Crypto scams involve hackers stealing money from users making transactions in digital tokens. Since most crypto is not regulated or tracked by governments, it is difficult to recover the stolen money. Criminals take advantage of anonymity to scam unsuspecting users. Users must take all the necessary steps to secure their crypto assets.
Crypto scams are mainly of two types.
- Transfer or steal crypto directly: This crypto scam involves criminals impersonating authorities, presenting fake opportunities, or finding other malicious ways to steal crypto from users’ crypto wallets.
- Access to users’ wallets: Criminals obtain sensitive information like security codes or private keys or access hardware to get access to users’ wallets.
This article will discuss all the types of crypto scams. We will also explain how to avoid, spot, and report crypto scams.
Types of crypto scams
Crypto investment scam
Criminals get in touch with users impersonating investment managers. These fake investment managers claim to have made millions in crypto and promise the same to users. Usually, criminals ask for an upfront fee and steal it. Criminals can gain access to users’ wallets by asking for personal information and claiming to transfer funds to their wallets.
Fake celebrity endorsements are used to scam crypto from investors. Criminals make it look like a big celebrity is backing a project by using fake photos to impose on ads, articles, or accounts. However, these tactics are another way to get access to users’ sensitive data or even steal money.
Crypto-romance scams
This type of scam usually involves dating apps. Crypto-romance scams involve criminals having a long-distance relationship with a dating app user and gaining trust. Next, criminals will try to convince users to send crypto. Criminals disappear once they receive the crypto.
Phishing scams
Phishing scams are the oldest and most popular type of crypto scam. Scammers send emails with malicious links to obtain sensitive information like key details or security codes. Users should never enter personal information on a suspicious link.
Rug-pull crypto scams
Criminals hype up a new crypto project to get funding. Criminals usually disappear after getting large amounts of funding for the fake project. Victims can not sell their fake crypto, or NFT, as the coding prevents them from doing so, leaving them with a useless investment.
The most popular scam of this type involved Squid coins, a game based project. Squid coins were named after the popular Netflix tv series, Squid Games. Users had to buy tokens to play games. Later, users would exchange these tokens for another. The squid coin’s value shot up to $90 from one cent. The trading of this coin stopped abruptly, and the money vanished. Users then tried to sell this coin, which plummeted the token’s value to zero. The criminals made around $3 million from this scam.
Airdrop crypto scams
Crypto projects send free crypto tokens to users using airdrops. Airdrops are a marketing strategy to attract users to a new project; unfortunately, they attract criminals too.
Crypto airdrops are a marketing strategy to create awareness of new cryptos entering the market. However, criminals airdrop fake coins into wallets to get access to sensitive information. Information like crypto keys or security codes is the target of criminals. Criminals also dupe users into sending crypto to receive airdrops.
Crypto-WhatsApp and social media scams
Fake posts are circulated on social media platforms like WhatsApp, promising free crypto rewards. For example, criminals use fraud celebrity accounts endorsing fraud crypto projects to dupe users.
Users are asked for verification when they click on the fake giveaway link. This verification usually involves paying a fee. Users can have their sensitive data stolen along with their money.
How do I identify crypto scams?
Users must be aware of red flags in information involving crypto rewards. These are some of the signs that users must spot.
- Promises to multiply your money and give you free money
- Typographical errors in any crypto marketing material and communication.
- Fake celebrity influencers
- The fake contract locks users into holding crypto assets without the chance to sell them.
- Fake social media crypto schemes
- Vague details about the money trail
- Manipulation, blackmail, or extortion
How can I avoid crypto scams?
Most scams can be avoided if you implement safe practices when accessing your crypto wallet.
- Always keep track of crypto keys: A unique key is generated to access a crypto wallet. Users should have all the control they need to access their crypto keys and be secure.
- Using your wallet: Users must take additional precautions if they have massive crypto holdings. Users must take measures such as holding portions of their holdings in cold wallets, using two-factor authentication, and purchasing insurance policies.
How do I report crypto scams?
Users must contact customer service immediately if they detect suspicious activity in their wallets. Users should always make a copy of all communications with the exchange. Users should register a complaint with their local cybercrime unit if the issue escalates. A copy of the communication with the exchange will be handy for the cybercrime unit and should be attached to the complaint.
How do I recover stolen crypto?
Unless the recipient returns the crypto tokens, crypto cannot be returned once transferred. The best thing to do is report the scam to your crypto exchange and local enforcement authorities. These authorities can try to seize any crypto tokens as part of the fraudulent scheme.
Final thoughts
By understanding the different types of scams, users should be able to spot a crypto scam early. Users must secure sensitive data, such as crypto wallet keys and security codes. Always ensure that protocols are put in place for asset safety.
You can know more about Crypto safety through ZebPay blogs. ZebPay blogs cover the latest updates on crypto basics, market updates and security features.
