Types of Common Crypto Scams

As public interest in cryptocurrencies has risen, so have cryptocurrency scams and frauds. Scammers are always looking for new ways to steal your money, and the massive growth of the cryptocurrency market in recent years has created a lot of opportunities for shady activities.

With stories of people in their 20s and 30s dabbling in cryptocurrencies becoming millionaires overnight, newbies have been eager to get involved.

However, their lack of technical understanding of how cryptocurrencies work and their desire to get “rich quick” (greed) can blind them to the dangers of cryptocurrencies.

Scammers are capitalizing on the cryptocurrency boom and luring gullible people into scams in record numbers.

In 2021, cryptocurrency crime hit an all-time high, with scammers taking$14 billion worth of cryptocurrency, according to blockchain analytics firm Chainaanalysis!

This is a 79% increase from the previous year when fraudsters stole “only” $7.8 billion. Fraud is the largest form of cryptocurrency-based crime (followed by theft).

According to the Federal Trade Commission (FTC), reports of cryptocurrency-related fraud have surged in the U.S., with nearly 7,000 people reporting losses of more than $80 million, with a median loss of $1,900.

Compared to a year ago, the number of reports has increased 12-fold and the amount of money lost has increased by almost 1,000 percent！

What is a Crypto Scam？

A scam is a deceptive scheme or trick used to trick someone out of something.

The scammer will pose as a credible individual or business and try to ask you for money, personal information, or both.

Cryptocurrency scams are similar, except instead of asking for dollars or other fiat currency, scammers will ask for cryptocurrency.

Fraudsters and scammers use a variety of scams to target you to buy and send them cryptocurrency. But the “hook” usually relies on tried and tested methods in non-crypto scams:

• “Don't miss it!”

• “Go to the first floor!”

• “Zero risk!”

• “100% return! Guaranteed!”

Even the promotions are similar: spam texts and emails, social media posts and private messages, online forums, group chat apps, and friend and family contacts.

Unfortunately, the result is the same as if the victim's cryptocurrency is stolen or they end up with worthless “ junk ” coins.

While most cryptocurrency scams are slight modifications of traditional scams, cryptocurrency scams are even more dangerous because Bitcoin and other cryptocurrencies are not regulated by any government, and once transferred, transactions are irreversible.

In the case of bank or credit card fraud, you can usually dispute the transaction with a centralized institution (your bank or credit card company) and get your money back.

But by design, cryptocurrencies are decentralized ...... There is no central authority that can be contacted. If you send cryptocurrency to a third party, you will not be able to undo or cancel the payment. As a result, there are no legal protections or dispute procedures if you are the victim of a cryptocurrency scam. Take too many risks and you will lose everything and then ...... you are on your own.

Types of Crypto Scams

Most Crypto scams tend to fall into two categories:

• scammers trick you into sending cryptocurrency directly to them.

• scammers access your crypto wallet and steal your assets without your permission.



Types of Common Crypto Scams

1.Fake websites and apps

Scammers create fake cryptocurrency trading platforms. They may even create fake versions of real cryptocurrency trading platforms. These fake websites look very similar to the real ones,It can be challenging for novice cryptocurrency traders to differentiate between different currencies, as many of them share similar features and characteristics.

Even the address of the website will be similar but spelled slightly differently. If you deposit a certain amount of money, these sites will entice you with promotional offers such as “free bitcoins” or “deposit bonuses”. Once you sign up and make your initial deposit, you won't be able to withdraw your money, or worse, the site will shut down. Once they have your money, it's gone forever.

2.Phishing scams

Phishing is a social engineering attack that uses emails, phone calls, or texts to trick individuals into providing sensitive information, including passwords, credit card information, and other confidential details about a person or company.



Scammers often try to deceive you by pretending to be someone you know and trust. This can be an individual, such as a friend or family member, or even a representative of a large company. They might send you a message containing a link or attachment and ask you to click on it. If you fall for their trick and click on the link, you will be directed to a fake website that looks exactly like the cryptocurrency exchange or wallet app you use, but in reality, it is a trap. Once you enter your login details, the scammers will have access to your real account and can steal your cryptocurrency. You may be shocked to find out that all your assets have been immediately transferred to the scammer's wallet.

