Cryptocurrency scams are becoming increasingly sophisticated, and hackers are using new methods. In 2023, the total amount of crypto fraud exceeded $5.6 billion. By being vigilant and understanding the precautions, we can avoid falling into the traps carefully laid by scammers. This article will share a variety of common scam types and how to effectively protect your assets and avoid becoming a victim.
1. What are cryptocurrency scams and their current status
Cryptocurrency scams use various methods to deceive users and steal their crypto assets or sensitive information. According to statistics, the total amount of global cryptocurrency fraud in 2023 exceeded US$5.6 billion, indicating that we need to enhance our awareness of prevention.
2. Smart Contract Drainer Scam {Most Popular Scam Type}
A smart contract drainer is a malicious smart contract that is capable of stealing funds once a user approves to interact with it.
Working principle:
- Scammers hide malicious code in smart contracts
- Users interact with it through fake transactions or DApps
- The contract then steals tokens from the user's wallet
How to avoid:
I myself once clicked on the wrong link in excitement about an airdrop, and the website was almost identical to the original. I connected my wallet and my funds were immediately stolen. Not only did I lose the airdrop, I also lost my assets.
Precautions:
- Read transaction approvals carefully to avoid "unlimited approvals" for all tokens
- Use smart contract auditing tools such as CertiK or Quantstamp to check if the project has been audited
- Revoke unnecessary authorizations using tools such as Revoke.cash
3. Fake Wallet Drainer {Fake App}
These are malicious apps that masquerade as legitimate wallets and are designed to steal usersâ private keys or funds.
Working principle:
- Users download fake wallet apps from unofficial sources
- The application steals the user's private key or mnemonic phrase
- Scammers then use this information to steal funds
How to avoid:
- Only download wallets from official websites or verified app stores
- Check reviews and feedback on apps before downloading
- Use a hardware wallet like Ledger or Trezor to store your private keys offline
4. Fake applications and DeFi projects
Scammers create fake apps or DeFi projects that appear legitimate but are actually designed to steal usersâ funds.
Working principle:
- Scammers promote fake DeFi projects through fake team members or partners
- Users invest money and expect returns
- Scammers use the "carpet pulling" method or steal user funds through backdoors
How to avoid:
- Research the project, verify team information and read the white paper carefully
- Use trusted platforms such as Aave, Compound, and Uniswap
- Check if the project has been audited by CertiK or PeckShield
- Check out community feedback and join Telegram or Discord to learn about project updates
5. Telegram and Discord scams {most common type of scam}
Many scammers pretend to be project administrators or customer service staff and obtain users' private keys or mnemonics through social platforms.
Working principle:
- Impersonating an administrator: Scammers impersonate project administrators to obtain private keys or mnemonics
- Fake customer service: Create fake customer service channels to steal sensitive information or cryptocurrency
- Airdrop scam: By forging airdrops, tricking users into connecting their wallets and stealing funds
How to avoid:
- Project administrators will not take the initiative to send private messages to users. If someone contacts you, be careful
- Only use official group links provided by the project website
- Avoid airdrops that require wallet access, legitimate airdrops do not require your private keys or unreasonable approval
- Do not click on links or download files in the group
in conclusion
Cryptocurrency scams are emerging one after another, especially in smart contract and fake wallet scams, users may suffer huge losses if they are not careful. By understanding these common scams and corresponding preventive measures, such as avoiding unlimited approval of contracts, only downloading official wallets, and regularly checking wallet authorization, users can effectively protect their assets. Never trust unknown links or private messages on social platforms. Staying vigilant is the key to preventing funds from being stolen. Share this information to help more people avoid falling into crypto scams.
