Common Cryptocurrency Scams and How to Avoid Them


Common Cryptocurrency Scams and How to Avoid Them

Last updated on August 5th, 2022 at 09:52 am

In today’s world, With rapidly growing interest in crypto among investors, as more people are joining to take advantage of the huge profit potential of cryptocurrency markets, the rate at which criminal activities are conducted is also increasing leading to Common Cryptocurrency Scams.

If you have ever been the victim of a cryptocurrency scam you will know that getting the money back is the biggest problem, since it is impossible to track the transaction on the blockchain, and also there is little or no knowledge of whom the transaction was directed to.

Cryptocurrency is an incredibly tangible asset to criminals. It’s liquid, highly portable and, once a transaction has been made, it’s almost impossible to revert it. As a result, a tsunami of scams has flooded the digital world seeking to reap investors off their hard earned money.

In this article, we’ll identify some of the most Common Cryptocurrency Scams and How to Avoid Them.


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Common Cryptocurrency Scams and How to Avoid Them.

cryptocurrency scams

1. Social Media Giveaway Scams

It’s amazing, nowadays, how most investment communities seem so generous on the likes of Twitter, Telegram, and Facebook. Check the replies to a telegram group with high engagement, and you’ll see that one out of the many crypto groups you are in is doing a giveaway. If you send them just 1 BNB/BTC/ETH or any amount depending on how greedy the influencer is, they promise to send you back double or 10x that amount! It seems too good to be true but unfortunately, that’s because it is a scam.

On social media, it is advisable to be on alert to identify these kinds of messages and avoid them at all costs. They might come from accounts that might look identical to the ones you know, but this is part of the trick. You may come across dozens of replies thanking the account for their generosity – they’re simply fake accounts or bots deployed as part of the giveaway scam.

2. Ponzi schemes

In a Ponzi scheme, you might hear about an investment opportunity with guaranteed profits (first red flag!). Commonly, you’ll see this scheme disguised as a portfolio management service. In reality, there’s no magical formula at work here – the “returns” received are just other investors’ money.

The organizer will take an investor’s money and add it to a pool. The only inflow of cash into the pool comes from new investors. Older investors are paid off with newer investors’ money, a cycle that can continue as more members join. This type of cryptocurrency scam unravel when there isn’t any more cash coming in – unable to sustain payouts to older investors, the scheme collapses and the organizer makes away millions of dollars.

Consider, for instance, a crypto website that promises 10% returns in a month. You could contribute $1000. The organizer then brings in another ‘client’, who also invests $1000. Using this newly-acquired money, he can pay you $1100 at the end of the month. He would then need to convince yet another client to join, to pay the second one. The cycle continues until the inevitable implosion of the scheme, by then the organizer must have made away thousands or even more millions of dollars on how long the scheme lasted.


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3. Fake Mobile Applications

The issue of fake mobile applications being downloaded as a result of adverts from shady links is also a common cryptocurrency scam method applied by criminals.

Once a user installs a malicious app, everything might seem to work as intended. However, these apps are specifically designed to steal your cryptocurrencies.

When the user is presented with an address to fund the wallet or to receive payments, they’re sending funds to an address owned by the fraudster.

The ranking position on the Apple Store or Google Play Store of these malicious apps is another reason why people fall for their scams, as they are highly ranked on these sites giving them an air of legitimacy. To avoid falling for them, you should only download from the official website or a link given by a trusted source. You might also want to check the publisher’s credentials when using Apple Store or Google Play Store before downloading any application.

Crypto Scams

4. Phishing

Phishing typically involves scammers impersonating a person or company to extract personal data from victims. It can take place across many mediums – telephone, email, fake websites, or messaging apps. Messaging app scams like Telegram are particularly common in the cryptocurrency environment.

You may get emails or direct messages notifying you of something wrong with your exchange account, which requires you to follow a link to fix the problem. That link will redirect to a fake website – similar to the original one – that will prompt you to log in. This way, the attacker will steal your credentials, and possibly your cryptocurrencies.

How to Avoid Phishing:

Check the URL of the websites you’re visiting. A common tactic involves the scammer registering a domain that looks very similar to that of a real company (e.g.,

Bookmark your frequently visited domains. Search engines can mistakenly display malicious ones.

When in doubt about a message you’ve received, ignore it and contact the business or person via official channels.

Nobody needs to know your private keys or seed phrase.


Scammers have numerous techniques for usurping funds from unsuspecting cryptocurrency users. To steer clear of the most common cryptocurrency scams and avoid them, you need to remain extremely vigilant and aware of the schemes used by these parties. It is advisable to always check that you’re using official websites/applications, and remember: if an investment sounds too good to be true, it probably is, so the need to avoid them.


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Nwankwo Chigozie is a content writer and cryptocurrency enthusiast. He loves researching about cryptocurrency and everything surrounding the cryptospace. Follow on all social platforms.