7 Common Crypto Scams and How To Avoid Them

7 Common Crypto Scams and How to Avoid Them

With the crypto market booming, crypto scams are getting worse and more sophisticated. But don’t worry — we’ve got you covered. We will expose how these common scams work and how to avoid them.

Investment Get Rich Quick Scams

Investment_' Get Rich Quick Scams

Scams Investment or “Get Rich Quick” frauds have been around for a long time and are not unique to the cryptocurrency field. However, con artists use the fact that bitcoin wallets are anonymous and transactions cannot be reversed to steal money.

These cons might appear in a few different guises. One of the most popular includes the con artist contacting individuals in cryptocurrency communities via instant messaging or social media and pretending to represent a particular site.

Scammers may frequently modify search engine optimization (SEO) results and advertising for their platforms. They may also employ realistic-looking websites to deceive as many users as possible. Their goal is to attract as many users as possible who are not on guard.

Scammers will typically ask victims to put up money in exchange for implausibly high returns and purportedly assured. Some users may invest due to FOMO (fear of missing out).

Scams of this kind can take place on any scale, from the perpetrators stealing small sums from many victims who are taken in by the con to cons involving big investments.

Measures to Avoid Get Rich Quick Scams

  • Before investing your money, you should conduct your research using reputable sources.
  • If an investment opportunity seems too good to be true, there’s a good chance it isn’t.
  • Make sure the website you are viewing is authentic and that the URL has not been tampered with in any manner to make it appear the same as the URL of the legitimate website.
  • Take special note of the very final portion of the URL. 

Scams Based on Phishing

Another con has been around since the beginning of the Internet and has subsequently been updated to work with cryptocurrencies.

In this type of con, a user is said to have been “phished” after being contacted by a platform that gives off the impression of being trustworthy — regardless of whether the victim is already using the platform or not — or one of its representatives in a way that appears to be very convincing to the untrained eye.

Phishing attacks can occur via phone calls, text messages, instant messaging apps, social media platforms, and email. Phishing scammers frequently develop complex clones of the organization’s profiles, websites, and emails they seek to impersonate. 

Because of this, it can be difficult for people to quickly recognize such outreach as being a scam. Phishing attempts are made to trick users into clicking on a link or providing their credentials so that the attacker can access the user’s accounts and possibly steal their money.

Phishing emails and phone calls often contain offers, such as a new promotion. Other times, these communications scare users into clicking on a link or supplying sensitive information by claiming that their account has been compromised and that they need to reset their credentials immediately, secure their account, or transfer their funds.

The following are some examples of phishing attempts:

  • Emails that are part of a phishing scam demand fast action on your part to revive your account or risk having your money stolen.
  • Emails sent in the name of phishing claim returns that are impossible to achieve on a new offer, promotion, product, or service.
  • Messages are sent via instant messaging apps or social media from individuals who pretend to work for a cryptocurrency service, project, or platform, ostensibly to assist the user with a problem they are having with their account.
  • Phishing links that ask users to enter their wallet private key or secret recovery phrase under the guise of “connecting their wallet,” “validating/activating their wallet,” “qualifying for a free airdrop,” or “resolving a technical issue” are examples of these types of connections.
  • Phishing calls demand the user to make payments or disclose sensitive information, such as login credentials or financial information. Phishing phone calls that need the user to make payments or provide sensitive information
  • If you are the target of a phishing effort, you are obligated to report it to the relevant platform through the proper means provided by that platform (e.g., customer support).

Taking the Following Precautions Will Help You Avoid Phishing Scams

  • Reputable platforms such as Crypto.com use anti-phishing codes, and phrases you may set to be appended to interactions between you and the platform. These codes can protect you from being a victim of phishing. Assume that the email is fraudulent if it does not contain such a word and was not sent by the sender.
  • Entering your credentials outside the official apps and official websites is strictly forbidden. You should navigate to the website directly from your browser rather than using the URL provided.
  • If someone contacts you through a messaging app, social media, or even the phone, you should immediately assume that they are not a genuine representative of the platform and refrain from providing them with any sensitive information, passwords, or personally identifying information (PII) (personally identifiable information)

Fraudulent Withdrawal and Transfer Schemes

Fraudulent Withdrawal and Transfer Schemes

When perpetrating one of these cons, the con artist will tell the victim that they cannot withdraw or transfer funds and will ask for the victim’s assistance in exchange for a portion of the money.

