Do you want to lose all your ada?

Do you want to lose all your ada?

Now this seems like a question with an obvious answer, No.

However, blind trust without a bit of personal awareness, responsibility and education around online safety can result in you unwillingly losing all your assets, without the possibility of getting them back. – They’re not insured and no one else is responsible for them.

Now and again I feel it is right to refresh people with basic safety information, so you can look after your assets and be vigilant online, to reduce the chances of falling for some very convincing scams.

In Crypto they say ‘don’t spend more than you’re willing to lose’ , nevertheless I presume the majority of you bought your crypto assets with money you worked hard to earn, and I for one don’t want to lose any of it.

Whenever you create a wallet, you will be given a seed phrase (a number of random words). This seed phrase is used to retrieve both the public key and private key. The public key generates an address used to send and receive ada. The private key is used to prove you control the address and the associated funds. Anyone with the seed phrase has full control and ownership of the assets associated to the wallet. This is why it is important to:

  1. Record the Seed Phrase – preferably not on a digital device or cloud based service.
  2. Keep the Seed Phrase safe – Write it down on a piece of paper and store it somewhere water and fire resistant.
  3. Do not disclose the Seed Phrase to anyone, unless you want them to have unconditional control of your assets.
  4. Only ever put your seed phrase into a trusted wallet when you intend to restore your address and access your funds. – Never put your seed phrase into unknown websites or software

Fraud, Malicious Content and Websites

It’s apparent there are criminals out there who create websites or accounts which look similar, if not identical to official ones, all designed to steal your assets.

Malicious Websites

Fraudulent websites usually relate to Yoroi, although other wallet names can be used. Usually you’re required to enter your seed phrase into their malicious website, claiming you will restore a web based wallet. In fact you are simply giving the criminals your seed phrase; they will steal all your assets and empty your wallets.

The other option they give is to create a wallet. The website generates a random seed phrase with no meaning. It then gives you access to a malicious web based wallet with an address the criminals own and in fact, has no connection to the seed phrase you just recorded. When you send ada to the malicious wallet, it may appear on the website, but in fact you have just sent it to the criminals’ wallet with no way of getting it back.

Imposter accounts

Some of you may notice criminals steal the identity of officials from EMURGO / The Cardano Foundation or IOHK. Usually criminals steal the identity of influential people within the Cardano Space to create Twitter, Telegram or other accounts, they reach out to un-expecting victims and lure them into giving up their seed phrase.

Basic Awareness

To help combat this you may notice Ambassadors and other officials in Telegram have started adding additional content to their names for example (I will not DM you). This helps people know if they are being targeted by a scammer via a private message. If you are contacted out of the blue by an ‘ official looking account’, that should ring alarm bells. You should confirm their identity by checking their username and linking the account to the official channels. Imposters may put the official accounts username in the Bio section or slightly change the username to fool their targets. Even better, ask the official in the public channels to confirm their contact with you. – You are being scammed until you prove otherwise.

To avoid being scammed by malicious accounts, it also requires some basic awareness on your part. Only follow twitter accounts that you can prove are legit – Scroll down, look at the accounts history, has it always been Cardano? If not, I would suggest it’s an imposter account. – Sebastian wasn’t writing in Malay Language a year ago, tweeting about his sister and football.

The key is to not just believe everything you’re told online, you need to take personal responsibility and verify the legitimacy yourself. – do you know the official websites for the official Yoroi and Daedalus wallets? Don’t just click links sent to you, find them yourself and never download an official wallet from anywhere but the offical website.

Interest in a project

Believe it or not; showing interest in a project by keeping up to date with official news and announcements, through official channels (not just third party media outlets) helps prevent falling for scams. (I certainly wouldn’t invest my real money on a project if I wasn’t prepared to understand and keep up to date with what’s happening. How else would I know if the project is doing well or not and if I need to move).

A great example of this is the recent OBFT hard fork. Now, people who are signed up to the official IOHK Twitter, Telegrams Cardano Announcement channel, IOHKs YouTube channel and other official outlets, never questioned the OBFT hard fork. However people who hold ada as a gamble (probably among other crypto assets), but don’t have an interest in the project itself became evident through this period of time. These people understand ‘Hard fork’ to mean creating a new blockchain and token – Bitcoin to Bitcoin Cash. These people were asking how they can claim their new tokens and what they are required to do for the update.

Firstly let me be clear, the OBFT hard fork did not create any new tokens and ada holders didn’t have to do anything. It was an update very much in the background, with only the exchanges and wallet companies having to upgrade – all clearly communicated for a period of time prior.

Unfortunately criminals used this opportunity to target people for their ada, with false promises to the victim around claiming their new ada tokens at a 1:1 ratio.

Final Words

Basic understanding and awareness doesn’t mean being paranoid or avoid getting involved in the community. Cardano has a great community and lots of very friendly people, willing to help and talk Cardano. It’s more about having information in the back of your mind so if something doesn’t seem right, it probably isn’t. So you stop, report to officials and verify.

Thank you for reading, Stay Safe Online.

Some older safety posts with more detail and always worth a read: