What Is Crypto Scam? Get To Know All The Secrets For 2023

What Is Crypto Scam


Federal Trade Commission’s Q1 2022 Bombshell: $329 Million Vanished as Phoney Crypto Trading Apps Deceive Investors. It’s not quite the magic trick you’d want to see, especially if it’s your own digital loot disappearing.

Imagine the scene: a clueless user downloads an app, thinking they’re about to strike crypto gold. Caught off guard, they become unwitting stars in “Pirates of the Cryptocurrency,” losing their life savings and crypto assets to sly scammers.

In the battlefield of crypto investments, knowledge is your armor, and that’s exactly what we’re here to provide. Hold on tight as we plunge into this enlightening journey together!

How Crypto Scams Work?

Insight into workings of crypto scams.
Insight into workings of crypto scams.

Scammers use three primary tactics to conduct crypto scams:

Fake Crypto Wallets and Trading Platforms

Picture a chameleon in the crypto jungle, changing its colors to imitate the more noble beasts. That’s essentially what happens with fake crypto exchanges, wallets, and trading platforms. These crafty scammers create digital doppelgängers of reputable exchanges. And voilà! They have a foolproof trap to catch the unsuspecting crypto enthusiasts.

When a user logs into this illusionary platform, their credentials get gift-wrapped and delivered straight to the online bank account name of the scammers. It’s like handing over free money!

Fake Crypto Trading Apps

Think of this one as a wolf in sheep’s clothing – a deceptively innocent-looking crypto asset trading app that’s a cleverly concealed con. These scammers are akin to aspiring advertising executives, promoting their fake apps with the persuasiveness of a seasoned salesman.

These apps somehow snake their way onto legit sites to gain credibility. Building on that credibility, that’s when they strike your crypto account. An unsuspecting user installs the app, logs in, and BAM! The scammer then compromises all their data.

Fake Investment Opportunities and Trading Jobs

Imagine getting an email saying you’ve hit the cryptocurrency jackpot or landed a high-paying trading job. It’s like finding a golden ticket in your chocolate bar. Wrong. These scammers are not Willy Wonka; they’re more like Veruca Salt.

After baiting you with this too-good-to-be-true investment opportunity here, they request your confidential info to send cryptocurrency. And when you provide it, you unknowingly open the floodgates to your crypto kingdom. It’s like putting up a “Welcome” sign on your castle while the enemy army waits at the gates. Beware of Greeks bearing gifts, or in this case, scammers bearing crypto opportunities.

Malicious Crypto Scams to Look Out For

Identifying dangerous crypto scam schemes.
Identifying dangerous crypto scam schemes.

Here are some common crypto scams to look out for this year.

Blackmail and Extortion Scams

Welcome to the world of blackmail and extortion scams. This is where individuals exploit your personal information and digital assets. These deceptive actors claim to have uncovered sensitive details about you, holding them as leverage. They possess your deepest secrets or compromising photos, ready to expose them in the murky depths of the internet. Their demands come as a ransom, requiring a portion of your hard-earned cryptocurrency.

Picture it as an unsolicited pen pal with no interest in friendly correspondence. Instead, they seek to drain your crypto holdings. They possess the qualities of a bully and a thief, an unwelcome presence in your digital life. Therefore, it’s crucial to remember to stand up to these malicious individuals, employing safety measures and safe practices.

False Job Listing Scams

Visualize a shiny job listing bedazzled with promises of lucrative pay for barely any elbow grease. It seems like a dream come true, right? But hold onto your hats and crypto folks because you’ve just set foot in the twilight zone of False Job Listing Scams.

Here’s how this scam plays out: You come across a fraudulent website with a too-good-to-be-true job offer that excites you. The hiring process on fake websites seems lightning fast, leaving you “hired” in no time. However, there’s a catch—you must submit a “security deposit” in cryptocurrency. Trusting the opportunity, you comply, eagerly anticipating the commencement of your dream job.

However, when the moment arrives for you to start your new role, your elusive “employer” has vanished. And as for your crypto coins? They have vanished, much like a flaky Tinder date after a dreadful dinner. Therefore, exercise caution when a job offer seems too good. It may be a one-way ticket to Scamsville.

Giveaway Scams

Stay vigilant against giveaway scams.
Stay vigilant against giveaway scams.

Giveaway scams paint a rosy picture where rainbows meet pots of crypto gold. All they need from you is a ‘tiny’ donation of your crypto coins.

BUT! Brace for the plot twist. As soon as you transfer your crypto, your visions of rainbows and pots of gold evaporate away. You’re left clutching at thin air while the scammer, this crypto Grinch, has made off with your generous ‘gift.’

Impersonation Scams

Impersonation scams mimic sci-fi shapeshifters, assuming identities swiftly—from government officials to law enforcement—in a blink. Their deceitful desire to obtain your sensitive account information drives their intentions. 

Once you are convinced of their authenticity, these fraudsters manipulate and deceive, aiming to acquire sensitive personal information or gain unauthorized access to crypto wallets. Users must remain vigilant, verifying the legitimacy of any communication or interaction in the crypto space to protect themselves from these impersonation scams.

Investment Scams

Beware of fraudulent investment schemes.
Beware of fraudulent investment schemes.

Investment scams are the crypto equivalent of a stage magician. Likes of the one who swears he can pull out a gold rabbit, but all he pulls out is your hard-earned cash.

These sneaky scammers play the role of Midas, claiming they have the golden touch in the crypto world. They’ll sweet talk you, promising to turn your humble pile of digital coins into a veritable gold mine. They even go the extra mile by investing in your crypto, and profits start flowing. It’s like a dream, right?

Hold onto your wallets, folks, because this is where the plot takes a nasty turn. Just when you’re feeling as snug as a bug in a rug, they suddenly disappear. The worst part? They block you faster than a Hollywood star dealing with paparazzi!

Pump and Dump Schemes

Pump-and-dump schemes typically involve artificially inflating the price of a cryptocurrency by spreading false information or creating hype around it. The goal is to lure unsuspecting investors into buying the cryptocurrency at an inflated price. Once the price reaches a peak, the orchestrators behind the scheme sell off their holdings, causing the price to plummet. This leaves those who bought in at the inflated price with significant losses.

Pump-and-dump schemes prey on greed and fear, taking advantage of individuals looking for quick profits in the volatile crypto market. It’s important to understand that these schemes are illegal and unethical. They manipulate the market and harm the overall trust and credibility of cryptocurrencies.

To protect yourself from falling victim to pump-and-dump schemes, it’s crucial to conduct thorough research before investing in any cryptocurrency. Look for reliable sources of information, examine the project’s fundamentals, and assess the long-term viability and potential of the cryptocurrency. Additionally, be cautious of investment advice or groups that promise guaranteed returns or profits or promote suspiciously rapid price movements.

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Romance or Dating Scams

In the high-stakes drama of crypto-land, even the path of true love is fraught with peril. Say hello to the crypto Casanovas, only with less poetry and more petty theft, the romance scams.

These fraudsters slyly slip into the scene, using dating apps as their stage. Like a wolf in a sheep’s dating profile, they woo unsuspecting victims with sweet nothings and charming chats. It’s all roses and moonlit walks until the plot twist: They demand your precious crypto coins.

Once they’ve swept you off your feet and into the dizzying heights of affection, they drop the bomb. Darling,” they say, their digital eyes twinkling with deceit, “could you lend me some crypto?” And before you can say, “But we just met!” they’ve vanished into the ether, leaving you clutching an empty crypto wallet instead of a bouquet of roses.

It’s a tragic tale of love lost and wallets lightened, a romance scam that gives ‘ghosting’ cryptocurrency payments a whole new meaning. So remember, when it comes to online love, keep your heart open, but your crypto wallet closed. You don’t want your digital love story to end in digital bankruptcy via romance scams.

Cloud Mining Scams

Cloud Mining Scams have become a troubling issue within the crypto industry. It is also known as remote mining and allows users to mine cryptocurrencies without expensive hardware or technical expertise. However, not all cloud mining platforms are legitimate, and many are scams.

In a typical cloud mining scam, companies promise high returns and guaranteed profits to attract unsuspecting investors. They claim to have powerful mining equipment and offer enticing packages or contracts for users to purchase. However, once users invest their money and start mining, they soon realize that the promised returns are too good to be true.

These scams often operate using a pyramid structure, where early investors are paid with new investors’ funds. As more people join the platform, the scheme becomes unsustainable and eventually collapses, often luring investors and leaving the majority of participants with significant losses.

How to Spot Cryptocurrency Scams?

Recognizing telltale signs of cryptocurrency scams.
Recognizing telltale signs of cryptocurrency scams.

Join us as we channel our inner Sherlock Holmes to uncover the cunning tricks of the crypto scam world:

Unbelievably Profitable Schemes

Should you come across an online investment scheme that showers promises of staggering profits akin to winning the lottery every day for a week, alarm bells should start ringing. Remember, if it sounds like a fairy tale, you’re probably not dealing with Cinderella but a wicked stepmother in disguise instead. Always remember, in the crypto kingdom, unicorns are as real as pots of gold at the end of rainbows—pure fantasy.

