The world of crypto is growing rapidly. And so is the HYPE.
Due to the soaring (and plummeting) prices of cryptocurrencies, and lots of people making (and losing) lots of money, crypto has attracted huge interest from mainstream media generating buzz, which gets amplified by social media.
As public interest in crypto has risen, so have crypto scams and fraud.
Scammers are always looking for new ways to steal your money, and the massive growth of the crypto market in recent years has created lots of opportunities for shady activities.
With stories of folks in their 20s and 30s becoming overnight millionaires dabbling in crypto, noobs have been eager to get in on the action.
But their lack of technical understanding of how crypto works and desire to âget rich quickâ (greed) can blind them to the dangers of crypto.
Scammers are cashing in on the buzz around crypto and luring gullible people into scams in record numbers.
In 2021, cryptocurrency crime hit an all-time high, According to Chainalysis, a blockchain analytics company, scammers took $14 billion worth of crypto!
Compared to a year earlier, this was a 12x increase in the number of reports and an almost 1,000% increase in money lost! đ˛
If youâre interested in crypto, you need to be aware of the risks.
âď¸What is a Crypto Scam?
A scam is a deceptive scheme or trick used to cheat someone out of something
A scammer will pose as a credible individual or business and attempt to ask you for money, your personal information, or both.
A crypto scam is similar, except that instead of asking for U.S. dollars or other fiat currency, the scammer will request cryptocurrency.
Fraudsters and con artists use a variety of scams to target you into buying and sending cryptocurrency to them. But the âhooksâ usually rely on tried-and-tested methods from non-crypto scams:
đŁ âDonât miss out!â
đŁ âGet in on the ground floor!â
đŁ âThereâs zero risk!â
đŁ â100% Returns! Guaranteed!â
With a bank or credit card scam, you can usually dispute the transaction with a central authority (your bank or credit card company) and recover your money.
But by design, cryptocurrencies are decentralizedâŚthere is NO central authority to contact. If you send cryptocurrency to a third party, you canât reverse it or cancel the payment.
So if you are a victim of a crypto scam, there is no legal protection or dispute process.
Risk too much of your money where you lose it all andâŚYou are on your own.
If you own bitcoin or other cryptocurrencies, you are vulnerable to fraud and scams.
There are many types of crypto scams since scammers are always figuring out new ways to steal your crypto holdings.
Most cryptos scams tend to fall into two categories:
âď¸The scammer tricks you into sending them cryptocurrency directly.
âď¸The scammer obtains access to your crypto wallet without your permission and steals your holdings.
đ Types of Common Crypto Scams đ
đ Fake Websites and Apps
Scammers will create cryptocurrency trading platforms (also known as âcryptocurrency exchangesâ) that are FAKE.
They may even create fake versions of real cryptocurrency trading platforms. These fake websites will look very similar to the real ones, making it hard for new crypto traders to tell the difference.
Even the website address will be similar, with just a slight change in the spelling.
These websites will entice you with promotional offers such as âfree bitcoinâ or âdeposit bonusesâ if you deposit a certain amount.
Once you sign up and make an initial deposit, you wonât be able to withdraw, or worse, the website shuts down. Basically, once they have your money, itâs gone forever.
Not only can websites be faked, but mobile apps as well. Scammers have been able to create fake crypto wallet apps that mimic real ones such as Trust Wallet and MetaMask. The goal is to get you to enter your seed phrase (or ârecovery phraseâ).
Using phishing attacks (explained below), scammers will text or email you telling you that the current version of your crypto wallet app is out of date and needs to be updated. Youâll then be provided a link to click on to download the latest version.
đ Phishing Scams
Phishing is a type of social engineering attack that uses email, phone, or text to entice individuals into providing sensitive information, ranging from passwords, credit card information, and other confidential details about a person or company.
In the context of crypto, phishing scams try to get access to your crypto exchange account or crypto wallet.
âSocial engineeringâ is a method used to extract sensitive details by way of human manipulation. With social engineering, cybercrimiinals connect with users while pretending to represent atrusted individual or legitimate organization and seek to acquire critical information such as account numbers or passwords.
Phishing can take on many different forms but in general, a phishing attack begins with the scammer contacting you via email, text, phone, social media post, or DM.
The scammer will pretend (or âspoofâ) to be someone that you will likely know and trust. It could be an individual, like a friend or family member, or a representative from a large company.
You will be asked to click a link (or download an attachment). If youâre gullible enough to click the link, youâre sent to a fake website that looks identical to the crypto exchange or wallet app you use, but itâs actually a trap.
