructures such as cryptocurrency wallets do not retain users' identity information or account permissions, nor do they have common settings found in traditional internet software platforms such as account cancellation, re-binding, or identity information recovery. This means that Web3 users need to manage their address keys themselves, and once lost, they will permanently lose control over their on-chain identity, or their on-chain assets may be stolen due to leakage.

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

When You Start Trading Crypto

Do you think there are financial products in the crypto market with sustainable annual returns exceeding 50%? Do you believe that by "staking" idle stablecoins in a certain "mining pool," you can earn money steadily? Do you think that by purchasing a certain token to participate in the "official exchange" staking activities, you can easily make money? If your answers are all "yes," then you might be in danger.

This manual will explain specific cases of high-yield exchange financial scams, Pixiu coin fraud, fake mining pool scams, fake public chain scams involving USDT to receive tokens, liquidity exit scams, and the truth behind them.

Crazy Phishing: Viral Growth

Phishing is an attack method that involves sending deceptive emails, text messages, calls, or websites with the intent of enticing users to disclose sensitive information or perform malicious actions. In the traditional internet era, such phishing activities were usually aimed at obtaining victims' cash assets or digital assets, but in recent years, with the development of the crypto economy, more and more fraudsters have begun to target Crypto.

Address poisoning, advertising tokens, and refund text messages are three common types of online fraud targeting unspecified individuals' digital assets. This manual will elaborate on these methods.

The End of Industrial Division of Labor: Crypto Drainer

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 target mnemonics. To assist agents in managing a large number of mnemonics, a dedicated management backend will also be developed, allowing agents to transfer victims' funds with one click or multi-sign victims' addresses. Address poisoning, impersonating official social accounts, arbitrage scams, and other phishing fraud techniques to deceive victims of token permissions are similarly supported by professional Crypto Drainers providing technical and even operational support.

OTC Fraud: The Weakest Link

In some countries or regions, over-the-counter (OTC) trading is the most commonly used method for cryptocurrency investors to convert fiat currency to Crypto. Such OTC activities can take place in various scenarios, including centralized platforms, online groups, and offline settings. However, regardless of the scenario, OTC activities carry the risk of fraud, including but not limited to losing fiat currency, losing crypto funds, and even threats to personal safety.

This manual 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. These barriers include not only the understanding of technical principles but also the cost of getting started with the use of infrastructure, as well as the barrier to obtaining accurate information. Newcomers who blindly ignore these obstacles often fall into traps. At the end of this manual, we list some security recommendations and what victims should do after encountering fraud.

Before you embark on this learning journey, we want to emphasize that anti-fraud is an ongoing process. Fraud tactics are constantly evolving, so staying vigilant and continuously learning is key to protecting yourself from fraud. We encourage you to use this manual as a starting point and to continually explore and update your knowledge base.