Corporate Finance, DeFi, Blockchain, Web3 News
Corporate Finance, DeFi, Blockchain News

Top 7 Scams That Involve Cryptocurrency You Must Know About

The world of cryptocurrency has allowed scammers to flourish. There's one hacking attack every 39 seconds and scammers are continuously thinking of new methods to get money from their victims.

Unfortunately, these scams can happen to the most experienced crypto investors and internet users. Some are more sophisticated than others, and most involve cryptocurrencies since these cannot be tracked that easy.

Here are the top seven scams that are trending in 2022.

Fake ICOs

Initial coin offering or an ICO is a type of funding cryptocurrency projects use to get enough financial backup to launch their project in full. These tokens are a part of the total supply and are sold to investors via exchanges. These tokens are often created on Ethereum and are interim tokens for the coins that will be launched once the project moves to its own blockchain.

When ICOs first appeared, many investors rushed to get affordable tokens, support the projects they love and get ROI once the full product comes out. Unfortunately, ICOs also became a playing ground for scammers.

As the cryptocurrency market grew, more and more ICO appeared, with the intention to scam investors and eventually leave with the money without launching a product. Unfortunately, this scam is so common that about 80% of ICOs turn out to be a scam.

Luckily, you can do some checks to see whether the ICO is legit. Besides studying the white paper and considering whether the tokens have real-life use, you can also contact the CEOs and see if they respond. Furthermore, reverse-search the photos of the team members and be wary of the team's promises. Remember—if it’s too good to be true, it probably is.

New, Unregulated Exchanges and Platforms

New exchanges are nothing special in the crypto industry. Many come and go, and only the best ones stay. What's more, there are many types of crypto exchanges, so it might be hard to select the best one. Besides, crypto exchanges must follow some regulations to stay open.

Unfortunately, digging out all the rules related to an exchange operation might be challenging. These laws depend on the country you're in, the country the exchange is in, and the type of the exchange. For example, some decentralized exchanges (DEX) don't have to ask you to pass the know your customer (KYC) process to access its services. This is where it gets tricky.

Some of these exchanges usually launch their own token, prompting their users to purchase it to either use the exchange or get access to additional features. Once you swap your Bitcoin for the token, you'll actually hold nothing of real value.

However, the exchange CEO now has your Bitcoin. The team can easily leave the exchange once they get enough money from their users, just like in the fake ICO. The same goes for any other platform. There are many gambling sites that are a scam and can't provide the services they claim they can.

Unfortunately, there's nothing you can do but keep your coins on an exchange that's been around for a while and that most people use, like Coinbase, Bitstamp, Bittrex, KuCoin, and similar. Don't access new, unfamiliar platforms and exchanges, and you should remain safe.

Fake Wallets

If you're even slightly familiar with how cryptocurrency works, you know you have to use a wallet to store, send, and receive coins and tokens. Crypto wallets are either software or hardware tools that provide these and several other services, and each blockchain and cryptocurrency has its own wallet.

Wallets have been around since Bitcoin was launched. Back then, they served the basic purpose of sending and receiving crypto. Today, they are a little more complex. For example, many wallets come with multiple features like access to news, NFT marketplaces, swapping, or staking.

This is why it might be hard to recognize when a wallet is fraudulent. Besides offering the same features as the real ones, fake wallets often have the same name and similar download links as the real ones. These cloned wallets can steal users' money in no time.

To ensure you're using the right wallet, visit the official website of the coin you plan to own. If you get stuck, reach out to the customer support team, and they'll help you get the right wallet installed.

Phishing and Ransomware

Phishing and ransomware scams have been steadily increasing and have become even worse since the pandemic started. These two scams are often connected. The phishing email is there to get you to click on a link, and it often looks like a legit offer from the company or a brand you know.

Once you click the link in the phishing email, the hacker receives valuable information and may target you with ransomware. Additionally, ransomware files are often delivered via email and could be activated by you opening them.

At the moment, anyone can become a victim of ransomware or phishing, even though these attacks are mostly aimed at businesses. Unfortunately, clicking any wrong link online can also result in ransomware.
Getting the data back is hard once the ransomware is in your device. What's more, the hacker will likely ask you to pay in Bitcoin, as those funds are untraceable. Unfortunately, this means that the chances of getting your money back and finding the attacker are slim.

The best thing to do to remain safe is to avoid opening unknown emails. Think twice, even if an email appears to be coming from a known source. If you do open it up, never click any links and check the sender's address—you may find that it's not who you expect it to be.

Impersonation of the CEO or Project Owner

If you got involved in an ICO or are active in the community of a project you like, chances are you might get in touch with someone posing as the CEO of the project or company. These scammers spend enough time exploring the person they want to impersonate and gathering information about their victims.
Then, they'll proceed to reach out to their victims, inviting them to invest in their coins or proposing a business opportunity that can change their lives. What's more, the scammers will often create social media accounts that look like they belong to the person they're impersonating.

The worst part about this scam is that some impersonators will also ask for the victim's private keys, convincing them there's something wrong with their coin or the address and that they need to check it. Then, they'll access their wallet and steal their funds.

This is why most projects openly say that nobody from the team will contact you, regardless of the situation with the project. Unfortunately, it's very hard to recognize the scammer in the cryptocurrency world. The best strategy is not to share personal data with anyone.

Pump and Dump Groups

Pump and dump groups have existed for a while and are now flooding the crypto market. P&D groups use convincing stories to lure new investors into an asset that's already at its all-time high. Then the scammers who bought low dump their holdings, and the prices suddenly drop, leaving investors with worthless coins.

When it comes to crypto, these groups are usually organized on Telegram and promote themselves in the groups of other projects. Unfortunately, while some recognize P&D schemes immediately, many crypto owners fall for fake promises of quick money and the false use case behind the token that will be pumped.
Once the user enters the P&D group, they see the scheduled time for the pump and patiently wait to purchase the asset once the scammers say it's time. What the victim doesn't know is that the scammers are already holding the assets and will sell them as soon as the victims start buying, raising the price.
There's no foolproof plan of defending against pump and dump groups. What you can do is ignore them, report the channel or group for spam if someone adds you on Telegram, and warn other users to avoid this scheme.

Romance Scams and Social Engineering

Romance scams got their name because they often happen on dating apps. However, there's nothing romantic about them. Scammers often approach victims to seduce them and make them fall in love. Then, they'll think of some reason to ask for money.

The reason can be a plane ticket to visit their victim, a sick child, a car accident, or a business problem. Scammers might also offer crypto investment opportunities and sound like they can change your life. These scammers will often also catfish their victims until the money is sent. Then, they'll disappear and move on to the next person.

Romance scams are close to social engineering. Social engineering exploits human psychology instead of hacking techniques. These scammers will use greed, curiosity, politeness, or even cyberbullying and intimidation to get into a person's head and obtain financial gains.

There are several signs that point to a romance scam and social engineering. If a person you know is sending you a strange message, a random person is making an offer that's too good to be true, or you feel like you have to act immediately, think twice as you might be a victim of these scams. Never send your fiat or crypto to people you don't know.


Cryptocurrency has opened the door to many new scams. The fraudulent ICOs weren't there until crypto appeared, and scammers with fake exchanges and wallets only utilized the new cheating methods.
On the other hand, phishing and ransomware were present before Bitcoin, but Bitcoin allowed easy, untraceable, and secure ways of getting more money from the victims.

Being exposed to potential scams daily is not easy. However, you should always remember that the offers that are too good to be true probably are. Never send money to someone you don't know, and avoid opening suspicious emails. If you're vigilant enough, you'll remain safe.

Mardi 22 Février 2022

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