The high-stakes poker party that turned out to be a crypto scam
“There are thousands of projects out there. Some are legitimate, and others are not,” Young says. He has also been scammed over the years. After accidentally giving infinite permissions to his Ethereum wallet, Young lost $200,000 to a scammer. He has since built approval protocols for people to protect themselves.
Young tries to avoid scammers today by never using “hot wallets,” digital wallets that are always connected to the internet and allow users to store, send, and receive crypto tokens. Instead, he uses a “hard wallet,” a key that looks like a USB stick and stores account information. He says it adds a second layer of security because you must click a button on the stick and confirm on your computer to complete a transaction.
Young now protects himself by never using phones for crypto trades and instead relies on a dedicated crypto computer used for nothing else—not even email. He won’t connect to unknown websites or click onto sites from links, either. “A lot of times, you’ll get a message on social media, and you connect your wallet to it, and they steal all your money,” Young says.
Young has also heard of people who go to online forums to seek help with their crypto wallets, where scammers offer that help and say they need the “seed phrase” of other’s wallets. This phrase comprises 12 to 24 words that allow users to restore their crypto wallets. With it, the scammers take all their money.
Another of Young’s rules is that he takes all emotion out of any deal and vets crypto deals like any other startup. He wants to know the real people behind the project and ensure they have plenty of experience in tech or crypto. “I ask whether what they’re building has actual functionality in the real world,” he says, “And I run any investment by my CPA.”