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Cryptocurrency Guide | Guides

5 Most Common Cryptocurrency Scams 2024

Author

Jay Solano

Tags

Tags Editor's Choice / Slider Posts

Reading time

4 mins
Last update

Author

Jay Solano

Tags

Editor's Choice / Slider Posts

Reading time

4 mins
Last update

Author

Jay Solano

Tags

Editor's Choice, Slider Posts

Reading time

4 mins
Last update

crypto scams

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Key Takeaways

  • Cryptocurrency is targeted for scams. Unlike traditional money, crypto transactions can’t be reversed, making it risky for new investors. 
  • Always research and verify before investing. Don’t rush into investment opportunities, especially ones that sound too good.
  • Protect yourself by staying informed. Get informed about scams and report suspicious activity to the authorities.

Cryptocurrency is a type of digital money that has become popular. Unfortunately, with this popularity scammers are targeting crypto investors. Since crypto is different from regular money, no banks or government protections exist to get your money back if you’re scammed. This makes it risky for people who are new to crypto and don’t know how to keep it safe. This article will explain how these scams work and how to spot them, so you can keep your crypto safe.

Top 5 Common Crypto Scams to Watch Out

Cryptocurrency scams are becoming more common. Learn about these scams so you can keep your crypto safe. Many crypto scams involve pretending to be someone you trust, like a company or friend. They’ll also make up convincing stories to manipulate you into giving them your money or personal information. The most common crypto scams include the following: 

  1. Phishing scams 

Phishing scams are like fake emails pretending to be from a legitimate company. These scammers trick you into giving them your personal information, especially your crypto wallet keys. They might send you an email that looks real, asking you to log in to your account. But if you click on any links or give them your information, they could steal your crypto. 

  1. Pump and Dump Schemes

Scammers will try to convince everyone that a specific cryptocurrency is rising (the pump). They’ll use social media to create a lot of excitement and work together to drive up the asset’s price. Then, all of a sudden, the scammers will sell all their coins (the dump), making a big profit. Everyone else who bought the coin at a high price will be left with useless coins.

  1. Investment Scams

Someone you don’t know will contact you randomly with an investment opportunity in a specific cryptocurrency. They’ll rush you to send your crypto through their website or app. These websites might look convincing, but they’re fake. If you send them your crypto, you might not be able to get it back. They might even prevent you from accessing your account or charge you a fee to withdraw your money. 

  1. Impersonation Scams 

Scammers might pretend to be from the government, police, or even a company you trust or your bank. They’ll make up stories to manipulate you into giving them your crypto. For example, they might say your account is frozen and you must pay them in crypto to fix it.

Remember, no real company or government will ever ask you to send them crypto. If someone contacts you claiming to be important and asks for your crypto, it’s a scam.

  1. Romance Scams 

Cryptocurrencies have become a new target for online romance scams. They create fake online profiles to build trust and emotional connections with victims. After developing a bond, they introduce cryptocurrency. The scammer then pressures the victim to send crypto or invest in a specific currency, tempting them to a future life together. 

To avoid this, don’t fall for online relationships, never send crypto to someone you haven’t met, and conduct market research. Don’t rely on financial advice from strangers online, and trust your instincts if something feels suspicious. 

How to Spot a Crypto Scam

The world of cryptocurrency can also be a target for scammers. But don’t worry, with some knowledge, you can easily protect your hard-earned crypto. Here are some common red flags to watch out for:

  1. Unrealistic Offers

If someone offers you a large amount of free crypto in exchange for minimal or no work, it’s a scam. Long-time opportunities require time, effort, or some investment. The crypto market is volatile, and nobody can guarantee future profits. Beware of anyone promising you a specific return on your investment.

  1. Fake Job Offers

Real job opportunities won’t require you to pay a fee to apply or get hired. If someone asks you to send money to secure a crypto job, it’s a scam.

  1. Unexpected Contact About Your Crypto

Legitimate companies won’t pressure you to log into your account via email, phone, or text. If you receive such a message, don’t click any links and never share your login information.

How to report crypto scams

The following contacts can help you hold scammers accountable for their actions:

  • Commodity Futures Trading Commission (CFTC) at CFTC.gov/complaint.
  • Federal Bureau of Investigation (FBI) at https://www.fbi.gov/contact-us.
  • Federal Trade Commission (FTC) at ReportFraud.ftc.gov.
  • Internet Crime Complaint Center (IC3) at ic3.gov/Home/FileComplaint.
  • U.S. Securities and Exchange Commission (SEC) at sec.gov/tcr.

Final Thoughts

The unregulated nature of cryptocurrency makes it attractive to scammers. This article is a reminder to be cautious, especially for new investors. Remember, crypto transactions are permanent – one wrong move and your money could be gone.

Before investing, watch out for unrealistic offers and go with your instincts. Learn about common scams and don’t hesitate to report suspicious activity. Following these steps, you can master cryptocurrency and protect your hard-earned investments. Use secure storage options like hardware wallets for an extra layer of protection. Remember, a little knowledge goes a long way in keeping your crypto safe.