As cryptocurrencies grow in popularity, it's no wonder that crypto scams are on the rise. Scammers are seizing the opportunity to exploit this lucrative space, targeting victims all over the internet—in forums, social media, and ads. Here, we reveal the five most common scam techniques and how you can protect yourself.
The most common scam involves investment schemes. Here, scammers pose as experienced investment managers. They claim to have earned significant money through crypto investments, building your interest and trust.
They try to convince you they can help you become a multi-millionaire. All you need to do is hand over your money for them to invest profitably on your behalf.
The amount they ask for is often relatively small upfront. Since they don’t plan to invest your money in cryptocurrency, a small amount is enough to entice more people into transferring funds. "It’s just a small amount; what could go wrong?" people think.
Your chances of recovering crypto funds depend on several factors. The best outcomes typically occur when cyber experts, law enforcement, or fraud investigators are able to track down the scammers.Ultimately, the scammers steal this upfront payment and vanish without a trace. Sometimes, they even demand additional payments after the initial one, claiming it's necessary for the "investment."
If you already own a crypto wallet, the situation can become even worse. Some scammers will ask for your wallet login details, claiming they’ll "manage" your assets for you. At this point, all alarm bells should ring in your head.
Rug pulls—also called exit scams—are another common tactic. Scammers create a new crypto project, such as a new currency or NFT, convincing investors to pour money into the project while tokens or NFTs are still cheap.
The promise is that you'll see significant returns when the project is made public for investment. Initially, it might seem like you’re investing in a legitimate cryptocurrency or NFT. However, when you attempt to sell the assets, you find out they don’t exist.
One infamous rug pull occurred in 2021 during the popularity of Squid Game. Scammers created the so-called Squid Coin, which could be purchased in a mobile game, allowing users to earn additional coins. Developers claimed users could eventually sell their coins, but instead, they disappeared with more than $3 million.
Phishing is perhaps the best-known type of online scam because it isn’t limited to crypto but also affects online banking and other areas where scammers target personal data.
In crypto phishing, scammers often send emails asking users for passwords, such as those for accessing their wallets where cryptocurrency is stored.
These emails look incredibly genuine, creating a sense of urgency and pressure, like instructing you to change your private key immediately due to a supposed hack on your wallet provider's website.
If you click the link in the email, you won’t land on your wallet provider’s website (even if it looks genuine) but on a fake site. Once you enter your wallet credentials there, the trap is sprung—the scammers gain all the data they need to steal your cryptocurrency.
Pig butchering scams are especially cruel. Scammers build trust with victims over time, often through dating apps, by pretending to show romantic interest. During this process, they "fatten up" their victim by gaining their trust
Once they’ve established trust—so much so that their victims even fall in love—they spring the trap: asking for access to the victim’s crypto wallet or for a transfer of cryptocurrency. They often fabricate stories about financial struggles to manipulate their victims emotionally. By this point, the victim is emotionally attached and finds it hard to say no. The trap snaps shut, and the victim loses their money.
They encourage victims to sign up and make investments on this fake platform. However, victims can only deposit money—they cannot sell their investments or withdraw their funds. Scammers often even demand additional payments before allowing victims to withdraw their money.
To avoid crypto scams, you must remain vigilant and critically assess offers. The following red flags indicate scams:
In all these cases, staying alert and cautious is essential. No reputable wallet provider will ever ask for your private credentials. If you’re unsure whether an email is genuinely from your provider, contact them directly—not by replying to the email but through their official email address listed on their website.
Always exercise caution when communicating online with people you’ve never met in person. If someone asks for a crypto payment claiming financial trouble, never agree unless you know and trust the person 100%.
If you haven’t yet invested in cryptocurrency, first research reputable wallet providers and trading platforms. Reputable providers will always allow you to sell your purchased coins and NFTs and won’t require upfront payments.
If you own significant cryptocurrency, it’s wise to store your coins and tokens in an offline wallet. These are specialized pieces of hardware—like a USB stick—where you can save all your crypto assets. Store the wallet in a secure location and only connect it to your computer when necessary.
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