This con can manifest itself in a few different ways. For example, the con artist may request assistance with withdrawing actual funds (for example, USDC or USDT tokens) from a wallet that the con artist controls. The con artist may even give the survivor access to the wallet, claiming they are having trouble withdrawing funds from it.

In most cases, the wallet credentials will be correct; nonetheless, the withdrawal will be impossible since there are insufficient funds to cover the gas expenses (e.g., ETH on Ethereum and CRO on Cronos).

Unaware of the scam, the victim will send cryptocurrency to the wallet to retrieve monies. They have yet to learn that the con artist has programmed a bot to watch over the wallet and automatically remove any cash sent to it at a rate significantly faster than any person could do it manually.

Alternatively, they may claim to be located in a nation that prohibits cryptocurrency and ask for assistance in purchasing cryptocurrency on behalf of the individual in exchange for cash. In this version of the story, the victim purchases the cryptocurrency and sends it, only to have the remittance they got reclaimed from them (since it was transmitted using fraudulent cards or accounts) or to have never received a remittance at all.

Methods to Help Prevent Fraudulent Money Transfers

  • You should steer clear of any “under the table” activities, regardless of how simple or lucrative they appear, because you risk losing money or getting in trouble with the laws in effect in your region.
  • If someone gives you the seed phrase to a wallet and instructs you to take whatever is in it, you should question yourself, “Is this too good to be true?” because the person may be trying to scam you.

Romance Scams

Another type of classic con that has made its way into the cryptocurrency industry is romance fraud. A con artist will build a relationship with someone they have met online to pull off this con. 

In most cases, the connection progresses rapidly, and the con artist will swiftly declare their love for the victim. A red flag may be raised if the con artist refuses to engage in video chats under any pretext, even if it is to blame on a poor Internet connection.

As soon as the con artist has a firmer grasp on the victim, they will typically employ strategies to extract money from them, such as isolating themselves and, when questioned, claiming it is because of financial hardship or because they are caring for a sick family member who requires therapy that they cannot afford.

In other instances, they express a desire to see the victim but cannot do so due to the high cost of travel. In every instance of this particular con, the con artist will pretend to be in desperate need of financial assistance while simultaneously promising reimbursement that will never materialize.

Taking the Following Precautions Can Help You Avoid Romance Scams:

  • If you encounter someone whose behavior fits the description given above, try to think about it logically rather than emotionally.
  • The fact that you have never seen the person throughout your entire relationship, not even on a video conversation, is a warning sign for scammers.
  • Another red flag that may point to this kind of deception is the rapid development of a relationship between the parties.
  • By doing a reverse image search, you can check to discover if the con artist is stealing someone else’s identity.
  • Scammers frequently demand that money be sent to them through cryptocurrencies or other non-traceable financial instruments, such as prepaid or gift cards, to conceal their identity and location.

Pig Butchering Scams

Pig Butchering Scams

As the “arms race” between con artists and the general public continues, con artists continuously develop new methods to defraud their victims. The romance fraud and the investment scam have been creatively combined in the pig slaughtering hoax.

A con artist will contact a victim via online dating, social media, or online communities and build a romantic relationship with them to pull off a pig-butchering fraud. Pig butchering scams are also known as catfishing.

Once the scammer has “earned” the victim’s trust, rather than asking for money for themselves, their sick parent, or a plane ticket to see the victim, they will encourage the victim to put money in digital currencies as a means toward financial freedom rather than asking for money for themself, their sick family, or a flight ticket to see the victim.

The victim, who typically has minimal to no prior expertise with cryptocurrencies, will ask the con artist for assistance in choosing a reliable investment platform.

The victim is then led to a fraudulent platform where they are encouraged to invest their money, which puts an end to the con. Once the victim has given the con artist the maximum amount of money that the con artist believes they can obtain from the victim, both the con artist and the false platform will vanish.

This con is distinguished from others in that it typically takes place over a protracted period, facilitating the development of trust between the parties involved. The con artist will frequently direct the victim to use a platform unrelated to the con artist to deceive the victim.

