How to Invest in and Use Crypto Safely

By Amdan Naturinda, Certified Ethical Hacker (Cybrary) and founder of Amdan.pro

Key takeaways

• Most crypto victims are not hacked. They are persuaded, usually by someone they met online.
• Transactions are irreversible, so prevention is the only reliable protection.
• Never share your seed phrase, verify every link and address, and test with a small amount first.
• Anyone who charges a fee to “recover” lost crypto is almost certainly another scammer.

I was listed among blockchain investors at the World Blockchain Roadshow Middle East and certified in crypto investing. Since then, my ethical-hacking work has meant studying how fraud against crypto users actually happens, so I can help people avoid it. I’ve also written about using Bitcoin for five years as a payment and savings tool. This guide is the safety side of that story.

Why crypto attracts fraud

Crypto’s strengths are also its risks. Transactions are fast and irreversible, there is no bank to call for a chargeback, and decentralization means no single authority can freeze a stolen payment. Fraudsters know this.

The data backs it up. In 2025, Americans filed 181,565 crypto-related complaints with the FBI’s Internet Crime Complaint Center, reporting losses above $11 billion, up 22% from the year before (HSToday, ASIS). Crypto investment fraud was the single largest source of losses at $7.2 billion. These scams typically begin on social media, text messages, ads or dating platforms, show victims fake profits, then demand taxes and fees when they try to withdraw (Fox 5 NY).

The FBI also logged 22,364 AI-related complaints costing nearly $893 million, with scammers using fake profiles, voice clones and convincing videos of public figures or loved ones. Its Operation Level Up has notified more than 8,000 people who were mid-scam and reduced losses by over $500 million.

The most common scams

• Phishing and fake wallets: cloned websites and apps built to capture your login or seed phrase.
• Rug pulls: projects that raise money on hype, then vanish.
• Pig-butchering and romance scams: a stranger builds trust over weeks, then steers you to a “guaranteed” investment platform.
• Fake exchanges and “support” agents: impersonators who contact you after you post a problem publicly.
• SIM swaps: attackers hijack your phone number to intercept SMS codes.
• Recovery scams: fake law firms or officials offering to retrieve lost funds. The FBI received more than 10,500 such complaints, with about $1.4 billion in losses.

Your prevention checklist

1. Never share your seed phrase. No legitimate company, exchange or support agent will ask for it.
2. Use a hardware wallet for any meaningful amount, and store the recovery phrase offline.
3. Turn on authenticator-app 2FA. Avoid SMS codes where possible.
4. Verify everything. Bookmark official sites, check URLs character by character, and confirm contract addresses from official sources.
5. Use reputable platforms, and for peer-to-peer trades use escrow with identity-verified counterparties. I cover the mechanics in The African Investor’s Guide to Bitcoin.
6. Test small first. Send a small amount before any large transfer.
7. Separate your accounts. Use a dedicated email for crypto and unique passwords in a password manager.
8. Keep devices updated and never sign transactions on public Wi-Fi.
9. Be careful with yield products. Returns paid by a platform carry platform risk, so never put everything in one place.
10. Diversify and invest only what you can afford to lose.

Red flags that should stop you immediately

• Guaranteed or unusually high returns
• Pressure to act fast or keep it secret
• Unsolicited messages offering opportunities or help
• Requests to move the conversation to Telegram or WhatsApp
• Anyone asking you to “verify” or “sync” your wallet
• Being told to pay a fee or tax before you can withdraw your own money
• A video or voice message from a public figure or relative asking for crypto (deepfakes are now convincing)

If you’ve been targeted

1. Stop all further payments. Scammers often return with “recovery fees.”
2. Secure your accounts. Move remaining funds to a new wallet and change passwords.
3. Document everything: wallet addresses, transaction IDs, screenshots and messages.
4. Report it to the exchange involved and your local cybercrime authority. In the US, use the FBI’s IC3.
5. Beware recovery scams. Anyone promising to get your funds back for an upfront fee is almost certainly another fraudster.

A note for investors in Bahrain and Uganda

Bahrain. The Central Bank of Bahrain regulates crypto trading, dealing, advisory, portfolio management, custody and exchange services through its Crypto-asset Module, first issued in February 2019 and amended in April 2023. Confirm a platform is CBB-licensed before depositing. The rulebook also distinguishes wallet types: with custodial wallets you can lose assets if the provider is hacked or stops operating, while non-custodial wallets give you full control (Mondaq overview).

Uganda. The government has stated that it does not recognize any cryptocurrency as legal tender, has not licensed anyone to sell or facilitate crypto trading, and that holders have no consumer protection (Ministry of Finance statement). Bank of Uganda has also warned licensed payment providers not to facilitate crypto transactions such as conversions to mobile money (Daily Monitor). In a recent speech published by the BIS, the Bank described its stance as prudence rather than prohibition, a pause while an enforceable framework is built. Rules are still evolving, so check the current position before you transact.

Further reading

• The Age of Cryptocurrency by Paul Vigna and Michael J. Casey (St. Martin’s Press, 2015) explains Bitcoin’s origins and its promise for the unbanked, while acknowledging its reputation for volatility and illicit use.
• Life After Google by George Gilder (Regnery Gateway, 2018) argues that blockchain architecture will end the aggregate-and-advertise model of the internet. It is a visionary and contested thesis, best read as context rather than a safety manual. It connects to a shift I explore in Beyond Search.

More in my Investing and Investment Book Reviews categories.

Frequently asked questions

Can stolen crypto be recovered?

Rarely. Transactions are irreversible, so report immediately to the exchange involved and your local cybercrime authority, and avoid anyone who charges upfront fees to recover funds.

Is a hardware wallet safer than keeping crypto on an exchange?

For meaningful amounts, generally yes, because you control the keys. The trade-off is that you are solely responsible for protecting your recovery phrase.

Is crypto legal in Uganda?

Uganda does not recognize crypto as legal tender and has not licensed anyone to sell it or facilitate trading. The central bank says it is building a framework, so check current rules.

Final thought

Crypto rewards people who do their own research and treat security as a habit. Slow down, verify, and never let urgency make your decisions. If you want help building safe, compliant systems around digital payments in your business, you can book a discovery consultation.

References

1. FBI Internet Crime Complaint Center, 2025 Internet Crime Report (ic3.gov); coverage by HSToday, ASIS and Fox 5 NY.
2. Central Bank of Bahrain, Rulebook Volume 6, Crypto-asset Module (CRA); Mondaq.
3. Uganda Ministry of Finance, Statement on crypto-currency; Daily Monitor; BIS central bankers’ speech.
4. Vigna, P. and Casey, M. J. (2015). The Age of Cryptocurrency. St. Martin’s Press.
5. Gilder, G. (2018). Life After Google: The Fall of Big Data and the Rise of the Blockchain Economy. Regnery Gateway.

This article is for educational purposes only and is not financial or legal advice. Crypto assets are volatile and carry significant risk.