Cryptocurrency is a growing world where you can store your digital currency in a digital wallet and where there is money, there is a risk of theft or scam. The world of cryptocurrency is not an exception to this. Cryptocurrency like Bitcoin is verified by blockchain technology and is not protected by any financial department.

Therefore, every crypto platform mentions the risks involved. Therefore it is very necessary to look for legit platforms and stay away from scammers. Because scammers are doing everything in their power to steal from the investors. The newcomers in this world are their favorite and easier targets. As per a report, around $14 billion has been stolen from people in 2021 alone. Wormhole, a crypto exchange, in February 2022, faced a loss of $320 billion and this is just one exchange that we are talking about.

It is therefore very important to stay vigilant of the scammers. To safeguard your assets, you have to know what are the common cryptocurrency scams and how to avoid them.

Cryptocurrency Scams

Out of many, the 10 most common cryptocurrency scams are as follows:

Fake Websites

Scammers are very smart and thus they can do very clever things to steal from you. The most common scam that has been reported by many unfortunate investors is the theft made by fake websites. If you do not have a keen eye, then you can not tell a fake and original website apart. The basic pointer is the domain name which is slightly different from the original one, There are two types of these fake websites:

Phishing Pages: These are the websites where all information from your username to your password is handed directly to the scammers. These websites, to lure their targets and to look legit, allow initial transactions to be made and when the person starts to deposit more, they shut down or do not allow the transactions.

Fake Crypto Exchanges: Many scammers acting as brokers, lure investors to new exchanges in return for greater cryptocurrency exchange, some even offer extra bitcoins. But in reality, no such thing happens and people lose their deposits before they even know it.

Investment Schemes

In this kind of scam, scammers usually contact their targets as so-called investment managers and give fake proof of their big earnings by investing in the said platform. They also promise their targets of big earnings against small initial investment. Some may also gain access to their login details and end up emptying their deposits.

Frauds Promising Romance

This kind of scam may come as a surprise but according to The Federal Trade Commission (FTC), a total of 20% of the stolen crypto assets have been done through dating apps. The scammers reach the targets and are involved with them romantically and when the other party starts to trust the scammer, the scammer then tries to persuade its victim to invest in their fake exchanges or platforms.

This kind of scam takes a longer period but once the dating person agrees to deposit crypto for the sake of a newly kindled relationship, the crypto along with the scammer disappears into the thin air.

Giveaway Scams

Scammers can also pose as a celebrity or an influencer to gain your trust by delivering a message from a legit looking social media account to invest in their platform. The message often creates a sense of urgency by promising a profit or greater returns for the first few. They make their social accounts very legit, they even make calls for a so-called security check and get away with credentials or deposits of their victims.

Hawk Eyes in the Public Internet

If you are using an open or a public network then you must not enter any information or credentials online even in the legit platforms. There are many hackers that are waiting on these networks so that they can get their hands on your credentials and steal your deposits and crypto currency is not excluded here.

But, if you need to do a transaction then to avoid this cryptocurrency scam , make sure you use a VPN before entering any private information. The VPN will encrypt your data and prevent your cryptocurrency from being stolen.

Blackmailing

This cannot be named as a straightforward scam but it is a way through which your cryptocurrency can be stolen. In this type of cryptocurrency scam, the blackmailers get their hands on the credentials of their victims by blackmailing them with mail. The mail usually contains their record of visiting an adult website or purchasing something that should not be disclosed. They threaten the victims to disclose their interaction and frequency on such websites if they don’t hand over their credentials.

Cloud Mining

Cloud mining is a legit platform that lets you rent their mining hardware to mine crypto in exchange for some fees. While in yet another cryptocurrency scams the scammers made up some useless cloud mining companies. They may look very effective but in reality you will earn less than what was mentioned and the bigger portion of your earnings go to their pockets. In some cases, you even end up losing your whole deposit.

Fake Initial Coin Offerings (ICOs)

In ICO or initial coin offering, start-up crypto companies ask for the exchange of active crypto coins with the new coins. Usually, they offer to give discounts on the new coins and many companies actually do so. But there are also some fraudulent companies that intentionally promise everything. They go to extreme lengths like setting up a fake office as well. In the end, the victims end up losing a huge portion of their assets.

Fake Apps

Another one of common cryptocurrency scams is done by using fake apps. They are even available on known app stores like Google Play or Apple App Store. However, these stores are continuously on the look out for fake apps but by the time they dispose of them, these fake apps have stolen the crypto assets of many people.

Pump and Dump

In this kind of scam, scammers create a hype for a certain coin which in result causes investors to quickly invest in it. When the coin is pumped enough and the rates are increased, the scammer then sells their funds causing the market to crash in a matter of minutes.

How to Spot Cryptocurrency Scams

You can easily spot a crypto scam if you know what to look for. The things you should usually look for are:

Before the development phase, cryptocurrencies issue a ‘White Paper ‘ which is available for common people. In this paper they point out everything and how they will operate. Scamming exchanges do not produce white papers.
In case they do produce it, then all the team members are listed. Verify their identity before being involved in the exchange.
Celebrities will not contact you to invest in any platforms.
No crypto exchange claims for free items or coins.
Valid crypto exchanges do not claim themselves to be the best.
Instead they will only promote their block chain technology.

How to Avoid Cryptocurrency Scams

By now, you must have a good idea about common cryptocurrency scams. Now it’s time to know what steps should be taken and how to avoid them.

First thing first, do not contact or dial any phone number. Do not click on new links or send them any kind of money.
Stay away from any person that you have met online whether its a dating app or other social platform, who is asking for a money transfer or any kind of crypto deal.
Do not in any case send someone your private cryptocurrency keys. Any legitimate crypto exchange will not ask for your keys.
Any enterprise dealing in crypto or a new exchange that is promising huge money must be shun immediately. It’s a huge red flag.
End the call immediately if any one is contacting you as an investment manager and promising to grow the money quickly.
Do not reply to the mails from any new or in some cases a well known company saying that your account is freezed and they can help you recover it. Well known companies do not work this way and they might be hacked.
In case of receiving any email contact a regulatory agency. Do not in any case reply to the mail directly.
In case you are getting black mailed of disclosure of any explicit materials against you. Do not give anything to the blackmailer before checking their facts. It is instead wise to report them to the regulatory agency and tell them to not disclose anything.
Don’t engage in crypto mining companies that are promising for a huge or quicker return.

Bottom Line

Crypto world is a lucrative world where one can make or lose a huge deal of money in a matter of minutes. If your crypto is lost or stolen then there is no option to recover it. It is therefore very important to only trade the amount that you can afford to lose and also stay away from the scams at every cost.

In this guide we have tried to enlist 10 most common cryptocurrency scams and steps to show how you can avoid them. But if God forbid, you have been scammed then you can use the online complaint forms of these organizations.