The con artist may even tell a victim who has already invested money into their scam that they have already made great gains on their original investment to deceive the victim into deploying extra capital.

Taking the Following Precautions May Assist in Avoiding Pig Butchering Scams:

  • Avoid putting your money into unidentified, uncontrolled, and unreliable platforms.
  • Tell the person that you do not have any extra money to invest and are not interested in investing in cryptocurrencies; if they vanish, it is likely to indicate that their intentions are not real.
  • Do not succumb to the fear of missing out (FOMO) and invest, especially when returns are “guaranteed” or unreasonably large.

Rug Pulls

Rug pulls are a type of cryptocurrency-specific scam. They are also one of the most difficult to detect because of how intricately they are manufactured.

Rug pulls typically take the shape of a new cryptocurrency project, such as a decentralized finance (DeFi) platform or project, or in some cases, an NFT project. Rug pulls can also take the form of a new NFT project.

At first sight, many projects may appear legitimate due to elements such as websites that have a professional appearance, white papers, roadmaps, and even substantial online communities.

The initiative begins with the promise of being the next big thing in the industry. Swindlers will begin pushing the project and use their own money to make purchases to inflate the product’s price artificially. People afraid of missing out (FOMO) rush to make purchases. Amid the frenzy, the project demand drives up the associated asset’s price.

Rug pulls frequently take a significant amount of time. Once there is sufficient exit liquidity in the project, the con artists will sell their assets, then “dump” them on the retail users, leaving them with tokens or NFTs worth very little or nothing.

The phrase “rug pull” refers to how quickly this occurs, giving the impression that the rug is being yanked out from under the unknowing buyers. In many instances, the development team quits working on the project and then vanishes, never to be seen or heard from again.

Precautions to Prevent Rug Pulls

  • Always look into things on your own. Examine the project’s white paper to see whether it is an exact copy of the white paper for another project.
  • Look for the team working on the project. Are they doxxed, which means that their identity has been made public, or are they anonymous? The latter is a warning sign.
  • Watch out for investments that claim returns that are impossible to achieve.
  • Is there proof to support the project’s claims of partnerships or affiliations with respected organizations if the initiative makes such claims?



The practice of cryptojacking is a form of computer hacking in which a perpetrator steals the computational resources of an unknowing victim to mine bitcoin on the perpetrator’s behalf. During the cryptocurrency surge in 2017, also known as the “crypto boom,” cryptojacking became a widespread problem as the value of bitcoin, and other cryptocurrencies skyrocketed in price. It is also known as “malicious crypto mining.”

It is necessary to have both specialized hardware and a significant amount of computational power to mine bitcoin, which comes at a very high cost. The process of cryptojacking, on the other hand, can be carried out with minimal effort and expense, and it can be quite lucrative.

To begin illegally mining cryptocurrency, hackers must insert a few lines of JavaScript code into a vulnerable device. Viruses, phishing, unpatched vulnerabilities, harmful online adverts, insecure browser extensions, and infected apps are all examples of tactics that cybercriminals use.

When a device is infected with cryptojacking malware, a script is executed on the victim’s device without the victim’s agreement or knowledge. This script then sends any bitcoin mined to a digital wallet under the hacker’s control. Consequently, the hacker can compete against very complex crypto-mining operations while incurring minimal risk and avoiding the expense of overhead.

Indicators that indicate you may have been a victim of cryptojacking include:

  • Slower computer reaction times.
  • Greater processor utilization.
  • Overheated devices.
  • Poor battery performance.
  • Higher electricity bills for no apparent reason.
  • Install software only from reputable sources to reduce your risk of being victimized by cryptojacking.
  • Make sure that all the software and devices already in use have the most recent updates, patches, and fixes.
  • Phishing emails and messages can be avoided by remaining vigilant and never clicking on links you are doubtful of.
  • Consider installing ad blockers in your browser and turning off JavaScript.


Although the cryptocurrency space is very young, these scams have been around for a while. There are many more, but these are the most commonly seen. The best advice is to invest only what you can afford to lose and become aware of how these types of scams operate before something happens to you that could have been avoided by heeding the warnings and advice presented here.

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