In this year alone, many investors have been scammed of billions of dollars in cryptocurrency. Years and years of investment are gone with the wind, with no way to get it back.

This is NOT to scare you.

If you are a seasoned cryptocurrency investor or just starting out in this wild journey full of potential, you really need to be aware and learn to protect yourself from these scams and schemes.

You will be surprised at how many people have already fallen victim to some of the most unbelievable and audacious scams and hacks, that could have been avoided.

Yes. If only every crypto investor knew the techniques of these con artists, and how to avoid them, then maybe the crypto world would be a much safer space to buy, trade, invest and transact in.

That is the purpose of this article. So, without any further ado, here are some of the most dangerous cryptocurrency scams you should avoid:

1. Phishing scams
2. Investment frauds
3. Man-in-the-middle cyberattacks
4. Extortion
5. Crypto giveaway scam
6. Celebrity endorsement scam

Phishing Scams

This is one of the most common scams ever. Victims unwittingly give out their passwords, credit card information, remote access, security numbers, login info, two-factor authentication codes, birthdates and other sensitive information.

When it comes to crypto, what phishers are most interested in is the digital wallet key, in order to gain access to the victim’s crypto funds.

And this is how they do it. They’d use emails, fake/unsecured websites, phone numbers or social media sites to lure targets, with attractive promises.

Many of them impersonate cryptocurrency apps and platforms or even Bitcoin wallets. Others issue a ‘security alert’ to trick you into clicking links to fake websites. And if you do not pay close attention, you’d be so easy to fool as these scammers are getting better and better at mimicking trusted websites. This is called website or domain spoofing.

Did you ever hear of Seth Green’s stolen Bored Ape? This scam stripped him of his entire NFT collection, including his Bored Ape Yacht Club #8398, a Doodle NFT and two Mutant Apes after he was tricked by a phishing scam.

The most painful part of this scam is that Seth Green did not only lose hundreds of thousands of dollars, but he also lost his intellectual property in the Bored Ape (a character he had created for a comedy series). It was resold to a collector on the aftermarket. He had to buy his Bored Ape back though.

I’m sure you’ve heard lots of stories about people falling for phishing scams. They are quite popular and you don’t want to fall victim. This is one dangerous crypto scam you’ll want to avoid.

Investment Frauds

This crypto scam is incarnate of the traditional investment scams that mankind has had to deal with for donkey years. It is hinged on the idea that there’s a quicker and easier way to make money.

It’s like this. Fraudsters will say, “Give me your money or crypto and I’ll invest it,” while promising outlandish results. Meanwhile, they have no intention of investing it for you.

This is not to say that it is impossible to have legitimate investments done for you. But too many people have fallen for this scam that it has become so imperative for investors to diligently do their own research, gather proof and be sure that whatever they are investing in is legit. We can’t stress this enough.

According to America’s Federal Trade Commission (FTC), consumers lost more than $80 million to cryptocurrency investment scams during Bitcoin’s last bull run. Some of these investment scams include pyramid schemes, phoney investment managers, job offers, employment and business opportunity scams and so on.

The Day of Defeat is one scam that has a lot of red flags plastered all over it. It came promising victims a ‘radical social experiment’ that would multiply their investments by 10 million and the masterminds of this fraud said it — their plan was a ‘mystery plan’. After that, they promised not to redeem but they pulled out 1.35 million, which caused the value of the token to immediately drop by 96%. Wild.

It’s crazy and we don’t know why, but many believed this blatant lie.

Man-in-the-middle Cyberattacks

This is a cyberattack that happens with the use of Wi-Fi in public places like libraries, airports, coffee shops, restaurants, and so on.

How is this done? It is done by intercepting the data between your device and the internet router. When the cyber attacker can intercept your data, then he can read your passwords, private keys, login details and more.

So, if you’re logging into a cryptocurrency app using this public Wi-Fi, they can gain access to your cryptocurrencies. Who knows? Sometimes, they are able to intercept the signal from your home or trusted networks.

So, you’ve got to be extremely careful.

Extortion

This one, you might find weird. But people really fall for it and there’s a reason for that.

An extortion scam comes with a threat from fraudsters. Some of them would go as far as buying your old password from the dark web, only to send you an email to coerce you to send them some of your cryptocurrency.

