Your crypto due diligence checklist

Planning to buy or exchange crypto for the first time? There are a few things you need to know before diving headfirst into the world of digital currency. We’ve put together a crypto due diligence checklist to help you choose wisely and stay safe out there.

1) Do your research

This may seem obvious, but it’s often overlooked by eager crypto fans – you’ve got to do your research. We’re talking the tokens you’re considering, the current market conditions, the relevant blockchains – the works. The more you know about what you’re buying, who you’re buying from and how much you’re paying, the smoother your experience will be.

But where do you start? Finding reliable sources online can sometimes be tricky, since the industry is so vast and there are so many people putting out information. But well-known, respectable crypto companies (like Wirex) usually have educational blogs and forums which you can rely on for up-to-date, accurate information. There are also plenty of online courses out there, if you’re willing to put in a bit of time, or tutorials on all things crypto that you can watch for free on YouTube.

When it comes to researching a particular coin, there are a few things to find out: a bit about the company behind it (including who founded it), what its online presence is like and what other people are saying about it, its intended purpose, whether they have funding and who is backing them, the total volume of coins and its market cap. Knowing all this should stand you in good stead.

2) Stay savvy to scams

It’s a sad fact of life that scammers are all around. But luckily, there are a few things we can do to spot them – and steer well clear of them.

A common crypto scam is the classic free token giveaway, which usually involves the promise of an airdrop to your crypto wallet if you click on a certain link. When it comes to this kind of scam, it’s important to remember the golden rule: if it sounds too good to be true, it probably is.

It isn’t always that simple though – some modern-day crypto scams are pretty convincing, with scam artists using increasingly sophisticated means to con us. That’s why we’ve put together some handy guides to spotting them, which you can check out here and here.

In short, Wirex will never ask you for your login details, bank details or any other personal information. We never shorten links (we only ever use, or, hold airdrops, ask you to send us any money to solve issues with your account or contact you directly on social media. If you’ve won a real Wirex competition, we’ll announce it in the same channel that the competition is hosted in, tag you in the post and ask you to contact us to claim your prize.

3) Only buy what you can afford to lose

It’s no secret that the crypto market is a volatile one, so it’s best not to take out a second mortgage on your house to blow on bitcoin (yes, people have done this – you can imagine how it ended). It’s advisable to start with small amounts and make sure you never buy more than you can afford to lose.

4) Be prepared to make mistakes

Lastly, you’ve got to be prepared to mess up on the odd occasion. As long as it’s not on quite the same scale as those mentioned in the point above… But you wouldn’t be a true rookie without making some rookie mistakes, so try not to fret about minor issues like forgetting to add a destination tag, or confusing XRP with XLM. It happens to the best of us, and will hopefully reinforce our earlier point about – you guessed it – the importance of prior research.


Very useful checklist for newbies :+1: