Published Mar, 24 2023

Common Crypto Scams

Just like any other form of money, your crypto is vulnerable to scams. Cryptocurrency scams are becoming increasingly common and can be very difficult to detect and prevent. Much like the money in your bank account or the available balance on your credit card, your crypto wallet is a hot target for thieves and scammers. […]

Just like any other form of money, your crypto is vulnerable to scams. Cryptocurrency scams are becoming increasingly common and can be very difficult to detect and prevent. Much like the money in your bank account or the available balance on your credit card, your crypto wallet is a hot target for thieves and scammers. They've gotten pretty good at it, too. A lot of times, they can trick you into giving it to them willingly! When that happens, you'll really want to kick yourself. It's best to be prepared, know what to look for, and avoid these common scams at all costs.

Types of Cryptocurrency Scams

There are two ways to categorize cryptocurrency scams: those that involve stealing your crypto via access to your digital wallet and those that involve tricking you into transferring your crypto to an impersonator.

Here are some of the more common types of Bitcoin scams and how you can protect yourself from them:

Romance Scams

Romance scammers typically operate on dating websites, posing as potential romantic partners in order to gain access to your crypto wallet. They start off by building trust with you and then gradually get more intimate with their requests until they have complete access to your funds.

Their goal is to make you believe you're in a trusting, long-term relationship and then to milk you for all of your money. If a new romantic interest is asking too many questions about your finances, or if they’re pressuring you to send them cryptocurrency in any way, it's best to cut ties immediately and report them to the platform.

Social Engineering Scams

Social engineering scams are similar to romance scams, but instead of posing as a romantic partner, they typically pose as someone who's in need of help or is offering a special deal. For example, they might offer to double your crypto if you send them a certain amount of Bitcoin or Ethereum.

These schemes are usually quite elaborate and often include fake testimonials from people who have supposedly benefited from the scammer’s generosity. If something sounds too good to be true, it probably is. Don't trust any offers that seem too good to be true, and never give out your private key or send crypto to anyone you don't know.

Phishing Scams

Phishing is an old scam tactic that has been around since the early days of the internet. Hackers will use fake emails and websites that look legitimate in order to fool you into providing your account information, including private keys and passwords.

Phishing scams can also be carried out through text messages, social media messages, and phone calls. They'll often pose as a legitimate company or contact to try to gain access to your wallet.

If you receive an email, message, or call that looks suspicious, never click on any links or provide any personal information. The best way to protect yourself is to always double-check the source of the message and look for misspellings, typos, and other signs that it's not authentic.

Rug Pulls

Rug pull scams involve projects and crypto investments that seem legitimate at first but are actually designed to steal your money. The scammer will set up a project and have it listed on an exchange, often with fake trading volumes, in order to lure investors. Once they get enough people onboard, they'll quickly dump the coins and disappear with the profits.

To avoid falling victim to this type of scam, make sure you always do your research before investing in any project. Check out reviews and comments from other investors to get a better idea of how trustworthy it is, and never invest more than you're willing to lose.

Imposter and Giveaway Scams

Imposter scams involve scammers posing as legitimate crypto companies, like exchanges or wallet services. They'll often impersonate an established company and try to get you to send them your crypto in exchange for something else, like a “special deal” or a giveaway.

Giveaway scams are similar but target people who are hoping to win free cryptocurrency. Scammers will typically post a message on social media, promising to give away large amounts of crypto if you send them a small amount first. This is known as the “send me some Crypto, and I’ll double it” trick and should be avoided at all costs.

Investment or Business Opportunity Scams

These scams involve scammers offering to invest your crypto in a venture that promises high returns. They may also offer you the “opportunity” to join their business and make money by recruiting more people into the scheme.

However, these types of schemes are almost always Ponzi schemes, which means they don't actually pay out any returns. They'll typically require you to invest a certain amount of crypto upfront and then promise to “multiply” it, but in reality, they're just taking your money and using it to pay earlier investors.

Blackmail and Extortion Scams

In this type of scam, the perpetrator will try to blackmail or extort you by threatening to release sensitive information or images if you don't pay them in cryptocurrency. Usually, the threat involves revealing something embarrassing or potentially damaging that was shared online.

If you receive a blackmail attempt, never give in to their demands, and never send any crypto. Instead, report the incident to law enforcement and delete the message immediately.

IRS or Utility Payments

The IRS or Utility payments scam is one of the newer crypto scams. In this type of scam, the perpetrator will contact you and claim to be from the Internal Revenue Service (IRS) or a local utility company. They'll then demand that you pay your taxes or utility bills in cryptocurrency in order to avoid a penalty or disconnection.

These types of scams should always be reported to the IRS and/or your local law enforcement agency immediately. The best way to avoid falling victim is to never pay taxes or bills in cryptocurrency without verifying the identity of the person you're paying first. You should also never provide any personal information or banking details when making payments online.

Someone Says You're Being Investigated

This type of scam begins when you receive a call or email from someone claiming to be an investigator or law enforcement official. They'll then tell you that you're under investigation for money laundering, tax fraud, or some other crime and demand that you pay them in cryptocurrency in order to avoid being arrested.

These calls are usually phishing scams and should be reported to the proper authorities immediately. Law enforcement will never call you and demand payment in cryptocurrency, so if you receive a call like this, it's best to hang up and block the number.

Bitcoin Depot to the Rescue!

There’s no such thing as a perfect system, and anyone who tells you otherwise is probably trying to scam you. However, Bitcoin Depot BTMs are a simple and convenient way for you to buy Bitcoin

So the next time you decide you want to get some Bitcoin, go for a drive to the nearest Bitcoin Depot BTM.