Know Your Scam: Protect Yourself From Crypto Giveaway Scams

Main Takeaways 

• Not all giveaways are genuine. Crypto giveaway scams typically promise a large prize in exchange for a small “processing fee” or your personal information. 

• Take note of bogus social media profiles or websites trying to appear legitimate. Scammers may directly reach out to you via channels like WhatsApp, Telegram, or Discord.

• Think you’ve been scammed? Report the incident immediately to relevant local authorities and the Binance Support team. 

Stay vigilant and learn how to spot crypto giveaway scams with Binance's new Know Your Scam guide. Find out how to identify red flags and protect your crypto assets.

Giveaways on social media are a common marketing tool. They can promise prizes ranging from something trivial, such as a grocery store gift voucher, to life-changing, like a brand-new Lamborghini or millions of dollars in free crypto.

But beware: not all giveaways are genuine. 

Press the like button, follow some pages, and pay a small “processing fee” to win your prize! Sounds pretty straightforward, right? 

This can be a giveaway scam, a popular scheme whereby criminals promise to give away a massive prize in exchange for a small payment or sensitive personal information. In this article, we will explore how crypto giveaway scams work and provide guidelines on identifying and avoiding them.

How Do Crypto Giveaway Scams Work?

1. Creating a fake social media account and website 

Scam giveaways are often conducted through a fabricated social media profile. In more elaborate cases, scammers will build a website that resembles a real crypto company or appears to be endorsed by a celebrity. 

The social media profile may have a similar bio, username, and profile picture to its legitimate counterpart. Lookalike websites are often challenging to identify. Some telltale signs include a different URL and slight user interface variations as compared to the official website. 

2. Announcing the sham giveaway

After setting up their disguise, the scammers will announce their fake giveaway via a social media post or a direct message to the victim’s inbox.

The “giveaway” usually promises a significant amount of crypto to anyone who follows the prescribed steps, such as sending a small payment. Scammers can also leverage trending legitimate crypto projects by pretending to pre-sell their new tokens.

3. Asking for crypto or personal information 

To participate in the “giveaway,” victims are requested to provide information like their email address, phone number, and cryptocurrency wallet address. Scammers can then use this information for future scams or sell it to others on the dark web. 

After collecting the victim's personal information, scammers will charge a “processing fee” to verify the victim's identity. This fee, usually charged in the form of cryptocurrency, is the scammers’ main prize.

Note that the organizers of real giveaways will never ask winners to pay money in exchange for the reward.

4. The fallout

Once victims have followed the steps and sent their payments, the scammers disappear, deleting their social media accounts and website, and the promised cryptocurrency reward never materializes. At this stage, the probability of a scam victim recovering their money is minuscule.

Real-Life Examples

Example 1: “TESLA Biggest Giveaway Crypto of $100,000,000”

The user, whom we’ll call Jack, stumbles upon a YouTube video promoting a “giveaway” by "Tesla." The video links to a website that promises a 2x return to people who transfer their cryptocurrency to a specific wallet address.

Jack follows the website's instructions and sends one BTC to the address, expecting to get two BTC in return. Jack never receives the promised cryptocurrency and realizes he’s been scammed.

This example highlights the common features of a fake giveaway scam, including a phony website that mimics a well-known company like Tesla, the announcement of a huge giveaway prize, bad grammar, and the proposed mechanics that include sending a payment to participate.

Example 2: “BINANCE” Gift Box

The user, whom we’ll call Mark, is contacted via Telegram by someone claiming to represent "Binance.” The “Binance employee” sends a picture of a gift box that promises a reward of up to 100 USDT when opened.

To receive the reward, the “Binance employee” instructs, Mark has to scan a QR code and send 2 BNB to a specific wallet address. Ultimately, Mark loses his BNB and receives nothing from the gift box.

How to Avoid Becoming a Victim of a Crypto Giveaway Scam

Verify the giveaway’s websites and social media accounts

Always verify the legitimacy of the social media accounts or websites before participating in any giveaway or contest. Look for verified accounts or check for red flags such as spelling mistakes, unprofessional design, or suspicious URLs.

Beware of unrealistic offers

The old adage “if it sounds too good to be true, it probably is” holds especially true in the context of cryptocurrency giveaways. Most purported crypto giveaways that require you to send your crypto as a “processing” or “verification” fee to get a much larger prize are scams.

No matter how appealing the offer looks, always stop and think twice before sending your crypto to any “giveaway address.”

Protect your private information

It is a good idea to use a separate email address or phone number to participate in giveaways or contests to avoid giving away your primary contact information. 

If You’ve Been Scammed

• If you’ve provided any sensitive details, change your passwords and freeze your bank or any other affected financial accounts immediately.

• Report the incident to law enforcement. Binance works closely with law enforcement and our cooperation regularly results in detections and seizures. While the success may be far from guaranteed, this is, in most cases, the only option to recover the funds.

• Report the case to the moderators of the website, app, or social media platform where the scammer first approached you. Let them know the scammer’s profile name and any other details that may help them prevent others from being scammed.

• Immediately file a report by following the steps outlined in this guide: How to Report Scams on Binance Support.

• Beware of recovery services. They tend to provide false expectations in exchange for advanced payments. Do not get scammed twice.

We also encourage all users, both new and old, to read other installments of our anti-scam series to better protect themselves against common crypto scams. 

Further Reading

• (Blog) Know Your Scam: A Definitive Guide to Crypto's Most Prevalent Scams 

• (Blog) Know Your Scam: Fake Crypto Investments to Watch Out For

• (Blog) Know Your Scam: Red Flags to Spot an Imposter Scam 

• (Blog) Know Your Scam: Job Scams to Watch Out For

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