How I (Almost) Lost $2,829, and How to Avoid My Mistake

Sigh.

When it comes to crypto, even the most experienced make mistakes. How do I know this? Well, just tonight I made one.

An absolute cracker too. It’s the most basic of mistakes. One that I’m always warning subscribers of Sam Volkering’s Secret Crypto Network about.

And what did I go and do? Broke the number one rule of checking and checking again crypto addresses.

That’s right, of all the idiotic things I could do, I put the wrong address into a ‘to address’ field.

I had a bunch of crypto tokens in Etherdelta. That’s a peer-to-peer crypto exchange. It’s a little tricky to use — even for me. But I’ve used it before and typically don’t have any problems.

All I was trying to do was to send a little over 6 ETH worth of tokens to my personal MyEtherWallet (MEW) address. All I had to do was put my MEW address into the Etherscan ‘to’ field and hit send.

I was certain I’d copied the address correctly and put it into the right field. Except I didn’t check it. I got complacent. I assumed I had done everything right.

I had not.

Instead I didn’t realise I’d copied an address from another different smart contract, from earlier. I was investigating a bunch of cryptos and checking their smart contract codes. I must have copied one of them to put down on my research notes.

And that was the address I accidentally put into the ‘to’ box in Etherdelta.

After I hit send I went to Etherscan to check the transaction. That’s when I realised my mistake. I could have kicked myself.

Instead I sent $2,829 worth of tokens into a smart contract that was never supposed to receive them. Basically, I lost $2,829.

Now fortunately I was able to track down the developers of the smart contract. I explained to them how much of a buffoon I was. They said to send a support email to their token support team, and hopefully they’d be able to help.

Shortly afterward, the token support team got back to me to say they would reverse the transaction. Thankfully that means I almost lost $2,829. But I still had a good couple hours of self-pity and blame.

The thing is, they didn’t have to. They were able to send my tokens back. But they could have simply said no. Or not responded. And there would have been nothing I could do. It was my mistake, my fault, and would have been my loss.

Thankfully they have sufficient goodwill, and sent my tokens back. If not that would have been $2,829 worth of tokens I no longer have. All because of a stupid mistake that is easily avoided.

Let my error be a reminder that even the best of us can stuff up when moving crypto about. I could easily have not told you this story. I could have kept it to myself. But that serves no purpose.

This is a reminder that cryptos are risky. Not just buying and trading them, but moving them around. And it’s a risk you need to be aware of, and know how to avoid.

Learn from this. Don’t get complacent. Even if you’ve been around crypto as long as I have, mistakes still happen. Check your addresses, then check them again, and again, and again.

With this in mind I also wanted to give you a few more things to look out for with cryptos. Mistakes are easily made. But there are also plenty of people out there trying to force you into mistakes.

These scammers are everywhere in the crypto world right now. They’re attracted by the large amounts of money flowing into the crypto sector, and by the relative lack of protections. You should keep an eye out for them.

Here are two of the most important ways to avoid getting scammed — particularly if you’re contributing to initial coin offerings (ICOs). 

How to spot ICO scams

Keeping your crypto safe means storing them correctly, as we’ve just explained. But it also means knowing how to spot and avoid scams as well.

At some point you’ll need to transfer your crypto from one location to another. That might be to pay for goods and services. It might be to simply exchange for other crypto tokens. It may be to contribute to an initial coin offering (ICO).

Whatever it may be, you need to make sure you’re not playing into the hands of scammers. You need to make sure that your crypto gets to where it needs to be. Sadly, we see victims of scams every day online.

Here’s two of the most common ways people fall for scams in the world of crypto.

  1. Wed Addresses

This is a classic scam technique, and one to easily avoid. Often when sending crypto to an ICO or to an exchange you need to generate a receiving address. Often you simply go to the project or exchange website and get the address details.

However, smart scammers have figured out they can perfectly replicate websites to look exactly like the legitimate site. Then they embed a fake address for you to send crypto to. When you send crypto to these scam addresses, that’s it, say goodbye to your crypto.

Now while the fake sites can look exactly the same there will always be one difference: the actual HTML address.

For example a legitimate site address may look like:

tokensale.project/pre_sale

And examples of a fraudulent site might look like:

tokensaIe.project/pre_sale

Notice a difference? Take a closer look. In the fake one ‘tokensaIe’ includes a capital ‘I’ whereas the real site use a lowercase ‘L’. Almost impossible to see.

Or here’s another example of what a legitimate address may be:

project_crypto.info

And a fake one:

project__crypto.info

This time the only difference is two underscores in the address, rather than one. That’s all it takes. Just tiny differences in the web address and scammers can have their way.

That’s why one of the most important things you can do is to double-check the right address. And avoid clicking links where possible. Always input the web address yourself.

  1. FOMO emails

We all have registered our email address at one point or another with a crypto project. Sometimes to receive updates. Sometimes to get on a whitelist. But hackers sometimes get a hold of our email addresses.

They know that in the crypto world there’s a lot of ‘fear of missing out’ (FOMO). They play to this fear and during token sales will often send out mass emails claiming ‘time is running out’ or the sale ‘is offering a new bonus to reward early adopters’.

Any offer of an extra reward of free tokens, or anything the project hasn’t officially mentioned, is likely a scam. The scammers will also give a crypto address to send tokens to so you can ‘get your special access’. That’s a big red flag.

You need to check the sender of the emails, and always check the legitimacy with developers. FOMO emails are one of the most common ways to fall victim to scammers.

Keep all these things in mind when navigating the world of crypto. If they help even one of you avoid being scammed or sending tokens to wrong addresses, then it’s been worthwhile.

Remember to stay vigilant and safe out there.

Regards,

Sam Volkering,
Editor, Secret Crypto Network


Sam Volkering is an Editor for Money Morning and is small-cap, cryptocurrency and technology expert.

He’s not interested in boring blue chip stocks. He’s after explosive investments; companies whose shares trade for cents on the dollar, cryptocurrencies that can deliver life-changing returns. He looks for the ‘edge of the bell curve’ opportunities that are often shunned by those in the financial services industry.

If you’d like to learn about the specific investments Sam is recommending in either small-cap stocks or cryptocurrencies, take a 30-day trial of his small-cap investment advisory Australian Small-Cap Investigator here, or a 30-day trial of his industry leading cryptocurrency service, Sam Volkering’s Secret Crypto Network here.

But that’s not where Sam’s talents end. Sam specialises in finding new, cutting edge tech and translating that research into how the future will look — and where the opportunities lie. It’s his job to trawl the world to find, analyse, research and recommend investments in the world’s most revolutionary companies.

He recommends the best ones he finds in his premium investment service, Revolutionary Tech Investor. Sam goes to the lengths of the globe and works 24/7 to get these opportunities to you before the mainstream catches on. Click here to take a 30-day no-obligation trial of Revolutionary Tech Investor today.

Websites and financial e-letters Sam writes for:


Money Morning Australia