It cannot be ignored that the financial markets around the world are currently going through some of the most turbulent times in recent years. The financial consequences of the global Covid-19 epidemic reached all parts of the world and led to much greater volatility.
We hear a lot about the many problems in the capital market; however, many people do not talk about the cryptocurrency market, which is also undergoing a shake-up.
Beyond the frequent changes in the value of currencies, the phenomenon of crypto scams is starting to increase. Therefore, we strongly recommend that you consult with a lawyer before making transactions in these currencies.
A bit about the world of cryptocurrencies
A cryptocurrency is a kind of digital asset that is used as money and is also intended for the purposes of verifying the transfer of assets. The reason these currencies are called cryptocurrencies is because the word “crypto” means secret or hidden. Accordingly, cryptocurrencies use encryption techniques to enable safe, public and anonymous use:
It is expressed by the fact that the cryptocurrencies are found on the blockchain infrastructure, which uses sophisticated mathematical means to prevent proactive fraud.
It is expressed by the fact that every transaction is recorded in a kind of public ledger, which is open to all. This way, it is possible to track the currency and see who has it.
It expresses itself by saying that although the information is exposed to all, it is, in fact, a wallet number, which is identified by a “public key” – thus, although it is possible to know in which wallet the currency, on which the information is disclosed, is found. The identity of the person who holds the wallet cannot be revealed, unless he reveals it on his own initiative.
The expansion of the use of cryptocurrencies
While there are many types of cryptocurrencies, the most well-known is Bitcoin. Payment using cryptocurrency is becoming the preferred choice, especially among the younger generation (Generation Y and Generation Z) due to its anonymity and accessibility to everyone.
The use of the currencies is done through sophisticated algorithms that rely on the blockchain infrastructure. Thus, confidence and trust in these currencies is created and many choose to use them. In addition to private individuals, companies also adopt the use of cryptocurrency as means of payment.
Until the entry of the Trump administration, there was no regulation on cryptocurrencies. Upon assuming the presidency, he ordered the creation of a task force to investigate cryptocurrency scams. Accordingly, many frauds began to be found (one of the most famous of which was perpetrated by Israelis).
In recent years, there has been an increase in the efforts and cooperation of the federal government to prosecute companies suspected of being involved in fraudulent activities involving cryptocurrencies.
The lawyers working in the blockchain field
After understanding what cryptocurrencies are, we will focus on the main thing – how a lawyer in the field of crypto can help with a Bitcoin transaction.
The lawyers who deal with blockchain and bitcoin in particular include lawyers with different types of specializations. Among them are lawyers who specialize in securities, gambling, intellectual property (IP), regulation of gambling, information security and other relevant disciplines.
Crypto and blockchain lawyers support clients and help them understand the field and effectively and optimally utilize the full range of business opportunities that come their way. All of this is done at the same time as helping to overcome legal and regulatory barriers in this dynamic field.
Moreover, the lawyers who deal in the field of crypto can help you avoid scams and protect your money in a more reliable and better way.
Crypto scams are most commonly committed when it comes to a company’s initial coin offering (ICO).
Federal agencies in the USA have recently prosecuted companies for conducting their ICOs by using fraudulent techniques. Companies have also been prosecuted for stealing money from people’s electronic wallets and making transactions or using unverified exchanges and dubious servers.
Common devices used to launder cryptocurrencies include ATMs, gambling sites, cards bought through brokers, and more. Usually, since these transactions are untraceable, criminals can easily make the crypto transactions look like legitimate income.
In fact, there is real difficulty for investigators in this field to find the source of the fraud in these cases. In practice, as of 2021, crypto scams in the world have reached 14 billion dollars.
Preliminary safeguards against crypto scams
We recommend that you get the consultation of a lawyer who will advise you further before making the transaction. As part of this, he will know how to help you recognize if these are sites that look suspicious as those intended to commit fraud, he will know how to characterize sites and indicate whether these are phishing sites, fake apps, giveaway scams, and more.
Moreover, if someone asks you for your private key, as opposed to the public key, it is likely a scam. Crypto lawyers know how to protect your money and protect you from fraud even before you make the transaction.
Contacting a lawyer if you fear that a crypto scam has been committed against you
If you feel that the action you have taken using the cryptocurrencies is fraudulent, first – you must contact crypto lawyers at the first chance you get. This is done in order to consider together with them what steps can be taken to try to recover your assets or receive financial compensation. They will also know how to advise you in the courts if you decide to file a lawsuit.
However, even before filing a lawsuit, your lawyers may recommend various investigations. This may involve hiring a blockchain investigator or other cryptocurrency experts to trace your assets. They may also recommend applying to the court for relevant orders.
It should be noted that these measures are expected to be expensive, especially if the fraud is extensive and requires the effort of many parties.
In light of this, if the chances of the lawsuit being successful or finding your money are low, it may not be reasonable to carry out all these steps. Recommendations, as mentioned, will be made by a crypto lawyer who will know how to protect your money in the best way.
We recommend that you delve deeper into the world of crypto in order to independently understand where it is best to invest and where it is not, as well as to make sure that you conduct business with the right people.
This is meant to avoid scenarios, in which you lose your money to anonymous parties, which will be very difficult to locate and then, if you wish to sue them, you will need to invest a large amount of resources.
Moreover, since the crypto scams can be significant and cost you a lot of money, we recommend that you contact the law firm of Daniel Yanovsky, who specializes in crypto and will assist you both in advance and in retrospect given the fear of fraud.