Top 5 Common Cryptocurrency Scams

Top 5 Common Cryptocurrency Scams


In today's society, your cryptocurrency is a hugely valuable asset to crooks. It is easily movable, liquid, and nearly hard to reverse after completing a transaction. As a result, the digital space has been inundated with a surge of scams, including both time-honored favorites and frauds targeted specifically at cryptocurrencies. This article will discuss some of the most typical crypto frauds.

Social Media Giveaway Scams

In the vast realm of social media, it's fascinating how benevolence permeates the likes of Twitter and Facebook. Explore the responses to a highly-engaged tweet, and you'll likely encounter the allure of a giveaway orchestrated by one of your cherished crypto companies or influential figures. Their proposition seems irresistible—send a mere 1 BNB/BTC/ETH, and in return, they promise to multiply your investment tenfold! It's an offer that tantalizes the senses, conjuring visions of instant wealth. However, as the old adage goes, "If it seems too good to be true, it probably is." And indeed, in the world of scams, this rule of thumb often holds true.

The notion that a legitimate giveaway necessitates an upfront monetary contribution is exceedingly implausible. Caution should be exercised when encountering such messages on social media. While these communiqués may emanate from accounts that bear an uncanny resemblance to those you hold dear, this is an integral component of their deceit. As for the multitudes of expressions of gratitude directed towards said accounts, they are merely fictitious profiles or automated bots deployed as part of the giveaway ruse.

Needless to say, it is in your best interest to disregard these endeavors entirely. However, should you harbor an unwavering conviction in their legitimacy, scrutinizing the associated profiles will unveil discrepancies. It will not be long before you ascertain that the Twitter handle or Facebook profile is indeed counterfeit. Moreover, even if any reputable entity opts to conduct a giveaway, genuine undertakings will never solicit funds from participants in advance.

Pyramid and Ponzi schemes

Within the realm of fraudulent endeavors, pyramid, and Ponzi schemes, while exhibiting slight disparities, can be aligned under a single category owing to their resemblances. Both these stratagems hinge upon enticing participants to recruit new members by promising extraordinary returns.

The Intricacies of Ponzi Schemes

Ponzi schemes manifest in the guise of investment opportunities that guarantee profits—an initial warning sign. Often masquerading as portfolio management services, these schemes operate without mystical formulas. The purported "returns" bestowed upon investors merely consist of funds sourced from other participants.

The orchestrator of the scheme acquires funds from an investor, channeling them into a communal pool. However, the pool's sole source of incoming cash stems from new entrants. As fresh investors join, their funds are utilized to remunerate earlier participants, perpetuating a cyclical pattern. The scheme unravels when the influx of capital ceases, rendering it impossible to sustain payouts to earlier investors and culminating in its collapse.

Consider, for instance, a service that entices with the allure of 10% monthly returns. Imagine contributing $100 to this venture. Subsequently, the organizer secures the participation of another individual who also invests $100. Employing this fresh capital infusion, the organizer can provide you with a payment of $110 at the end of the month. However, to fulfill the payment to the second investor, the organizer must entice yet another individual to join. This cycle persists until the scheme inevitably implodes.

Unveiling Pyramid Schemes

In contrast, pyramid schemes demand greater involvement from participants. At the apex of the pyramid resides the organizer, who recruits a specific number of individuals to form the tier below. Each individual in that tier then proceeds to recruit their own set of participants, creating a cascading effect that expands exponentially and branches out as new tiers emerge, hence the term "pyramid."

At first glance, a pyramid scheme's structural framework may resemble that of a substantial and legitimate business. However, the differentiating factor lies in its promise of revenue generation by recruiting new members. Let us consider a scenario wherein the organizer grants Alice and Bob the authority to enlist new members for a fee of $100 each, retaining a 50% share in their subsequent earnings. Alice and Bob, in turn, offer the same proposition to those they recruit (requiring a minimum of two recruits to recover their initial investment).

For instance, if Alice successfully sells memberships to both Carol and Dan, priced at $100 each, she retains $100, as half of her earnings must be funneled to the tier above her. As Carol secures new memberships, the rewards gradually ascend—Alice receives half of Carol's revenue while the organizer claims half of Alice's share.

As the pyramid scheme proliferates, older participants accrue an escalating revenue stream as the burden of distribution costs is transferred from the lower to upper tiers. However, owing to the exponential growth rate, this model proves unsustainable in the long run. In some instances, participants pay for the privilege of selling a product or service, reminiscent of certain multi-level marketing (MLM) companies that have faced accusations of operating pyramid schemes in this manner.

Within blockchain and cryptocurrencies, contentious ventures such as OneCoin, Bitconnect, and PlusToken have encountered a severe backlash as users initiate legal action, alleging the operation of pyramid schemes.

Fake Mobile Applications

In our fast-paced digital landscape, it is easy to overlook the subtle warning signs that betray the presence of fraudulent mobile applications. These cunning scams often lure unsuspecting users into downloading malicious software, cunningly crafted to mimic the appearance of popular and trusted apps.