If you enter your login information, youâve actually given this information to the scammer who can now access your real account and steal your crypto. Donât be surprised if all your holdings are immediately transferred to the scammerâs wallet(s).
Beware of strangers randomly contacting you, especially with email. Even if you receive an email from someone you know but it seems suspicious, contact that person using a different method (like a text message), rather than replying to the email.
đ Direct Message (DM) Scams
A Ponzi scheme (named after Charles Ponzi) is a fraud designed to give investors the impression that an investment is profitable. In a Ponzi scheme, the fraudster pays early investors with money that is thought to be profits from the investment, but it is actually money from more recent investors. As money is paid out to investors, the fraudster needs to constantly sign up new investors to continue funding the âpaymentsâ made to earlier investors.
đ Romance Scams
In 2021, there were $1 billion in losses reported by victims of romance scams. On social media, itâs the second most profitable fraud investment scams being the first).
A romance scam is when a scammer uses the illusion of a romantic or close relationship to manipulate and steal from you. Victims are contacted on social media or dating apps like Tinder Bumble and Grindr.
It often starts with a seemingly innocent friend request from a stranger. This stranger adopts a fake online identity and uses sweet talk to gain your affection and toy with your heart.
He or she may seem caring and genuine but their ultimate objective is o establish a relationship as quickly as possible and gain your trust. Once accomplished, conversations will turn to a request for cryptocurrency or lucrative crypto investing âopportunitiesâ.
đ Giveaway Scams
A giveaway scam is where a scammer will post a message on social media, like Twitter, asking people o send them cryptocurrency and promising to double (or more) the amount you send.
These posts will look genuine, possibly mention celebrities involved, and include replies from fake accounts claiming they doubled their money to trick people into thinking the giveaway is legit.
A link or QR code will be shared to enter the giveaway.
When you visit the website, youâll be asked to âverifyâ your wallet address by sending cryptocurrency. Of course, there is no actual giveaway and you just âdonatedâ your crypto to a bunch of scammers.
đ Blackmail Scams
Blackmail is when a criminal threatens to disclose embarrassing information or information that is potentially damaging to your standing in the community, family or social relationships, or professional career unless you surrender money.
Scammers will send you an email and claim to have proof that you have visited adult websites or other illicit websites. Unless you send cryptocurrency or share your seed phrase (or private keys), this proof will be shared publicly.
Or an email may say that the scammer has compromising photos or videos of you. And threaten to leak it online to your email or social media contacts unless you pay them in cryptocurrency.
Donât fall for it. Unless your phone or computer has actually been hacked or youâve been dancing butt naked in an outdoor public area for all to see, the probability that the blackmailer actually has anything is close to zero.
The scammers have probably sent out the same email to many people and are just hoping that some get scared enough and give in to their demands.
đ âPump and Dumpâ Schemes
A âpump and dumpâ scam involves an individual or group effort to inflate the price of a cryptocurrency and allow them to sell their holdings and make a quick fortune.
The cryptocurrencies are often newly issued with little trading history or are thinly traded (low trading volume).
The scheme starts with scammers first buying up a particular coin or token. Once theyâve finished accumulating, in a coordinated manner, they start hyping up (âpumpingâ) a coin or token, through word of mouth, social media, group chats, email, forums, and other channels, in hopes of creating a buying frenzy that will push up the price quickly.
In their messages, theyâll use emojis like đ and đ (implying price will soon skyrocket) or đand đ (implying to buy and never sell). Theyâll post fake or misleading information to excite people about the cryptoâs potential.
As the price steeply rises due to strong buying pressure, the scammers are selling (âdumpingâ) the crypto. Eventually, when there are no more buyers left, the price starts falling.
And once people realize the hype was fake, they start selling to limit their losses, which further accelerates the price decline. A lot of the folks who bought during the buying frenzy end up with losses.
The entire pump-and-dump scheme can happen in a matter of minutes.
đ Fake Celebrity Endorsements
This is similar to impersonation scams but more specifically involves famous celebrities and online influencers.
Scammers will pose as celebrities or influencers to promote their crypto âinvestmentâ or ask them directly to send them crypto.
These messages will come from social media accounts that look real or are actually real but have been hacked and taken over by the scammer. Photos or videos of the famous person will be used to make the message look even more legit.
If you see a post on social media from a celebrity or influencer that tells you to send cryptocurrency, itâs a scam. You might even see other users replying to the post and saying how they made money. But these replies are fake and created by bots.
Thanks for Your attention!
đ§Confess, what kind of scamming have you encountered? It will be a useful conversation for us!