3.Private Message (DM) Scams

Beware of scammers sending you “DMs” (Direct Messages) via Telegram, Discord, Instagram, Twitter, and other social media applications. These messages include “sneak peek” and “alpha” offers with links on how to participate. Do not click on any of the links. These fake accounts are just trying to steal your cryptocurrency. If a stranger introduces you to a new cryptocurrency or crypto project via private message, assume it's a scam.

4.Investment Scams

Investment scams come in different forms, but ultimately, they all try to ask you to “invest” your money in cryptocurrencies and earn huge returns, sometimes with the promise of guaranteed returns and little to no risk. You may receive unsolicited messages from “investment managers” “investment advisors” or “traders”.

If you give them your cryptocurrency, they claim to be able to help you “grow” your cryptocurrency. But in reality, they want to steal your cryptocurrency. Once payment is received, they will stop contacting you and close the website or social media account used to scam you.

5.Romance Scams

In 2021, romance scam victims reported losses of $1 billion. It's the second most lucrative scam on social media (the first being investment scams).



Romance scams are when scammers use the illusion of romance or intimacy to manipulate and steal your money. We contact victims through social media or dating apps like Tinder Bumble and Grindr. It usually begins with a seemingly innocent friend request from a stranger. This stranger adopts a false online identity and uses sweet words to win you over and play with your heart. He or she may seem caring and sincere, but their ultimate goal is to establish a relationship and gain your trust as quickly as possible. Once that's done, the conversation will turn to requests for cryptocurrency or lucrative crypto investment “opportunities”.

6.Giveaway Scams

Giveaway scams are where scammers will post messages on social media, such as Twitter, asking people to send them cryptocurrency with the promise of doubling (or more) the amount you send. These posts look authentic, may mention celebrities involved, and include replies from fake accounts claiming they doubled the money to trick people into thinking the giveaway is legitimate. A link or QR code will be shared to enter the giveaway. When you visit the site, you will be asked to “verify” your wallet address by sending cryptocurrency. Of course, there is no real giveaway, you just “donate” your cryptocurrency to a group of scammers.

7.Ransom Scams

Blackmail is when a criminal threatens to disclose embarrassing information or information that could jeopardize your standing in the community, your family or social relationships, or your career unless you hand over money.

The scammer will send you an email and claim to have evidence that you have visited other illegal websites. This proof will be shared publicly unless you send cryptocurrency or share your mnemonic (or private key). Don't fall for it. Unless your phone or computer has actually been hacked, or you're outdoors in a public area dancing with your butt naked for all to see, the likelihood that the blackmailer has anything is close to zero.

8.Initial Token Offering (ICO) Scams

An Initial Coin Offering (ICO) is the cryptocurrency equivalent of an Initial Public Offering (IPO) of stock.

The big difference is that IPOs take place in a regulated environment and involve private companies with an established operating history, whereas ICOs take place in an unregulated environment, meaning that many of the companies have little to no operating history scammers will promote a new type of cryptocurrency claiming to be the next big thing, share compelling marketing materials, ask people for money to become early investors, and then, once sufficient funds have been raised, they'll take the money to the next level. Once enough money is raised, they disappear with everyone's money.

9.The “Carpet Pulling” Scam

A pull occurs when the creator of a new cryptocurrency project promotes their new token to raise awareness and entice people to buy it on a decentralized exchange (DEX), which increases the demand for the token and causes its price to rise, then disappears with the funds. Those who buy are left with worthless tokens. Similar to the ICO scam, Rug Pulls collected money from early investors but abandoned the program soon after, but Rug Pulls was even shadier. They disappeared with tons of legitimate cryptocurrency, leaving their victims holding worthless tokens.

Crypto newbies can prevent being “pulled” by not buying new tokens and sticking to cryptocurrencies traded on reputable centralized exchanges (CEX).

It is assumed that these centralized exchanges have properly vetted cryptocurrencies before listing them on their exchanges and allowing users to trade them. That said, don't trust the exchanges completely.

10.impersonation fraud

Impersonation fraud is when scammers pose as trusted sources to convince you to complete a cryptocurrency transaction. They'll contact you by phone or email pretending to be government agencies, banks, credit card companies, or service providers, and request that you pay using cryptocurrency.