These deceptive apps may initially appear harmless upon installation, seamlessly blending into your device's interface. However, beneath their innocent facade lies a sinister motive—to pilfer your hard-earned cryptocurrencies. Within the crypto sphere, numerous instances have arisen where users unknowingly downloaded malicious apps, cleverly impersonating reputable crypto companies.

In this perilous scenario, when users encounter an instruction to fund their digital wallets or receive payments, they unknowingly funnel their funds into the pockets of these cunning fraudsters. Regrettably, once the transfer is complete, no magical undo button exists to rectify the consequences.

To exacerbate matters, these scams wield a potent weapon—their ability to attain high-ranking positions within prominent app stores such as Apple Store or Google Play Store. Despite their malicious nature, these deceitful apps masquerade as legitimate offerings, instilling an unwarranted sense of trust. Safeguarding oneself from falling victim to these treacherous traps necessitates unwavering vigilance. It is imperative to download apps exclusively from official websites or through links provided by trustworthy sources. Additionally, exercise caution when perusing the Apple Store or Google Play Store, scrutinizing publishers' credentials to ensure their authenticity.

Remain alert, for the digital landscape can be treacherous. By exercising caution and adhering to these measures, you fortify your defenses against the insidious realm of deceptive mobile apps.


Phishing, a familiar term even to newcomers in the crypto realm, encompasses the art of impersonation employed by scammers to extract personal information from unsuspecting victims. This malicious practice spans various mediums, including telephone, email, fake websites, and messaging applications. Within the cryptocurrency landscape, scams orchestrated through messaging apps proliferate.

Scammers lack a standardized playbook as they endeavor to seize hold of personal data. For instance, one may receive emails alerting them to issues with their exchange account, luring them to follow a link for resolution. Unfortunately, this link redirects to a deceptive website, strikingly similar to the genuine one, coercing users into logging in. Subsequently, the attacker pilfers their credentials, potentially compromising their cryptocurrencies.

On Telegram and Discord, a prevalent scam involves scammers lurking within official groups dedicated to crypto wallets or exchanges. Upon a user reporting a problem, the fraudster privately contacts the individual, assuming the guise of customer support or team members. Within this fabricated narrative, they manipulate the user into divulging personal information and seed words. 

Disclosing your seed words grants unwarranted access to your funds. Under no circumstances should such information be shared, even with legitimate entities. Authentic troubleshooting procedures for wallets do not necessitate knowledge of your seed phrase. Therefore, any party requesting this sensitive data can be safely assumed to be a scammer.

Exchange accounts also warrant caution, as most reputable services will never request your password. Consequently, if you receive unsolicited communications, it is prudent not to engage but to instead reach out to the company through the contact details listed on their official website.

Several security precautions are worth noting:

  1. Scrutinize the URL of websites you visit diligently. Scammers often register domains that strikingly resemble those of genuine companies.
  2. Bookmark frequently visited domains to mitigate the risks of search engines inadvertently presenting malicious alternatives.
  3. In the presence of doubt regarding a received message, exercise prudence by disregarding it and contacting the business or individual through official channels.
  4. Your private keys and seed phrase are privileged information known solely to you. Sharing them is unnecessary and can lead to dire consequences.

Vested Interests

Within cryptocurrencies, the acronym DYOR - Do Your Own Research - resonates emphatically, and rightfully so.

In matters of investment, one should never blindly accept the recommendations of others regarding the selection of cryptocurrencies or tokens. The true motives of these individuals remain shrouded in uncertainty. They may be enticed by financial compensation to endorse a specific ICO or possess their own vested interests. This cautionary principle applies not only to strangers but also to influential figures and renowned personalities. The success of no project is guaranteed; in reality, many will falter.

To objectively evaluate a project, one must consider a confluence of factors. Each individual possesses a unique approach to researching potential investments. However, several fundamental queries can serve as a starting point:

  1. Coin/token distribution: How have the coins/tokens been disseminated?
  2. The concentration of supply: Does the majority of the supply reside within the control of a select few entities?
  3. Unique value proposition: What sets this project apart from others?
  4. Competitor analysis: How does this project fare against similar endeavors, and what distinguishes it as superior?
  5. Team assessment: Who comprises the project team, and do they possess a commendable track record?
  6. Community dynamics: What characterizes the community surrounding the project, and what endeavors are currently underway?
  7. Necessity assessment: Does the coin/token genuinely address a compelling need within the world?

By engaging in meticulous research, you can navigate the treacherous waters of the cryptocurrency landscape with greater prudence and discernment.


In the ever-evolving realm of cryptocurrencies, malicious entities employ many tactics to exploit unsuspecting users and drain their funds. To shield yourself from the prevalent scams, perpetual vigilance and an understanding of the tactics used by these malevolent actors are imperative. Scrutinize the authenticity of websites and applications, ensuring they are official channels. Above all, bear the adage: if an investment appears too enticing to be genuine, it undoubtedly is.

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