Cryptocurrency Scams List: Common Types and How to Avoid Them

Cryptocurrency scams are becoming increasingly common, and it's essential to be aware of the types and tactics used by scammers to avoid falling victim. One of the most common types of scams is the Ponzi scheme, where scammers promise unusually high returns on investments.

Scammers often use fake websites and social media profiles to lure victims into investing in cryptocurrency schemes. According to a recent study, over 70% of cryptocurrency scams originate from social media platforms.

It's crucial to be cautious when investing in cryptocurrency and to thoroughly research any investment opportunity before parting with your money. Always verify the authenticity of any investment opportunity by checking for red flags such as unusually high returns or unregistered investment products.

Investors should also be wary of phishing scams, where scammers pose as a legitimate cryptocurrency exchange or wallet provider to steal sensitive information.

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Cryptocurrency scams come in all shapes and sizes, but they generally fall into two main categories.

The first category involves scammers trying to get their hands on your digital wallet or authentication credentials. This can be done through phishing attempts, where they try to obtain sensitive information like security codes.

Some scammers even go as far as trying to access your physical hardware, such as your computer or smartphone.

The second category includes schemes where scammers trick you into transferring your cryptocurrency directly to them. This can be done through impersonation, fake investment opportunities, or other malicious means.

Here are some examples of the types of scams you might encounter:

Phishing and impersonation are two common tactics used by scammers to trick people into giving away their cryptocurrency. Phishing scams have been around for some time but are still popular, with over 300,000 people falling victim in 2022 and 298,000 in 2023, turning over a total of $52.1 million and $18.7 million respectively.

Scammers send emails with malicious links to a fake website to gather personal details, such as cryptocurrency wallet key information. This can be very difficult to spot, especially if the email appears to be from a legitimate service.

Phishing websites often go hand-in-hand with phishing emails, and can be disguised as sponsored results on search engines or in app marketplaces. Do not install software or log in to a website unless you are 100% sure it isn't a fake one.

Impersonators may create social media accounts that look almost identical to the original poster, and use them to trick others into taking some kind of action in an attempt to defraud or compromise. Never participate in free giveaways, and if you receive an odd request via someone in your network, it's best to double check to confirm the authenticity via multiple mediums of communication.

To avoid phishing scams, never enter secure information from an email link. Always go directly to the site, no matter how legitimate the website or link appears.

Be wary of malware programs that can steal your bitcoin by changing the address you're sending to. These programs can be installed on your device and can alter the address even after you've pasted it from your clipboard.

Hackers use stolen email lists and other leaked user information to run blackmail schemes across thousands of people en masse. They claim to have hacked into your computer and recorded you doing something you may not want others to know about.

Malware can be installed on your device with administrator access, making it a good idea to be super-cautious about what programs you allow to have this access. An up-to-date, reputable virus scanner can help but is not foolproof.

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Malware is a serious threat to your digital security. Hackers have become very creative at finding ways to steal from people.

To avoid falling victim to malware, be super-cautious about what programs you allow to have administrator access on your devices. An up-to-date, reputable virus scanner can also help but is not foolproof.

Malware can change bitcoin addresses when they're pasted from a user's clipboard, so that all of the bitcoin unknowingly gets sent to the hacker's address instead. This can't be recovered once the transaction is confirmed by the network.

Be wary of blackmail attempts by strangers who threaten you in exchange for bitcoin. Scammers use stolen email lists and leaked user information to run this scheme across thousands of people en masse.

Blackmailers claim to have a record of adult websites or other illicit web pages you allegedly frequent. This is a criminal extortion attempt and should be reported to a law enforcement agency.

Scammers may send an email claiming they've hacked into your computer and installed a key logger, threatening to release compromising material unless you pay with bitcoin. They may also claim to have recorded you using your webcam.

Blackmailers provide two options: send bitcoin to suppress the material or send nothing and see the content shared with your email contacts and social networks.

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In 2023, a reported $3.9 billion was lost to crypto investing fraud. This staggering amount should be a warning sign for anyone considering investing in cryptocurrencies.

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Legitimate businesses will not correspond with you via social networks or text messages. They will usually have a professional website and contact information.

