4 Ways to Avoid a Honey Pot in Crypto
If it smells like honey but stings like regret, it’s probably a crypto honeypot.
With the recent incident involving CBEX, a platform that promised 100% returns in just 35 days without any losses, it’s hard not to be skeptical about investment schemes. What started as a golden opportunity quickly turned into a nightmare. Investors found themselves unable to withdraw their funds after buying in.
The project looked clean. The returns sounded tempting. But beneath the surface was something more sinister. This is a classic example of a honeypot scam.
Before you consider ditching all crypto investments or stepping away from the financial market entirely, take a pause. The truth is, crypto has its fair share of rug pulls and scams, but it also holds real opportunities for financial growth. You just need to know what to avoid, and a honeypot should be at the top of that list.
What is a Honeypot in Crypto?
At first glance, it looks like the perfect investment. You see green candlesticks shooting upward, no sign of red flags. Everything feels right.
But here’s the trap: once you put your money in, you can’t get it out.
In crypto, a honeypot is a scam project, usually built around a smart contract or token, that allows users to deposit funds but prevents them from withdrawing. These projects often appear legitimate. They can have professional websites, slick tokenomics, and even some real trading volume. But they’re designed with one purpose: to trap your funds and lock them away forever.
You’ll often realize the truth too late when your crypto is stuck and there’s no support, no developers, and no way out.
To avoid this fate, you need to be alert and informed. So, here are four ways to spot and avoid a honeypot.
4 ways to spot and avoid a honeypot
1. Do thorough research on the project
Don’t just rely on hype or social media buzz.
Look into the project's whitepaper, roadmap, and team. Is the team doxxed and publicly verifiable? Do they have any history in crypto or other reputable ventures? A solid project should be transparent with its leadership and technical foundation. If you can't find real information or the team hides behind aliases, that's a red flag.
Also, check where the token is being discussed. Is it only being pumped on Telegram groups or anonymous forums? Or is it gaining traction across trusted crypto communities?
2. Analyze the smart contract functionality
Like the saying, "the devil is in the details."
Many honeypots are written with intentional backdoors or restrictions on token transfers and withdrawals. If you're technically inclined, review the smart contract yourself or use tools like HoneyPot.is, DexTools, or Token Sniffer to analyze the contract.
Watch out for:
- Functions that disable selling or only allow specific wallet addresses to withdraw.
- Contracts that lack liquidity removal protection.
- High transaction fees hidden in the code (some are as high as 99%).
If it looks too good to be true, suspicious, or too complex, walk away. No real project makes it hard to understand how your funds move or are generated.
3. Check for smart contract audits
Legit projects know that trust is currency, and that’s why reputable teams invest in third-party audits from firms like Certik, PeckShield, or Hacken. These audits go deep into the smart contract code to look for vulnerabilities, including honeypot behaviors.
If the project hasn’t been audited or only shows a self-published “audit” with no verifiable source, that’s a red flag. Even better if the audit is publicly available and includes detailed results. So, if you come across a project with no audit, take it as your cue to walk away.
4. Test with a small amount (but be smart about it)
If you’re still curious after doing all your research, test cautiously. However, note that you shouldn't invest money you cannot afford to lose.
Buy with a very small amount, then try to sell or withdraw immediately. If the transaction fails or the slippage is extreme, stop right there. That’s a strong signal that the contract is restricting withdrawals.
But be warned, some honeypots allow small trades to go through, only to trap larger ones. So, while this tactic can help, it’s not foolproof. Combine it with other methods for full protection.
David Adubiina
Conclusion
The crypto space is both exciting and risky. While innovation brings new opportunities, scams like honeypots are constantly evolving to trick unsuspecting users. CBEX is just one of many stories. There will be others. But that doesn’t mean you have to fall victim.
Protecting yourself doesn’t require a PhD in blockchain. Just do the basics: dig into the project, scan the smart contract, check for real audits, and never ignore the chatter in crypto communities. The red flags are usually there, you just have to be paying attention.
So, stay sharp. Ask questions. Be that person who double-checks everything– because in crypto, it’s not just about gains, but more about surviving the scams long enough to enjoy them.
