5 Most Common Types Of Cryptocurrency Scams and How to Avoid them
Monday, Jul 31, 2023
FAQs Cryptocurrency wallet


Have you ever heard of rug pulls and pig butchering? Stay one step ahead of scammers by educating yourself on how common crypto scams work in detail!

According to DeFi Security’s report, crypto hackers and scammers stole $452 million in the first quarter of 2023. Although this marks a significant decrease from $1.3 billion recorded in the same period of 2022, the recovery rate for the stolen funds has also declined.

Scammers are always seeking innovative ways to deceive people, and the tremendous growth of cryptocurrencies in recent years has brought numerous opportunities for crypto scams. In this article, we discuss five common scams, how they work, and precautionary measures you can take to protect yourself.

Common Crypto Scams

1. Investment scams

Investment scams often start on social media platforms, where strangers send unsolicited messages promising lucrative opportunities with fast and high returns and minimal financial risk. Then, they might ask you to send cryptocurrency directly to participate, promising to multiply your “investment” rapidly.

Another way, fraudlers may direct you to a fake but convincing website to learn more about the opportunity. This involves submitting your personal information or sending cryptocurrency to join.

If you unfortunately fall for this fraudulent scheme and proceed with the so-called opportunity, you won’t get rich as promised, but the money you “invested” would never be seen again.

2. Romance scams

Romance scams have become a concerning issue; according to the Federal Trade Commission, approximately 20% of romance scam victims lose money through crypto transactions. These scams typically begin on dating apps or social media platforms, where scammers create fake profiles and pose as potential romantic partners. 

Once the scammers gain their target’s trust, they start manipulating them into sending crypto. At first, the requests for money may seem innocent, but as the relationship progresses, the demands increase, and the victims may end up sending significant amounts.

In many cases, scammers create elaborate stories to evoke sympathy and urgency. They may fabricate medical emergencies, financial hardships, or legal troubles to justify their need for money. When victims eventually become suspicious or realize they are being scammed, the fraudsters vanish, severing all communication.

3. Phishing scams

Phishing scamss encompass attempts by fraudsters to obtain sensitive personal information, including name, address, social security number, passwords, and, in the case of cryptocurrency, access to your wallet through seed phrases or private keys.

These scams manifest in various forms, often starting as deceptive emails, phone calls, or text messages. Additionally, they can initiate through social media messengers or forums. The scammers usually impersonate a trusted source to deceive you into disclosing personal details.

For instance, they might pose as representatives from Wallacy and contact you, pretending to offer assistance with your digital wallet. They may request you to fill out a form or provide access to your wallet. Once they obtain this information, they swiftly transfer your crypto out of your wallet, leaving you unaware of the situation.

4. Impersonation scams

Impersonate scams are a prevalent and concerning issue  in the world of cryptocurrency. These scams involve fraudsters pretending to be someone else, often a reputable individual or organization, to deceive and manipulate users into giving away their digital assets or sensitive information.

The most common form of impersonation involves scammers assuming the identity of well-known figures in the crypto space, such as influential personalities, cryptocurrency projects, or customer support representatives from popular exchanges. They may use fake social media accounts, email addresses, or websites that closely resemble the genuine ones to trick unsuspecting users.

Once they gain their victim’s trust, scammers use various tactics to exploit them.

5. Giveaway Scams

This prevalent crypto scam combines elements of investment and impersonation fraud. Giveaway scams are promoted on social media, seemingly sponsored by crypto celebrities or famous personalities, promising to multiply any cryptocurrency sent in. These scams may involve imposter accounts or hacked celebrity/crypto thought leader accounts.

These posts often feature comments from alleged participants claiming high returns from the giveaway. However, don’t be fooled; these commenters are either part of the scheme or bots making it seem legitimate. Sadly, those who participate in giveaway scams never receive any crypto returns, losing the sent cryptocurrency forever.

How to spot cryptocurrency scams

Detecting a crypto scam involves being alert to warning signs, such as:

✔️ Promises of Guaranteed Returns: Beware of crypto offerings guaranteeing profits as no investment is risk-free; returns can fluctuate.

✔️ Poor or Missing Whitepaper: A credible cryptocurrency should have a detailed whitepaper explaining its design and function. Absence or incomprehensible whitepapers should raise caution.

✔️ Excessive Marketing: Fraudsters may use aggressive marketing tactics, including online ads and influencers, to attract a large audience quickly. Suspicion arises if claims seem extravagant without evidence.

✔️ Unnamed Team Members: Legitimate projects disclose their team members’ identities and are active on social media. Lack of transparency regarding a cryptocurrency’s creators requires scrutiny.

✔️ Beware of “Free Money”: Any investment promising free money, whether in cash or crypto, is likely a scam. Exercise caution and verify before proceeding.

To protect your crypto assets, learn about scams and tips to spot them. Also, please refer to the following article about Tips to Secure your Crypto Wallet .


Website | Telegram Channel | Telegram Group | Twitter |  Facebook |   Blog  |  Youtube | Discord

#crypto #wallet #scam

Related Articles

Popular Articles


Daily Crypto Market Movement at Your Fingertips.

Be the first to get critical insights and analysis of the crypto world, subscribe now to our newsletter.