Your KaterynaâĽď¸
Due to the soaring (and plummeting) prices of cryptocurrencies, and lots of people making (and losing) lots of money, crypto has attracted huge interest from mainstream media generating buzz, which gets amplified by social media.
As public interest in crypto has risen, so have crypto scams and fraud.
Scammers are always looking for new ways to steal your money, and the massive growth of the crypto market in recent years has created lots of opportunities for shady activities.
With stories of folks in their 20s and 30s becoming overnight millionaires dabbling in crypto, noobs have been eager to get in on the action.
But their lack of technical understanding of how crypto works and desire to âget rich quickâ (greed) can blind them to the dangers of crypto.
Scammers are cashing in on the buzz around crypto and luring gullible people into scams in record numbers.
In 2021, cryptocurrency crime hit an all-time high, According to Chainalysis, a blockchain analytics company, scammers took $14 billion worth of crypto!
Compared to a year earlier, this was a 12x increase in the number of reports and an almost 1,000% increase in money lost! đ˛
If youâre interested in crypto, you need to be aware of the risks.
âď¸What is a Crypto Scam?
A scam is a deceptive scheme or trick used to cheat someone out of something
A scammer will pose as a credible individual or business and attempt to ask you for money, your personal information, or both.
A crypto scam is similar, except that instead of asking for U.S. dollars or other fiat currency, the scammer will request cryptocurrency.
Fraudsters and con artists use a variety of scams to target you into buying and sending cryptocurrency to them. But the âhooksâ usually rely on tried-and-tested methods from non-crypto scams:
đŁ âDonât miss out!â
đŁ âGet in on the ground floor!â
đŁ âThereâs zero risk!â
đŁ â100% Returns! Guaranteed!â
With a bank or credit card scam, you can usually dispute the transaction with a central authority (your bank or credit card company) and recover your money.
But by design, cryptocurrencies are decentralizedâŚthere is NO central authority to contact. If you send cryptocurrency to a third party, you canât reverse it or cancel the payment.
So if you are a victim of a crypto scam, there is no legal protection or dispute process.
Risk too much of your money where you lose it all andâŚYou are on your own.
If you own bitcoin or other cryptocurrencies, you are vulnerable to fraud and scams.
There are many types of crypto scams since scammers are always figuring out new ways to steal your crypto holdings.
Most cryptos scams tend to fall into two categories:
âď¸The scammer tricks you into sending them cryptocurrency directly.
âď¸The scammer obtains access to your crypto wallet without your permission and steals your holdings.
đ Types of Common Crypto Scams đ
đ Fake Websites and Apps
Scammers will create cryptocurrency trading platforms (also known as âcryptocurrency exchangesâ) that are FAKE.
They may even create fake versions of real cryptocurrency trading platforms. These fake websites will look very similar to the real ones, making it hard for new crypto traders to tell the difference.
Even the website address will be similar, with just a slight change in the spelling.
These websites will entice you with promotional offers such as âfree bitcoinâ or âdeposit bonusesâ if you deposit a certain amount.
Once you sign up and make an initial deposit, you wonât be able to withdraw, or worse, the website shuts down. Basically, once they have your money, itâs gone forever.
Not only can websites be faked, but mobile apps as well. Scammers have been able to create fake crypto wallet apps that mimic real ones such as Trust Wallet and MetaMask. The goal is to get you to enter your seed phrase (or ârecovery phraseâ).
Using phishing attacks (explained below), scammers will text or email you telling you that the current version of your crypto wallet app is out of date and needs to be updated. Youâll then be provided a link to click on to download the latest version.
đ Phishing Scams
Phishing is a type of social engineering attack that uses email, phone, or text to entice individuals into providing sensitive information, ranging from passwords, credit card information, and other confidential details about a person or company.
In the context of crypto, phishing scams try to get access to your crypto exchange account or crypto wallet.
âSocial engineeringâ is a method used to extract sensitive details by way of human manipulation. With social engineering, cybercrimiinals connect with users while pretending to represent atrusted individual or legitimate organization and seek to acquire critical information such as account numbers or passwords.
Phishing can take on many different forms but in general, a phishing attack begins with the scammer contacting you via email, text, phone, social media post, or DM.
The scammer will pretend (or âspoofâ) to be someone that you will likely know and trust. It could be an individual, like a friend or family member, or a representative from a large company.
You will be asked to click a link (or download an attachment). If youâre gullible enough to click the link, youâre sent to a fake website that looks identical to the crypto exchange or wallet app you use, but itâs actually a trap.
