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Top Fifteen Crypto Scams & How To Avoid Them

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Crypto cons are deceptive tactics employed by scammers, who target your valuable digital assets. As cryptocurrency investments and wallet usage have increased, scammers have also developed more sophisticated strategies to trick you.

These nefarious tactics range from counterfeit endorsements by well-known figures to sophisticated phishing and ‘too-good-to-be-true’ giveaways, exploiting the trust and inquisitiveness of individuals. These ploys often coax victims into parting with their funds or confidential details, such as the keys to their cryptocurrency wallets.

Here’s a rundown of the top 15 scams and tactics currently in circulation and what you can do to protect yourself and your assets against them.

Phishing Scams 

Phishing scams in the crypto world involve tricking individuals into revealing sensitive information, like private keys or login credentials, by pretending to be trustworthy entities. For example, you may receive an email that looks like it's from a reputable crypto exchange asking you to reset your password, leading you to a fake website where your credentials are stolen. Defence: Always verify the authenticity of the website or sender and never share your private keys or sensitive information via email or unverified platforms.

Ponzi & Pyramid Schemes

These schemes promise high returns on investment but rely on the influx of new investors to pay earlier investors, eventually collapsing. An example is a crypto project that offers substantial profits for recruiting new investors, but the returns are paid from the new investor contributions, not actual profit. Defence: Be skeptical of any investment opportunity that offers unusually high returns with little to no risk and conduct thorough research before investing.

Rug Pulls 

Rug pulls occur when the developers of a cryptocurrency project suddenly withdraw all their funds, leaving investors with worthless tokens. For instance, a new token might be heavily promoted and then abruptly removed from exchanges, with developers disappearing. Defence: Research the project's developers, their track record, and the project's liquidity lock commitments before investing.

Fake ICOs (Initial Coin Offerings) 

Scammers launch fake ICOs to lure investors into buying nonexistent or worthless tokens. An example is a scammer creating a sophisticated website for a non-existent crypto project, complete with a whitepaper and fake team profiles. Defence: Conduct thorough research, including reviewing the whitepaper, understanding the team's background, and looking for credible, independent reviews.

Pump and Dump Schemes 

In these schemes, scammers inflate the price of a lesser-known cryptocurrency and then sell off their holdings, causing prices to plummet. An example is a group spreading false information to drive up a crypto token's price before selling their stake at the peak. Defence: Avoid investment decisions based solely on social media hype and seek out independent, reliable information.

Giveaway Scams 

These scams promise to multiply the cryptocurrency you send but return nothing. An example is a fake social media account of a celebrity promising to double any crypto sent to a particular address. Defence: Remember that if an offer seems too good to be true, it probably is. Legitimate companies do not ask for funds in return for greater rewards.

Impersonation Scams 

Scammers impersonate trusted figures or companies to convince you to send them money or share private information. An example is receiving a message from someone pretending to be a crypto exchange's support staff, asking for your login details. Defence: Always verify the authenticity of the requester through direct, official channels before taking any action.

Romance Scams 

In these scams, someone creates a fake online identity to gain a victim's affection and trust, then manipulates them into sending cryptocurrency. For example, an online romantic partner may ask for crypto to cover a supposed emergency. Defence: Never send money or share cryptocurrency with someone you have only met online.

Fake Wallets and Exchanges 

These are fraudulent platforms that steal your funds directly or compromise your data. An example is downloading a wallet app that turns out to be malicious software designed to steal your crypto assets. Defence: Use only well-known and widely trusted wallets and exchanges, and always double-check URLs and app details.

Malware Scams 

Malware designed to steal cryptocurrency infects your devices through dubious downloads. An example is downloading a crypto trading application from an unverified source that contains keylogging software. Defence: Protect your devices by using robust antivirus software, avoiding downloads from untrustworthy sources, and regularly updating your software.

Man-in-the-Middle Attacks 

These attacks involve a hacker intercepting your communication with a crypto service to steal funds or data. For example, using an unsecured Wi-Fi network to access your crypto wallet could expose your information to attackers. Defence: Use secure, private internet connections and enable two-factor authentication whenever it’s an option.

SIM Swapping 

This involves a scammer convincing a mobile carrier to switch a victim's phone number to a new SIM card, gaining access to two-factor authentication messages. For example, a hacker could take over your mobile number and use it to reset your crypto wallet password. Defence: Use an authenticator app instead of SMS for two-factor authentication and safeguard your personal information.

Employment Scams 

Scammers offer fake job opportunities, often asking for payment in crypto for training or equipment. An example is a scammer posing as a recruiter for a well-known crypto company, asking for payment in crypto to secure a job position. Defence: Verify the legitimacy of the job offer and the employer, especially if the recruitment process seems unusually fast or easy.

Non-Existent Mining Equipment 

Scammers sell mining equipment that either doesn't exist or is grossly overpriced. For instance, you might pay for a high-performance mining rig only to receive an inferior or non-existent product. Defence: Research the seller's reputation, compare prices, and consider seeking opinions from trusted community forums.

Social Engineering Scams 

These involve manipulating individuals into revealing confidential information or making security mistakes. An example is a scammer calling you, pretending to be from a crypto exchange's support team, and asking for your account details to resolve an issue. Defence: Stay informed about common tactics used in social engineering and always think critically about requests for information or access to your accounts.

A Cautionary Tale

Even when a business seems incredibly reputable and well funded, it can all go tragically wrong, very fast. Take FTX for example, they had A-list celebrities including Larry David and Tom Brady who were being paid to promote the exchange — effectively endorsing it by lending their credibility. There was even a Superbowl ad. Yet, in the background, Sam Bankman-Fried was siphoning off billions of dollars in funds to his other entities and using customers money for supposed ‘altruism’. Many thousands of exchange users could have mitigated their exposure by not keeping all their crypto eggs in one basket.

Key Takeaways:

  • Exercise extreme caution with investment opportunities promising exceptional returns.
  • Thoroughly research and verify the legitimacy of cryptocurrency exchanges and investment platforms.
  • Approach romantic connections that quickly pivot to financial aid or investment opportunities with skepticism.
  • Be vigilant against phishing attempts; never share private keys or sensitive information without verifying the source.
  • Recognize the hallmarks of a Ponzi scheme: reliance on bringing in new investors to reward existing ones, and promises of high returns with little risk.
  • Utilize strong passwords, enable two-factor authentication, and critically assess every communication for authenticity.
  • Separate what you want to be true, from what actually is true. Wishful thinking does not pay the bills!

Again: if it’s too good to be true, it usually is. We’ll continue to update you as new scams arise, in the meantime, stay vigilant and be wise.


Thank you for reading this piece and if you have any questions, feel free to reach out via Telegram @savl_support or join the conversation on Twitter @Savl_official.

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