The most common type of crypto investing fraud involves convincing an investor to transfer cryptocurrency to a new exchange or platform, claiming it has very high returns. Once the investor transfers crypto, the scammers continue to build trust by publishing false high returns on the platform.

Conducting research on every project to learn about the team behind it is crucial. If someone is attempting to scam you, it is likely they have tried it with others.

Search for the cryptocurrency using the word "scam" and see what you find. This simple step can save you from financial disaster.

FTX, a popular cryptocurrency exchange, was found guilty of wire fraud, conspiracy to commit wire fraud, conspiracy to commit securities fraud, conspiracy to commit money laundering, and conspiracy to commit commodities fraud.

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Investment schemes are a common type of cryptocurrency scam.

Ponzi schemes, for example, involve guaranteed returns in exchange for an upfront deposit, but the end result is usually a lot of people losing a lot of money.

The FBI has stated that investment schemes are the most reported type of fraud, with scammers contacting investors claiming to be seasoned "investment managers" who have made millions investing in cryptocurrency.

In bitcoin investment schemes, scammers request an upfront fee and then steal it, or request personal identification information claiming it's to transfer or deposit funds.

Con artists often use fake websites offering "guaranteed returns" or other setups that require large investments for even larger "guaranteed" returns.

Countless investors have fallen victim to these bogus guarantees, leading to financial disaster when they can't get their money back.

In 2023, a reported $3.9 billion was lost to crypto investing fraud, with scammers convincing investors to transfer cryptocurrency to a new exchange or platform, claiming it has very high returns.

Once the investor transfers crypto, the scammers continue to build trust by publishing false high returns on the platform, allowing them to withdraw and use funds.

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If you suspect you've been a victim of a cryptocurrency scam or see one happening, report it immediately. You can use online complaint forms from organizations like the FTC, CFTC, SEC, and FBI's Internet Crime Complaint Center.

These organizations can help you get your money back and prevent others from falling victim to the same scam. For example, the FTC's fraud report form is a great place to start.

You can also report to the cryptocurrency exchange you used for the transaction. Many exchanges have their own fraud prevention measures and can help you recover your assets.

To protect yourself from cryptocurrency scams, be aware of common red flags like promises of large gains or double the investment, only accepting cryptocurrency as payment, and manipulation tactics like extortion or blackmail.

Keep your digital wallets safe by practicing good digital security habits, such as using strong passwords and choosing safe storage. If you receive a suspicious email or text, don't click on links or respond directly – go to the provider's website or use their trusted phone number instead.

Here are some organizations to report cryptocurrency scams to:

Additionally, report to the cryptocurrency exchange you used for the transaction.

Be wary of communications sent your way, as legitimate businesses won't correspond with you via social networks or text messages.

Legitimate businesses also won't ask you for your private keys to help you with an action, so be cautious of anyone who asks for that information.

The best way to spot a crypto scammer is to conduct research on every project to learn about the team behind it. Research is key to avoiding scams.

Search for the cryptocurrency using the word "scam" and see what you find - if someone has tried to scam others, it's likely they'll have left a digital trail.

Visit official consumer protection sites like the FTC, FBI, and SEC to see if they've issued any warnings about the project. The State of California's Department of Financial Protection and Innovation also has a great compilation of scam attempts with descriptions.

Crypto scams are a serious concern in the cryptocurrency world. Over 69,000 complaints were reported to the FBI in 2023, with scams bringing in at least $4.6 billion worldwide.

Scammers often use phishing emails or websites to steal login credentials or private keys, which can lead to significant financial losses. In 2022 and 2023, over 300,000 people fell victim to phishing scams, with losses totaling $52.1 million and $18.7 million respectively.

Scams can also occur through fake cryptocurrency exchanges, where scammers promise extremely competitive market prices to lure victims into investing. To avoid falling victim to these scams, it's essential to stick to reputable exchanges like Coinbase, Crypto.com, and Cash App. Always research the exchange's reputation and legitimacy before entering any personal information.

Red Flags to Watch Out For:

Remember, if something sounds too good to be true, it probably is. Always be cautious and do your research before investing in any cryptocurrency or exchange.

Crypto scams are a serious issue in the cryptocurrency world. Scammers have been known to set up fake crypto platforms that only exist for a short period, taking the crypto and deleting the website to set up another for the next victims.

