Fake or fraudulent cryptocurrencies, tokens and NFTs, some recommendations to identify them.

Originally Posted: Publish0x

The DeFi ecosystem is a market in constant evolution and with an explosive growth, one of the underlying dangers of any emerging technology is the possibility of counterfeit or fraudulent tokens, identifying if a particular token is fake will prevent any unwary investor from future losses of both time (your best asset), and financial.

A brief refresher, what are cryptocurrencies, tokens and scam NFTs, counterfeit tokens are those that mimic the look, feel and structure of a legitimate cryptocurrency and are created with the intention of tricking users into believing they are buying the real thing when in fact they are not. These counterfeit tokens created by cybercriminals can be used for illicit purposes such as money laundering, fraud and other illegal activities. Note that they are almost always created using the same technology as the authentic ones, but with altered code that can make it difficult for users to identify the difference. The creators of these tokens may also put mechanisms in place to make it more difficult to spot the difference, such as using a different logo, changing the ticker symbol, or changing the block browser URL.

The intention behind the creation of these fraudulent tokens is always the same, to take advantage of unsuspecting investors for the explicit purpose of stealing their money. A very common feature shared by all fake tokens is that they are often promoted as a get-rich-quick scheme or a "guaranteed return" on investment. The creators of these tokens often seek to capitalize on market excitement and take advantage of those who are unfamiliar with the cryptocurrency and the underlying technology. They are often sold through fraudulent websites, email campaigns and other promotions, in some cases, these tokens may be backed by real assets, such as real estate or stocks, but the creators of these tokens are often not transparent about their true nature or the risks associated with investing in them.

With the market getting bigger by the day, identifying a fake token is sometimes a Herculean task, but not impossible. The first step in identifying a fake token is to verify the authenticity of the token itself, a good starting point is to look up the token's address on a blockchain explorer like Etherscan, see if that token is listed on a legitimate exchange, you can also look up the token's address on the token's website.

Another way to identify a fake token is to look at the code associated with the token, if the code looks suspiciously similar to other tokens on the exchange or if it uses an unfamiliar token standard, also, if the code is not open source and not publicly available, it could also be a sign that the token is fake. Look for any signs of Ponzi or pyramid scheme, if the creators of the token encourage users to recruit more investors or invest more for a higher return proceed with caution.

Look for whether the token has a website or other online presence, look for red flags, such as typos or incorrect information about the token, that the website (if it has one) lacks information or has no contact information could be indicators of a scam. Look also at the promises made by its creators, if they promise guaranteed returns or make unrealistic profit claims, if the token is promoted through spam emails or other unsolicited promotions, if the team behind the token is anonymous or if the team members do not have a proven track record in the industry, then it is likely, very likely to be a fake or fraud.

There are countless tools and websites available to help users identify whether a given token is fake or fraudulent, among the most popular are TokenSniffer, StaySafu and MoonArch just to give a few examples. These tools allow users to search and view information about specific tokens, the code, the team behind the token and the token's address on the blockchain. They also offer a range of analytics and data about the tokens, such as number of transactions, number of holders and transaction volume. Using many of these tools will help you identify tokens that are unusually active or have too many holders, indications also that a token may be counterfeit or fraudulent.

https://tokensniffer.com

https://www.staysafu.org

https://moonarch.app

Identifying counterfeit and fraudulent tokens is an important part of participating in the DeFi space, understanding the warning signs and using the right tools will help you as an investor or user avoid falling victim to malicious actors and protect yourself from financial loss. Do your own research, do not be fooled by "siren songs" about fabulous profits in a short time, the market does not work like that, beware of super promotions in social networks and other mass media that many, many times are just "selling smoke". Do not be part of these scams and denounce them is also a way to protect and contribute to more and more users to trust, adopt and join an ecosystem that in one way or another many of us love.

 “Everyone has their own forms of expression. I think we all have a lot to say, but finding ways to say it is more than half the battle" - Criss Jami.

"Everything we hear is an opinion, not a fact. Everything we see is a perspective, not the truth" - Marcus Aurelius.

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"You will ask yourself: And if I take a risk and lose...? I will ask you: AND IF YOU RISK AND WIN? Success begins with thought, because sooner or later the man who wins is the one who believes he can do it. Do not be afraid of mistakes or failure, winners are not afraid of losing, losers are, in most cases the risk comes from not knowing what you are doing, so trust yourself, learn, be patient, manage your emotions and above all, enjoy the journey, what the wise man does at the beginning, the fool does at the end" - Anonymous.

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Author's Note: The opinion expressed here is not investment advice, is provided for informational purposes only, and reflects the opinion of the author only. I do not promote, endorse or recommend any particular investment. Investments may not be right for everyone. Every investment in the market and every trade you make involves risk, so you should always do your own research before making any decision. I do not recommend investing money that you cannot afford to chair, as you could lose the entire amount invested.