This scam thrives on fear.

The con artists sometimes claim that they have access to your computer or camera and have private pictures and videos of you. Then they go ahead to threaten that they would release them, to force you to send them your crypto.

This particular type of extortion is called ‘sextortion’. Don’t fall for it. While we agree, that some of these emails may be very scary, many of them are just an attempt to scam you.

So, in such scenarios, ignore them, run a malware scan, change your password or simply report the mail as spam.

And you’ll be fine.

Crypto Giveaway Scam

Giveaways have become increasingly popular in our social media world. Granted, there are many charitable individuals scattered all over the planet. In the same way, some fraudulent people would try to scam you, while pretending to do you good. So, be very careful.

These giveaway scammers operate on social media platforms like Facebook, Twitter, Instagram and so on. They will post screenshots showing fake messages from renowned companies or celebrities.

For example, there are lots of them trying to convince unsuspecting crypto owners about Elon Musk promoting a giveaway. If you unwittingly click on these posts (which tend to look real, by the way), you’ll find yourself on a fraudulent website.

Now, they’d probably ask you to verify your address by sending crypto to their own blockchain address, in order to access the giveaway. DON’T do it.

If you unfortunately click on a fraudulent QR code or link, enter your account information or do anything else they ask you to do, you may lose a huge amount of your hard-earned money.

So, be wary. Be very wary. Do your diligent research. Check and double-check every domain and website you go on and don’t forget to report scams if you uncover any.

Celebrity Endorsement Scam

This is very akin to giveaway scams. Nevertheless, this scam in particular deserves a deep-dive explanation because apparently, REAL celebrities have actually been tricked to promote cryptocurrency scams. And if you are only focused on the fake ones, you might fall for the real ones.

While celebrity names like Ed Sheeran, Richard Branson, Mel Gibson and Chris Hemsworth have been used to push fake celebrity scams, BBC has also been a victim of the real celebrity scam.

In this instance, they were scammed into endorsing a crypto investor, Hanad Hassan, by publishing an article about him on their website. The story stated that Hassan invested £50 into crypto and was able to turn it into millions in a few months. The article then went ahead to announce that Hassan wanted to use his newfound wealth to help people within the community.

Even though there were many people claiming that Hassan had scammed them, he launched a “charity token” called Orfano, which would set aside 3% of the funds to support charity projects. This is a common tactic in crypto scams to make investors feel like they’re doing something good and charitable with their money.

Months later, Orfano abruptly shut down, taking everyone’s investments with them. There was no way for users to withdraw any of their money.

One month later, Hassan did it all over again and some people fell for the scam AGAIN!

Other Dangerous Crypto Scams to Avoid

1. Fake websites and crypto exchanges
2. Tech support and security impersonation scams
3. Employment scams
4. Pump and dump
5. Unsustainable projects
6. Rug pull
7. Day of defeat
8. Registered broker scam
9. Meme coins
10. Spoofed and imposter websites
11. Romance scam

How to Protect Your Cryptocurrency

It’s not enough to know what scams and cyberattacks exist. It is also very important to know how to protect your investment. Here are a few pointers.

1. Protect your cryptocurrency with a digital wallet.
2. Make sure your crypto software is trusted and always updated.
3. Avoid suspicious links and websites.
4. Get a VPN to encrypt all data going to and from your device. So, if a hacker intercepts your data at a coffee shop, for instance, they won’t be able to read it due to that encryption.
5. Look for grammatical errors, misspellings, strange words and anything that looks dubious.
6. Get yourself a very strong password.
7. Always check that there is a locked padlock icon in front of the URL of any website you enter sensitive information.
8. Never share your password or any other sensitive information with anyone. Also, do not give access to your digital wallet, cryptocurrency software, etc., to anyone.
9. Don’t make crypto-related decisions in a hurry. Scammers always want you to move fast, without thinking. But you will do yourself a lot of good if you take your time and think properly about what you are about to do.

In Conclusion

Stories of investors losing money to one crypto scam or another have made a lot of people wary of cryptocurrency. It is so easy to think that the entire industry is full of scams and scammers.

The truth is, there is a lot of good in the crypto space and if you are careful enough to take the steps required to protect your digital assets, you’ll find that cryptocurrency is a positive innovation that can work to help you build wealth.

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