Coin Market Cap Scams: Types and Warning Signs

Coin market cap scams are a serious issue in the cryptocurrency world. Scammers often use fake or manipulated market data to lure investors into buying or selling certain coins.

These scams can take many forms, including pump and dump schemes, fake ICOs, and Ponzi schemes. In a pump and dump scheme, scammers artificially inflate the price of a coin by spreading false information.

Investors who fall for these scams can lose a significant amount of money. According to a study, the average loss per victim of a pump and dump scheme is around $10,000.

Scammers often use social media and online forums to spread false information and recruit new victims. In one case, a scammer created a fake Twitter account to promote a fake coin, which resulted in a loss of over $1 million for the investors who bought in.

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A Ponzi scheme is a type of scam that pays older investors with the proceeds from new ones, with the promise of huge profits and little risk.

This scheme runs in circles, with no legitimate investments, and the main lure is the promise of huge profits with little risk. There are always risks with these investments, however, and there are no guaranteed returns.

The Adam brothers' Ponzi scheme in 2024 is a prime example, promising 13.5% monthly returns by claiming their bot could exploit price differences on cryptocurrency exchanges, but using the $60 million raised to buy luxury purchases.

Ponzi schemes are a type of scam that promises huge profits with little risk, but always comes with hidden risks and no guaranteed returns.

In a Ponzi scheme, older investors are paid with the proceeds from new ones, creating a cycle that relies on attracting fresh investors for money. This is a classic example of a scam that runs in circles.

The main lure of a Ponzi scheme is the promise of huge returns, often in the form of monthly returns, such as 13.5% like the one promised by the Adam brothers in 2024. They claimed their bot could exploit price differences on cryptocurrency exchanges.

The Adam brothers' scheme was a prime example of a Ponzi scheme, raising $60 million from investors before being charged by the SEC for violating antifraud provisions of the federal securities laws.

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Scam websites are a major threat online, and it's essential to be aware of the tactics they use to deceive users. Scam websites often mimic legitimate websites, making it difficult to distinguish between the two.

They can be created using various techniques, including malvertising, social media spam, and hacked legitimate sites. Malvertising can be found on even the most reputable websites, making it a significant concern.

Some scam websites are poorly crafted, filled with spelling and grammatical errors, while others are more sophisticated and even perfectly mimic existing websites. This is why it's crucial to exercise caution when browsing and investing online.

Common techniques used to promote scam websites include intrusive pop-up ads, social media spam, and webpages that utilize rogue advertising networks. These tactics can be found on a variety of platforms, including social media, forums, and even legitimate websites.

To avoid visiting scam websites, be wary of ads and be selective when allowing webpages to deliver browser notifications. Ignore or deny requests to display notifications from suspect pages.

Here's a list of red flags to watch out for:

By being vigilant and aware of these tactics, you can significantly reduce the risk of falling victim to scam websites.

Scammers often pose as amateur traders, claiming they've accidentally left large amounts of stablecoins, like USDT, in wallets on the Tron blockchain.

They'll even share the seed phrases, making it appear easy to access the funds, sometimes as much as $8,000.

Social engineering is a sneaky tactic used by scammers to trick people into giving up their money or personal info. It's a common thread in many coin market cap scams.

Romance scams, for example, use social engineering to build trust with victims before convincing them to invest in cryptocurrency. These scams cost consumers $1.179 billion in 2023, according to the FTC.

Scammers also use fake celebrity accounts to promote cryptocurrency giveaways on social media, luring people in with promises of free bitcoin. However, when victims click on the giveaway, they're taken to a fraudulent site asking for verification, which often involves making a payment to prove the account is legitimate.

The goal of social engineering is to manipulate people into doing what the scammers want, often without even realizing it.

Scammers often impersonate recruiters or job seekers to gain access to cryptocurrency accounts. They may offer a job but require cryptocurrency as payment for job training.

North Korean IT freelancers are targeting cryptocurrency companies by presenting fake resumes and claiming to be based in the U.S. This type of scam is called a shadow workforce.

In 2022, a Sky Mavis engineer was targeted by a shadow worker who posed as a LinkedIn recruiter. The engineer gave the scammer a document to review, which contained malicious code that allowed the North Korean Lazarus group to steal $600 million.

Shadow workers seek projects involving virtual currency and use access to currency exchanges. They then hack into the systems to raise money or steal information for the Democratic People's Republic of Korea (DPRK).

These workers have stolen nearly $3 billion in the past year, according to Chainalysis.

Additional reading: Current Us Currency Coins

Romance scams are a type of social engineering attack where scammers build a relationship with their victims online, often using dating apps.

These scammers typically create a long-distance, online relationship to gain their victim's trust over time.

Romance scams can be referred to as "pig butchering scams", a term that might sound unusual but is a fitting description of how these scammers operate.

In 2023, romance scams cost consumers a staggering $1.179 billion, according to the FTC.

Once the scammer has gained their victim's trust, they'll often convince them to invest in or send money in the form of cryptocurrency.

This can happen quickly, and before the victim knows it, they've lost a significant amount of money to the scammer.

Social media giveaway scams are a common tactic used by social engineers to trick people into handing over their money or sensitive information.

These scams often involve fake posts on social media outlets promising bitcoin giveaways. Some even use fake celebrity accounts to make the offer seem more legitimate.

Victims are lured in by the promise of free money, but when they click on the giveaway, they're taken to a fraudulent site asking for verification to receive the bitcoin.

This verification process typically involves making a payment to prove the account is legitimate, but in reality, the victim is just losing their money.

Opening a scam website can be as simple as clicking on a malicious pop-up ad. These ads can be found on legitimate sites that have been hacked.

Malvertising, specifically intrusive pop-up ads, is a common technique used to promote cryptocurrency drainers. Some of these pop-ups are fully functional drainers themselves.

Social media spam is another prevalent method, where promotional posts and private messages can be made using stolen accounts. We've discovered many examples on the X platform.

Different types of spam, such as emails, browser notifications, forum posts, and SMSes, can also be used to endorse crypto-centered scams.

If you fell for a pop-up scam, the first thing to do is contact your financial institution and explain that you were scammed. If you informed them promptly, there's a chance to get your money back.

You should also change your passwords and enable two-factor authentication in all online services that you use. This will help prevent further damage.

If you let scammers connect to your device, scan your computer with reputable anti-malware as soon as possible. Cybercriminals could have planted trojans, keyloggers, and other malware, so don't use your computer until removing possible threats.

Here's a step-by-step guide to help you recover from a pop-up scam:

Reporting the scam to the Federal Trade Commission can help prevent others from falling victim to the same scam.