Types of Cryptocurrency Scams You Should Be Aware of

Cryptocurrency fraud isn’t a new thing. Although the market capitalization of cryptos has recently exploded, scams have been happening since the inception of bitcoin, as fraudsters have seen a chance in this fast-growing asset class to dupe investors who keep looking for the next big thing in this burgeoning crypto ecosystem.

Perhaps the most recent high-profile cryptocurrency scam was the disappearance of AfriCrypt’s bitcoin worth about $3.6 billion that allegedly went missing.

Unfortunately, this isn’t an isolated case in the history of cryptocurrency. This is because there are many less notable, but frequent incidents that occur to unsuspecting investors including social media scams and email phishing.

To help ensure you don’t fall victim to these scam artists, this post outlines the 3 most common types of cryptocurrency scams you should be aware of.

How Do Crypto Scams Work?

The anonymity and privacy that comes with transactions made in the blockchain network is a major aspect that fuels crypto investment scams, as fraudsters can easily convenience their victims to send them some cryptocurrency tokens, only for them to disappear in the cloud of complex code.

There are different types of cryptocurrency scams going on, from social engineering scams to social media scams that employ psychology tricks to dupe crypto investors into buying tokens and then push the prices higher – a strategy that’s commonly referred to as ‘pump & dumps’.

How To Identify Crypto Scams?

One of the ways through which you can ensure you don’t fall victim to cryptocurrency fraud is by familiarizing yourself with the most common cryptocurrency scam warning signs.

According to Kaspersky, the following are some of the scenarios that should trigger an immediate alert for investors who are being presented with offers involving cryptocurrency.

  1. The website you visit doesn’t have the security credentials required to safely transfer sensitive financial data. This includes having an SSL certificate and displaying HTTPS rather than HTTP- a website’s insecure version.
  2. Receiving an email promising some form of compensation or reward from a company although the email seems to come from a domain that’s different from the company’s official website.
  3. Receiving a reward or compensation for persuading your family and friends to buy, invest or transact with an individual or company that promotes a specific blockchain project or token.
  4. A character sends you a link through email or social media to access your cryptocurrency wallet or register for one, but the link is different from the official website of the provider.
  5. Being asked to share your private keys, PIN Number of other vital login credentials to pay for a certain service or good being purchased online.

The 3 Most Common Crypto Scams

To help ensure you have all the information necessary to protect yourself, let’s take a closer look at how some of the most common crypto scam techniques work in real sense.

Following are some of the most common cryptocurrency scams, which comprise 3 types of fraudulent actions we’ve seen today.

Unregulated Crypto Exchange Scams

Cryptocurrency exchanges have substantially grown since bitcoin and other cryptocurrencies start to get some traction.

As of 31st July 2021, CoinMarketCap had listed 390 exchanges. The biggest crypto exchanges based on a single-day volume include OKEx, Tokencan, ZG.com, Upbit, Tokocrypto, and Binance.

Nonetheless, alongside multiple trusted exchanges that have been proved to be legit and reputed cryptocurrency trading providers, there are some cryptocurrency exchanges that have been connected to situations involving allegedly hacked systems and stolen funds that have resulted in multimillion losses for some investors.

Social Media Scams

These types of scams work in various ways. For instance, a scammer might try impersonating a celebrity or any other character known within the financial and crypto space to make unwary investors think that the offer at hand is legit.

Furthermore, the fraudster might go as far as illegally accessing the character’s profile on social media – as it happened in 2020 when a hacker accessed the accounts of some of the most famous on the planet including Elon Musk, Barack Obama, and Jeff Bezos, and used that information to ask their fans to send tokens exchange for higher payouts.

Email Scams

Although tech-savvy individuals might not fall for email scams, email scams have become more complex and include crypto phishing scams where the fraudster attempts to get the investor’s login credentials to a crypto exchange account or wallet by directing them to log into their accounts through a fake website.


Cryptocurrency scams have soared 1,000% since October. (2021, May 17). CBS News – Breaking news, 24/7 live streaming news & top stories. https://www.cbsnews.com/news/bitcoin-cryptocurrency-investment-scams/

(n.d.). Forbes. https://www.forbes.com/sites/simonconstable/2021/06/29/us-saw-more-than-80000-cryptocurrency-frauds-in-2020-report/

Peachey, K. (2021, July 28). ‘We lost our life savings in a cryptocurrency scam’. BBC News. https://www.bbc.com/news/business-57983458


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