Fake exchanges are a common type of crypto scam. These exchanges may trick users by offering extremely competitive market prices that make them think they're getting a steal. Be sure to use a reputable exchange when buying or selling bitcoin.

Scammers might lure investors in with promises of a great cryptocurrency exchange, but in reality, there is no exchange and the investor doesn't know it's fake until after they lose their deposit. Stick to known crypto exchange markets like Coinbase, Crypto.com, and Cash App to avoid unfamiliar exchanges.

The most common type of crypto investing fraud is convincing an investor to transfer cryptocurrency to a new exchange or platform, claiming it has very high returns. Once the investor transfers crypto to the platform, the scammers continue to build trust by publishing false high returns on the platform, allowing them to withdraw and use funds, and encouraging more investment.

Some common red flags of crypto scams include promises of large gains or double the investment, only accepting cryptocurrency as payment, contractual obligations, misspellings and grammatical errors in emails or social media posts, manipulation tactics, promises of free money, fake influencers or celebrity endorsements, minimal details about money movement and the investment, and several transactions in one day.

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To protect against crypto scams, practice good digital security habits such as strong passwords, using only secured connections or VPNs, and choosing safe storage. Consider using a hardware wallet to store your cryptocurrency, as they are more secure than digital wallets.

Phishing scams are a popular type of crypto scam, where scammers send emails with malicious links to a fake website to gather personal details, such as cryptocurrency wallet key information. Never enter secure information from an email link, and always go directly to the site.

Social engineering scams involve psychological manipulation and deceit to gain control of vital information relating to user accounts. Be wary of scammers who take time to gain your trust before asking for private keys or sending money to their digital wallet.

Here are some common types of crypto scams:

Cloud mining platforms market to retail buyers and investors to get them to contribute upfront capital to secure an ongoing stream of mining power and rewards.

These platforms don't own the hash rate they claim to, which is a major red flag.

You must conduct rigorous due diligence on the platform before investing to keep your money.

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Scammers often impersonate recruiters or job seekers to gain access to cryptocurrency accounts, offering fake job opportunities in exchange for cryptocurrency as payment for job training.

These scammers can be quite convincing, with some even posing as LinkedIn recruiters to gain trust. They'll often ask for sensitive information or documents to review, which can contain malicious code.

North Korean IT freelancers have been known to capitalize on remote job opportunities by presenting impressive resumes and claiming to be based in the U.S. They're part of a type of scam called a shadow workforce.

In 2022, a Sky Mavis engineer fell victim to one of these shadow workers, who stole $600 million in a bridge attack after gaining access to the engineer's document. This was a result of a phone interview and a document review process.

Shadow workers like these have stolen nearly $3 billion in the past year, according to Chainalysis. They use their IT skills to gain insider access and enable malicious cyber attacks on cryptocurrency companies.

A flash loan attack is a type of scam that targets decentralized finance platforms. These loans are popular in the cryptocurrency market because they allow traders to buy and sell tokens quickly.

Traders use flash loans to buy tokens on one platform at a lower price and sell them immediately on another platform to make a profit. The loans are repaid in one transaction.

Because flash loans are not collateralized and don't involve credit checks, an attacker can take advantage of borrowing money and manipulating pricing on a platform.

In February 2023, Platypus Finance was victim to a flash loan attack, resulting in an $8.5 million loss.

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When dealing with cryptocurrency transactions, it's essential to understand the difference between a wallet address and a transaction ID/Hash. A wallet address is a unique string of characters that identifies the recipient of a cryptocurrency transaction.

Bitcoin addresses, for example, can be 26-63 characters long and start with different prefixes depending on the type of address.

Ethereum addresses, on the other hand, are always 42 characters long and include the '0x' prefix.

Here's a quick comparison of Bitcoin and Ethereum addresses:

Understanding these differences can help you navigate cryptocurrency transactions and avoid potential scams.

The crypto market size is a staggering figure, with over $4.6 billion in scams brought in worldwide in 2023 alone.

The sheer scale of these scams is a stark reminder of the risks involved in the crypto market. This figure is likely just a small fraction of the total market size, which remains largely unregulated.

According to the FBI, there were over 69,000 complaints regarding cryptocurrency in 2023, a number that's only expected to grow as more people invest in crypto.

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