The 2024 U.S. election has concluded, with Donald Trump securing 312 electoral votes—well above the 270 needed—to become the 47th president of the United States, set to take office on January 20, 2025. In the wake of this political shift, Bitcoin surged to an all-time high of $93,265.64, accompanied by trading volume exceeding $7.3 billion. This rally has drawn a wave of new investors into the cryptocurrency market, many eager to capitalize on rapid price gains.
Yet, as digital asset interest grows, so too do the risks. Sophisticated scams are on the rise, preying on inexperienced traders. To help navigate this volatile landscape, Lu Wei-Yuan, Chief Prosecutor at Shilin District Prosecutors Office in Taiwan and expert in financial crime investigation, shares essential advice: DYOR—Do Your Own Research—and stay vigilant against fraudsters.
Essential Tips for New Crypto Investors
With extensive experience in financial crime prosecution—including work at Harvard University and certification from TRM Labs as a senior cryptocurrency investigator—Lu emphasizes three foundational principles for anyone entering the crypto space.
1. Practice DYOR: Do Your Own Research
"Markets are full of traps," warns Lu. "Beginners who don’t do their homework can easily fall into criminal schemes."
DYOR isn’t just a slogan—it’s a survival strategy. Relying on influencers or unverified tips can lead to devastating losses. Instead, investors should consult reputable news sources, analyze whitepapers, study tokenomics, and understand blockchain fundamentals before investing.
👉 Discover how to conduct deep crypto research like a pro
2. Choose Regulated Domestic Exchanges
To reduce risk, Lu recommends using exchanges approved by Taiwan’s Financial Supervisory Commission (FSC). These platforms appear on the official list of Virtual Asset Service Providers that have completed anti-money laundering (AML) compliance declarations.
While inclusion on this list offers basic protection, it doesn’t guarantee full legitimacy. Investors must still exercise caution and verify platform credibility independently.
3. Be Wary of Overseas Exchanges and Influencer Endorsements
Foreign exchanges often offer more tokens and higher leverage—but come with greater risk due to lax oversight. Many operate outside Taiwan’s legal jurisdiction and lack transparency.
Lu highlights the danger of KOLs (Key Opinion Leaders) promoting offshore platforms without disclosing risks or financial incentives. He advocates for clearer advertising regulations: influencers should label promotions as ads and disclose potential conflicts of interest.
“Scammers exploit trust in celebrities. Investors must sharpen their judgment,” says Lu.
Common Crypto Scams: 6 Tactics to Recognize
Fraudsters continuously evolve their methods, targeting both emotional triggers and knowledge gaps. Here are six prevalent scam types—and how to avoid them.
1. Unrealistic Returns
Promises of “guaranteed” high yields are red flags. Platforms like FTX and JPEX collapsed after luring users with unsustainable interest rates.
Rule of thumb: If returns seem too good to be true, they probably are.
2. Bitcoin ATM Scams
Scammers contact victims via social media, guiding them to deposit cash into Bitcoin ATMs and send BTC to attacker-controlled wallets. Once transferred, funds are nearly impossible to recover.
Always verify the recipient’s identity before making any transaction.
3. Investment Fraud Schemes
Fake “investment advisors” provide wallet addresses for victims to deposit crypto. The victim loses control immediately—and often only realizes after it's too late.
Never transfer assets to someone else’s wallet based on verbal promises.
4. Money Mule Accounts
Criminals recruit individuals to open bank or exchange accounts used to launder stolen funds. Victims may receive small payments for participation but face legal consequences.
Warning: Sharing your account details—even for “easy money”—can make you complicit in financial crime.
5. Air Coins (Rug Pulls)
“Air coins” are fake tokens with no utility or backing. Organizers create hype through coordinated marketing, then vanish after raising funds.
Examples include IBCOIN and Magic Token scams. Regulatory bodies like the FBI have begun cracking down, but prevention starts with investor awareness.
6. Meme Coin Volatility
While not always fraudulent, meme coins like Dogecoin or Shiba Inu carry extreme volatility. Prices can crash overnight based on sentiment or whale manipulation.
Lu notes that meme coin traders are typically not beginners—but newcomers should understand these assets are speculative, not investments.
What to Do If You’ve Been Scammed
Panic helps no one. Follow these four steps immediately:
- File a Police Report
Contact local authorities or dial Taiwan’s anti-fraud hotline at 165. - Stop All Transfers
Halt further transactions and freeze accounts if possible. - Preserve Evidence
Save chat logs, transaction IDs, screenshots, and emails. Do not delete anything. - Avoid Recovery Scams
Beware of companies claiming they can “recover” lost funds—for a fee. These are often second-layer scams targeting victims again.
👉 Learn how secure platforms detect suspicious activity early
Building a Three-Layer Defense Against Crypto Fraud
Prevention is better than prosecution. Lu outlines a comprehensive framework involving education, regulation, and institutional cooperation.
1. Investor Education
Knowledge is the first line of defense. Public awareness campaigns, school programs, and accessible resources can significantly reduce victimization.
Key focus areas:
- Recognizing phishing attempts
- Understanding wallet security
- Verifying project legitimacy
2. Regulatory Action and Policy Development
Taiwan’s upcoming VASP (Virtual Asset Service Provider) registration regime will require exchanges to comply with AML rules starting December 2025. Lu urges faster implementation of clear regulations to foster innovation while protecting users.
Stronger oversight can deter bad actors and build market confidence.
3. Bank and Exchange Collaboration
Financial institutions must play an active role. Banks should monitor unusual outflows—such as sudden large transfers to crypto platforms—and flag or pause suspicious transactions.
Exchanges can implement real-time anomaly detection and share threat intelligence with banks and regulators.
“Only through joint efforts can we intercept illicit flows and protect ordinary users,” says Lu.
Frequently Asked Questions
Q: Is Bitcoin legal in Taiwan?
A: Yes, Bitcoin and other cryptocurrencies are legal for trading and investment in Taiwan, though regulated under anti-money laundering laws.
Q: How can I check if an exchange is trustworthy?
A: Look for FSC-compliant platforms listed on the official AML declaration roster. Avoid platforms with anonymous teams or unclear licensing.
Q: Can stolen crypto be recovered?
A: Recovery is difficult but not impossible. Law enforcement may trace blockchain transactions, especially if exchanges cooperate internationally.
Q: Are all meme coins scams?
A: No—but most lack intrinsic value. Treat them as high-risk speculation rather than long-term investments.
Q: Should I trust influencers promoting crypto projects?
A: Approach with skepticism. Verify claims independently and check if endorsements are disclosed as paid promotions.
Q: What does DYOR really mean in practice?
A: It means reading whitepapers, analyzing code repositories (like GitHub), checking community sentiment, reviewing team backgrounds, and understanding token distribution models before investing.
Staying safe in crypto requires diligence, skepticism, and continuous learning. As Bitcoin reaches new highs in 2025, now is the time to strengthen your defenses—not just against market swings, but against those who seek to exploit them.
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