There are various forms of crypto scams, the list is so long as new types keeps sprouting up everyday on the space.
I have initially discussed some prominent ones like Staking and Farming Scams and ICO Scams, I will do justice to the rest of them, knowing the varities of crypto scam there is, knowing how to identify them. So that you do not fall victim of these cheap scams.
I will still take time in discussing some of them extensively, but if you are able to identify them, then it would be easier to recgonise and avoid them.
Different Types of Crypto Scams
Cryptocurrency scams come in various forms, and scammers continually adapt their tactics to deceive unsuspecting individuals.
Here’s a list of various crypto scams to be aware of:
Phishing Scams: Scammers create fake websites or emails that mimic legitimate crypto services to steal login credentials, private keys, or personal information.
Identifying & Avoiding Phishing — inspect the email header to know the excact, be sure you know who sent the email, don’t download attachments from mail you are sure of the source
2. Ponzi Schemes: Scammers promise high returns to early investors using funds from new investors, creating an unsustainable financial model that ultimately collapses.
Identifying & Avoiding Ponzi Schemes — Ask you to buy some voucher to scale earning, you need to build downlines by inviting others to invest in the scheme
3. Pyramid Schemes: Similar to Ponzi schemes, participants recruit others to invest, with the promise of high returns. These schemes rely on continuous recruitment to pay earlier members.
Identifying & Avoiding Pyramid Schemes — You only earn by paying and building download of referring investor, run from pyramid schemes
4. Initial Coin Offering (ICO) Scams: Fraudulent ICOs promise new tokens with little to no value and then disappear with investors’ funds.
Identifying & Avoiding ICO Scams — Read whitepapers, Scrutinize developers and team background and social media profiles, avoid projects promising a get-quick-rich roadmap
5. Exit Scams: Cryptocurrency projects or exchanges suddenly shut down, taking users’ funds with them.
Identifying & Avoiding Exit Scams — Read Audit papers, better still use only reputable exchanges and withdraw your crypto assets to external wallet or hareware wallet.
6. Rug Pulls: In the DeFi space, scam tokens and projects are created with the intent of disappearing after accumulating funds from investors.
Identifying & Avoiding Rug Pulls — Read whitepapers, understand the roadmap and what the project is trying to build, ignore get-quick-rich marketing strategy projects.
7. Social Engineering: Scammers manipulate individuals through social media, impersonating well-known figures or contacts to trick them into sending crypto.
Identifying & Avoiding Social Engineering — SE tries to play pyschological games with by asking subtle questions relating to your IDs, email, phone number or private keys. Or ask you to do something out of the ordinary, verify caller or DMs, never give out your private information or private keys.
8. Fake Wallets and Apps: Scammers create fake wallet or portfolio tracker apps to steal users’ private keys or cryptocurrency.
Identifying & Avoiding Fake Wallets and Apps — Download only apps from reputable and trusted sources, read reviews on apps, look up on social media and teams of project asking you to download any app.
9. Fake Giveaways: Impersonators on social media promise giveaways in exchange for sending a small amount of cryptocurrency. These are scams to steal your funds.
Identifying & Avoiding Fake Giveaways — You can easily smell out the manipulation of these individuals, and even if the person is a known reputable figure asking you to send crypto to them for a giveaway, the account might have been compromised or hacked. Don’t send crypto to anyone, the best I have confirmed in the space is when a developer ask you to 0 eth to a particular wallet for a block snapshot. Even scammers can use this to target victims so be careful
10. Tech Support Scams: Scammers pose as tech support and convince victims to provide remote access to their devices, then steal their cryptocurrency.
Identifying Tech Support Scams — Don’t reply anyone replying under your tweet that someone helped them in recovering their stolen coins or asking to send your private keys so they can help you.
11. Mining Scams: Scammers sell fraudulent cloud mining contracts that never yield returns or sell fake mining equipment.
Identifying & Avoiding Mining Scams — Don’t invest in virtual mining, if you want to run mining rig ask only reputable person doing same.
