Crypto Scams

Did you know Bitcoin is the fastest asset to reach a $1 trillion market cap? Bitcoin, and cryptocurrencies as a whole, stand to be an asset class that could dominate how money works for everyone someday soon. However, much like anything valuable, crypto scams are all around the Internet. 

People lose over $9 million per day because of cryptocurrency and bitcoin scams. Just two years ago, The Wall Street Journal reported that cryptocurrency scammers took over $4 billion from customers!

It’s up to you to stay ahead of what these scammers have up their sleeve by learning how to spot a scam when you see one and how to avoid one entirely. 

Crypto Scam Categories

While no two cryptocurrency scams are the same, most of the scams out there fall into distinct categories. The categories we’ve identified separate themselves based on what platform the fraud is taking place. 

  • Fake Exchanges/Websites: This is when an app or website pretending to be an honest exchange is instead a front for harvesting people’s currencies. One of these was the scam exchange BitKRX, which pretended to be South Korea’s largest Bitcoin exchange before taking their “clients’” crypto.  
  • Fake Cryptos: These cryptocurrencies are tokens or coins structured only to benefit those who already own a large amount of pre-mined currency. A recent example of this is the SafeMoon crypto, which punishes those that use the currency for anything other than holding it. 
  • Fraudulent Demands Of Payment: These kinds of scams are when someone pretends to be a government official or investment broker and demands that you send them some of your cryptos to pay off a fee or invest in a prospect. The message usually tells you to do this quickly, so you feel pressured to comply and don’t have time to think about what’s going on.  
  • Malware: Viruses, trojans, and other malware can get into your electronics from sketchy places and try to do things like scraping your exchange logins or wallet addresses. Some new malware will even change your address when you copy it so that the transfer sends to a different wallet instead of the one you wanted.  

These are some of the more common types of cryptocurrency and bitcoin scams out there. Make sure you stay vigilant out there!

How To Avoid Being Scammed

Now that you know what kinds of scams you should be aware of, the next question is, how do you avoid getting scammed? There are a few practices you can use to keep yourself safe from harm in the crypto world. 

  • Don’t Give Away Your Wallet Address(es): Anyone who has access to your crypto wallet addresses has access to your funds, just like someone holding your debit and PIN. Don’t give away or post your wall addresses anywhere that will have those addresses saved. 
  • Research Exchanges First: When choosing an exchange, make sure that you do your own research about it. Look up any news stories, coverage, and posts online about the exchange itself and see what people are saying about it. If you keep seeing the word “scam” come up over and over in those searches, find a different exchange.
  • Review the messages/calls you get for errors: If you get emails or calls from people or businesses, keep an eye or ear out for grammatical errors. One or two errors usually aren’t a big deal, but repeated errors could mean that someone is using a translator to try and cast a wider net while scamming. Block and report the user in question, if you’re able. 
  • Don’t Download Apps/Software You Don’t Recognize: Much like with exchanges, you should research crypto apps and software you use before actually using them. Make sure you understand what permissions the software asks for and that it isn’t saving personal or wallet data that another user could then steal from you. 
  • Double-Check Websites You Visit: Whichever exchanges or apps you use, make sure you check the URL for these sites when you use them. Scammers will sometimes snag domains that are the slight misspelling of significant exchanges, hoping to phish for your information. Glance up at the URL or at the app’s name in the app store to ensure you’re getting the officially supported platform and not a scammer. 

It all comes down to awareness and mindfulness. As long as you’re doing your best to stay safe while in the crypto space, the chances of you coming across a scam or, worse, being the victim of a scam.

With all the excitement around crypto, especially now during the 2021 bull run, it’s easy to get caught up in the hype. It’s in those emotional moments, where you see investment opportunities that could result in life-changing money, that you’re at your most vulnerable. 

By staying aware of what criminals are doing in the crypto space, you can put yourself in a position where you can’t be a victim to one of these crypto scams. 


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