Know Your Scam is a weekly blog series to dissect and examine popular crypto scams.
The main point
The risk team at Binance has compiled 12 of the most frequently used crypto scams, including romance scams, impersonation scams, and fake giveaways.
Each week, we'll cover a different type of scam — including their methodology — and provide users with general guidance on how to recognize and avoid scams.
It can take the form of a Telegram message from a “Binance employee,” an urgent phone call from a distant relative who needs money, or a scammer promising love in exchange for money. Fraud methods vary, but they all have one goal in common: stealing your money.
A short message asking for money or a fake bitcoin giveaway can be enough to manipulate users and gain their trust, especially those in vulnerable moments.
This article serves as an introduction to a more comprehensive anti-fraud blog series on the most common scams in the crypto industry and best practices for avoiding them. We share this information so that our users have the latest security tips and advice because ultimately, you are the one who plays an important role in protecting your funds.
Introduction to 12 Types of Fraud
Below, our RISK team has identified and grouped the most popular crypto scams into 12 categories, along with a summary of how each category works.
Each week, we'll cover a different type of scam — including its methodology — giving users a general guide to recognizing and avoiding scams. Let's take a look at the 12 categories.
1. Investment fraud
Investment scams involve fraudsters promising high returns if you invest money through “highly recommended” websites, apps, or crypto brokers. The perpetrator may even claim to be an expert who will multiply your funds tenfold.
2. Employment fraud
Job advertisements may look convincing. Earnings are well above the industry average; However, there is something you need to pay attention to. Job posting scammers will send job listings in exchange for requiring applicants to pay a deposit fee if they want the job.
3. Disguise yourself as an important figure.
Fraudsters posing as important figures will try to gain your trust by posing as important people, such as police, government officials, or people from the tax bureau.
4. Posing as Binance Support
Unfortunately, impersonating a Binance Support Services employee is a popular mode of attack for crypto fraudsters. Fraudsters often attempt to exploit the trust our company has built to manipulate users into handing over their money.
Please note that Binance employees will never contact you directly and ask for sensitive information. If you receive a message from someone claiming to work for Binance, block the contact and immediately file a report with Binance Support.
5. Romance scams
Romance scams involve people who are interested in you trying to start an online relationship in order to steal your money. Fraud under the guise of romance can sometimes take years to develop, because the fraudster will initially ask for a small loan before finally asking for your entire savings.
6. Giveaway palsu
Scammers will invite you into Telegram groups or Discord servers to participate in fake crypto giveaways or airdrops. Scammers will usually ask for a deposit fee, or try to trick you into disclosing sensitive information with the promise of "winnings."
7. Ponzi Scheme
A Ponzi scheme is a type of fraud that pays existing investors with funds and commissions collected from new investors. This is not a real investment. Fraudsters essentially collect money from one investor to pay another investor. People involved in Ponzi schemes are often asked to get their friends and family to join.
8. Fake shopping sites
Fake shopping sites are designed to imitate genuine e-commerce websites, even going so far as to allow users to register as merchants or customers. This site may persuade you to buy goods at prices much lower than the average price on the market. However, instead of delivering your items as promised, these fake shopping sites either don't offer shipping or send you useless items.
9. Money transfer fraud
Money transfer fraud occurs when someone claims to have sent money to your bank account. Then, the fraudster will provide transaction documents before withdrawing the transaction, carrying out a chargeback, or claiming that the proof of document has been changed.
10. Fraud through contacts
Not all fraudsters are unknown people. The fraudster could be a relative, close friend, or acquaintance introduced by your friend. Fraud can and often does occur in familiar environments.
11. Rug pull
In the crypto industry, a rug pull occurs when a crypto project team collects investor money and then suddenly abandons the project and withdraws all its liquidity. Rug pulls usually occur when investor enthusiasm is at its peak.
12. Others
This category is for unique cases where fraud occurs, but the situation does not fit into any of the categories above.
See Three Examples of Fraudulent Actions
Here are some examples of ways scammers can target you.
Example 1: Fake investment
The user, let's call him Jack, sends a message to the fraudster. Apparently, Jack found the contact through other social media channels. The fraudster advertises a very profitable investment program and guarantees high returns.
Jack agreed to invest the money, but after that he realized that the person had stolen his money.
Example 2: Employee recruitment fraud
The user, let's call him Mike, was contacted by someone with an offer of an obscure job with good pay. The scammer promises that the company will pay Mike after completing a series of tasks. The scammer will ask Mike to submit a deposit fee as part of the job requirements, even though the company does not exist.
Example 3: Posing as Binance Support
The user, let's call her Lily, joined a fake "Binance employees" Telegram group that offered unique services with high returns. After making several deposits to the wallet address listed in the group, Lily has not received a response from the group.
Conclusion
We hope that users can use this information to make better decisions when exploring the crypto ecosystem. If you believe that you are currently the target of a fraudster — even if there is the slightest doubt — stop responding, stop any pending transfers, and report them to Binance Support immediately. We will use our best efforts to provide assistance based on the evidence and materials you provide.
Further Reading
(FAQ) How to Report Fraud on Binance Support
(Academy) 8 Common Bitcoin Scams and How to Avoid Them
(Blog) How to Identify and Avoid Scams from Common Crypto Scammers
Disclaimer and Risk Warning: This content is presented to you on an “as is” basis for general information and educational purposes only without representation or warranty of any kind. This content should not be considered financial advice nor is it intended to suggest the purchase of any particular product or service. Digital asset prices can be volatile. The value of your investment can go down or up. You may not get back the amount invested. You are fully responsible for your investment decisions. Binance is not responsible for any losses you may experience. Not financial advice. For more information, read our Terms of Use and Risk Warning.