12. SIM Swapping: Scammers hijack a victim’s phone number by convincing the mobile carrier to transfer it to a new SIM card. This can be used to gain access to cryptocurrency accounts.
Identifying & Avoiding Sim Swapping — Use 2FA instead of number for your emails, CEX and social media accounts, PIN protect your SIM so in the case of a swapping they will need the PIN to operate the number.
13. Pump-and-Dump Schemes: Fraudulent groups manipulate the price of low-cap cryptocurrencies to profit while causing others to lose money.
Identifying & Avoiding Pump-and-Dump Schemes — Don’t buy a project or token just because it getting viral, DYOR on any investment you are buying into.
14. Fake Airdrops: Scammers promise free tokens in exchange for personal information or a small deposit, then disappear.
Identifying & Avoiding Fake Airdrops — Don’t send crypto in exchange for an airdrop
15. Crypto Loan Scams: Platforms promise loans in exchange for collateral, then disappear with the collateral or fail to provide the loan.
Identifying & Avoiding Crypto Loan Scams — Only use reputable and trusted platforms
16. Celebrity Impersonation: Scammers impersonate celebrities or well-known figures to endorse fraudulent crypto projects.
Identifying & Avoiding Celebrity Impersonation: — Always scrutinize every endorsement posts you see, always DYOR before investing in any project.
17. Malware and Ransomware: Malicious software is used to steal private keys or lock users’ devices until a ransom in cryptocurrency is paid.
Identifying & Avoiding Malware and Ransomware — Don’t download email attachements you are not sure of their source, only download app from trsuted & reputable sources, read security reviews about apps you are using.
18. ICO Exit Scams: ICOs raise funds promising to develop a project but disappear after the ICO is completed without delivering the promised product.
Identifying & Avoiding ICO Exit Scams — Only invest what you can afford to lose, scrutinize team members profiles.
19. Investment Clubs: Scammers create investment groups that promise to pool funds and invest in cryptocurrencies but run off with the pooled assets.
Identifying & Avoiding Investment Clubs — Don’t join investment clubs, DYOR.
20. Fake Exchange Scams: Scammers create fake exchanges that appear legitimate but steal users’ deposits.
Identifying & Avoiding Fake Exchange Scams — Use only reputable exchanges
21. Twitter Bot Scams: Bots impersonate cryptocurrency influencers on Twitter to promote fake giveaways and scams.
Identifying & Avoiding Twitter Bot Scams —Verify Accounts, be skeptical about giveaways, double check information, report suspicious activities.
22. Crypto Tax Scams: Scammers impersonate tax authorities or financial institutions, claiming unpaid crypto taxes and demanding immediate payment.
Identifying & Avoiding Twitter Bot Scams — Verify the Source, contact the official agency through their verified contact information to verify any outstanding tax liabilities. Report scams.
23. Email and Telegram Scams: Scammers send phishing emails and messages on Telegram, tricking users into revealing private information.
Identifying & Avoiding Email and Telegram Scams — Leave any telegram channel that you just find yourself suddenly, don’t overshare on your information, never give out your main email, always use burner email when registering for services or platforms you are not sure of.
24. Unregulated Investments: Be cautious of unregulated investment schemes that promise high returns with no oversight.
Identifying & Avoiding Unregulated Investments— Cryptocurrency is still largely an unregulated investments, so always DYOR on every projct you are investing on, invest what you can afford to lose, take profits regularly.
25. Cross-Chain Swaps: Scammers may promise to exchange one cryptocurrency for another but disappear after receiving the initial funds.
Identifying & Avoiding Cross-Chain Swaps — Use only reputable DEX and bridges, read project audits.
Do not fall into trap of someone who gives away their private keys and asked you to send gas fee to withdraw the money on the private keys, while the wallet address might truly contain real funds, you are playing a zero sum game and you are sure to lose. The wallet maybe have been programmed to divert any coin or fund sent, so your gas sent to the wallet will never reflect on it.
To protect yourself from crypto scams, exercise caution, conduct thorough research, and use reputable platforms and wallets. Be skeptical of offers that seem too good to be true and verify information from multiple sources. Education and vigilance are your best defenses against these scams.
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