There are currently a growing number of crypto-related scams and frauds claiming to offer a high return on investment. Before making deposits or transfers, you should remain skeptical and do your own research (DYOR) to verify that the project or website is legitimate. Since transactions on the blockchain are anonymous and irreversible, you may not be able to recover lost funds.
Here are some tips to identify crypto scams:
Projects that claim to offer an unrealistically high rate are more likely to be scams;
Projects with a large number of participants do not necessarily mean they are legitimate. They could be using fake accounts to push the projects;
Even if the project was recommended by your friends, you should do your own research (DYOR) before investing;
Projects may claim to partner with well-known companies, such as Google, Binance, and Amazon. Always check partner websites to verify.
Let's see how scammers tricked victims in a recent scam:
1. Scammers often post ads through social media like Facebook and Instagram to promote their projects. They will ask you to join their WhatsApp and Telegram communities, which mostly consist of fake accounts asking you to buy certain cryptocurrencies based on a “popular” post.
2. To make the project look legitimate, they could create an app or website that will redirect the customer to sign up for an account.
For example, the screenshot below shows a pyramid scheme project that claims to be associated with Amazon, Binance, Columbia, Falabella, and Exito.
3. The scammers will then ask you to complete simple tasks to earn crypto rewards, such as clicking on website ads to earn USDT or COP.
4. However, you will not be able to withdraw these rewards after completing the tasks. To claim your rewards, you will be required to complete more tasks, such as becoming a member, inviting your friends to join, upgrading VIP membership, etc.
Be alert when you receive invitations to sign up for these crypto-earning websites, even if your friends have recommended it to you. It could be a pyramid scheme and they may not know about it.
5. Take becoming a member as an example. You will probably be asked to deposit cryptos into your account. The more you deposit, the higher your VIP level and the more rewards they claim you can earn. But in reality, you will never be able to withdraw the funds you have deposited.
6. Since Fiat deposits can be traced, scammers might offer you “discounts” on membership fees for cryptocurrency deposits and ask you to transfer cryptocurrency to their accounts.
For example, the following message is taken from a scam website. It offers a 10% refund on USDT payment for VIP 1 membership fees. After depositing 600 pesos, your account will receive a refund of 60 pesos and you can withdraw it to your bank account later.
The victim was told to sign up for a Binance account and transfer crypto to an external cryptocurrency address outside of Binance. Seeing that Binance has imposed a strict identity verification process on users, the victim made the transfer to the scammer’s address.
7. Scammers will ask you to complete more tasks to earn rewards, but you will not be able to withdraw any of them from the website. Your deposited funds will also not be recoverable.