If you enter your login information, youâve actually given this information to the scammer who can now access your real account and steal your crypto. Donât be surprised if all your holdings are immediately transferred to the scammerâs wallet(s).
Beware of strangers randomly contacting you, especially with email. Even if you receive an email from someone you know but it seems suspicious, contact that person using a different method (like a text message), rather than replying to the email.
đ Direct Message (DM) Scams
A Ponzi scheme (named after Charles Ponzi) is a fraud designed to give investors the impression that an investment is profitable. In a Ponzi scheme, the fraudster pays early investors with money that is thought to be profits from the investment, but it is actually money from more recent investors. As money is paid out to investors, the fraudster needs to constantly sign up new investors to continue funding the âpaymentsâ made to earlier investors.
đ Romance Scams
In 2021, there were $1 billion in losses reported by victims of romance scams. On social media, itâs the second most profitable fraud investment scams being the first).
A romance scam is when a scammer uses the illusion of a romantic or close relationship to manipulate and steal from you. Victims are contacted on social media or dating apps like Tinder Bumble and Grindr.
It often starts with a seemingly innocent friend request from a stranger. This stranger adopts a fake online identity and uses sweet talk to gain your affection and toy with your heart.
He or she may seem caring and genuine but their ultimate objective is o establish a relationship as quickly as possible and gain your trust. Once accomplished, conversations will turn to a request for cryptocurrency or lucrative crypto investing âopportunitiesâ.
đ Giveaway Scams
A giveaway scam is where a scammer will post a message on social media, like Twitter, asking people o send them cryptocurrency and promising to double (or more) the amount you send.
These posts will look genuine, possibly mention celebrities involved, and include replies from fake accounts claiming they doubled their money to trick people into thinking the giveaway is legit.
A link or QR code will be shared to enter the giveaway.
When you visit the website, youâll be asked to âverifyâ your wallet address by sending cryptocurrency. Of course, there is no actual giveaway and you just âdonatedâ your crypto to a bunch of scammers.
đ Blackmail Scams
Blackmail is when a criminal threatens to disclose embarrassing information or information that is potentially damaging to your standing in the community, family or social relationships, or professional career unless you surrender money.
Scammers will send you an email and claim to have proof that you have visited adult websites or other illicit websites. Unless you send cryptocurrency or share your seed phrase (or private keys), this proof will be shared publicly.
Or an email may say that the scammer has compromising photos or videos of you. And threaten to leak it online to your email or social media contacts unless you pay them in cryptocurrency.
Donât fall for it. Unless your phone or computer has actually been hacked or youâve been dancing butt naked in an outdoor public area for all to see, the probability that the blackmailer actually has anything is close to zero.
The scammers have probably sent out the same email to many people and are just hoping that some get scared enough and give in to their demands.
đ âPump and Dumpâ Schemes
A âpump and dumpâ scam involves an individual or group effort to inflate the price of a cryptocurrency and allow them to sell their holdings and make a quick fortune.
The cryptocurrencies are often newly issued with little trading history or are thinly traded (low trading volume).
The scheme starts with scammers first buying up a particular coin or token. Once theyâve finished accumulating, in a coordinated manner, they start hyping up (âpumpingâ) a coin or token, through word of mouth, social media, group chats, email, forums, and other channels, in hopes of creating a buying frenzy that will push up the price quickly.
In their messages, theyâll use emojis like đ and đ (implying price will soon skyrocket) or đand đ (implying to buy and never sell). Theyâll post fake or misleading information to excite people about the cryptoâs potential.
As the price steeply rises due to strong buying pressure, the scammers are selling (âdumpingâ) the crypto. Eventually, when there are no more buyers left, the price starts falling.
And once people realize the hype was fake, they start selling to limit their losses, which further accelerates the price decline. A lot of the folks who bought during the buying frenzy end up with losses.
The entire pump-and-dump scheme can happen in a matter of minutes.
đ Fake Celebrity Endorsements
This is similar to impersonation scams but more specifically involves famous celebrities and online influencers.
Scammers will pose as celebrities or influencers to promote their crypto âinvestmentâ or ask them directly to send them crypto.
These messages will come from social media accounts that look real or are actually real but have been hacked and taken over by the scammer. Photos or videos of the famous person will be used to make the message look even more legit.
If you see a post on social media from a celebrity or influencer that tells you to send cryptocurrency, itâs a scam. You might even see other users replying to the post and saying how they made money. But these replies are fake and created by bots.
Thanks for Your attention!
đ§Confess, what kind of scamming have you encountered? It will be a useful conversation for us!
Your KaterynaâĽď¸
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Join me inđđť:
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