“Pay A Fee” Job Posting

These job postings require job seekers to pay a fee or upfront payment before they can apply or gain access to job opportunities. They are often associated with scams or unethical practices. It’s important to be cautious and research thoroughly before engaging with such postings to protect yourself from potential fraudulent activities.

Unreliable Opportunity Communication

Have you ever been invited to a party by a friend of a friend’s cousin’s neighbor, whom you’ve never met? Consider it sketchy if an opportunity comes knocking through an email, phone call, or text without hinting at a physical meeting. Even in the digital age, reputable opportunities still value face-to-face interaction—or at least a Zoom call. When it comes to crypto, don’t dance with strangers without a proper introduction.

How to Prevent Cryptocurrency Scams?

Securing your investments from crypto scams.
Securing your investments from crypto scams.

Welcome to Scam Prevention 101, where we arm you with the tools needed to keep your digital wallet and crypto exchanges safe from the sneaky hands of the scammer community.

Use Cold Crypto Storage

Cold storage for cryptocurrency safety.
Cold storage for cryptocurrency safety.

Think of your cryptocurrency like an ice cream sundae on a hot summer’s day – if you leave it out in the sun, it will melt away. In crypto terms, ‘sun’ equates to hot wallets vulnerable to cyberattacks. So, make like a savvy squirrel and stash your precious crypto coins in cold storage. Cold wallets, like Ledger Nano S, are like having a secret fridge for your sundae, safe from the sweltering sun of cyber theft.

Avoid Responding to Unsolicited Communications

If you’ve ever received a surprise email, call, or text from an unknown source promising crypto riches, remember the golden rule: don’t feed the trolls! In this case, ‘trolls’ are crypto scammers.

Verify Credentials

If a supposed authority figure suddenly calls you asking for your confidential info, treat it like a surprise pop quiz. Your first task? Verify their credentials from the main source. It’s like checking a shady magician’s hat for hidden rabbits before they start their magic trick.

Take Consultation

Stepping into the world of new crypto schemes without advice or crypto insurance is like navigating a minefield blindfolded. It’s risky and scary, and you will likely step on a scam. So, before you decide to invest, consult with a crypto expert. They’re like your scam detection dog, sniffing legitimate opportunities from the stinky scams. Let their noses lead you on the path to safe investments.

How to Report Cryptocurrency Scams?

Informing authorities about crypto scams.
Informing authorities about crypto scams.

These are the four respective authorities you must inform if you find yourself being scammed:

Commodity Futures Trading Commission (CFTC)

The CFTC is a great place to start your retaliation if you’ve been bamboozled by a crypto scammer. Think of them as your financial Avengers, ready to swoop in and investigate your case. Remember, it’s less “Hulk Smash” and more “Hulk Submit Detailed Report.”

Federal Bureau of Investigation (FBI)

FBI investigation
FBI investigators are catching bad guys.

When scammers come knocking, who’s the go-to hero? The FBI, naturally! Armed with the tenacity of Sherlock Holmes on an espresso high, they’re the real-life crime-fighting squad you need. With unmatched determination, they may not sport flashy gadgets and suits, but their ability to track down scammers is unparalleled.

Federal Trade Commission (FTC)

For those crypto-scam blues, consider the FTC your trusty therapist. By reporting to them, you contribute to their enormous scam database, helping paint a bigger picture of these fraudulent practices. It’s like adding a piece to a jigsaw puzzle that, once complete, will look a lot like a scammer behind bars.

Internet Crime Complaint Center (IC3)

In the digital age, every superhero squad needs an online counterpart, and that’s where the IC3 steps in. Think of them as the cyber ninjas of crime-fighting. No scam is too sneaky, and no con is too cunning. Just submit your complaint and watch them get to work.

After your reporting spree, it’s time for some damage control. Be sure to change all your credentials faster than a chameleon changes colors. This will throw off any lingering scam artists from your digital scent.

And remember, sharing is caring. Warn your fellow crypto holders on social media about the many crypto scams you encountered. Consider it a public service announcement to your crypto comrades, helping them dodge the scammer-shaped bullets you’ve just faced. It’s like being a superhero but with fewer capes and more cautionary tweets.

Reporting procedures for cryptocurrency scams.
Reporting procedures for cryptocurrency scams.


To wrap it up, the crypto world is a bit like the Wild West—filled with opportunities and riches but bandits waiting to take advantage of the unprepared. From the shape-shifting impersonation scams to the tragic love stories of the romance scams, you’re up against a colorful array of cyber outlaws.

However, with the right knowledge and caution, you can avoid these two digital currency desperados and keep your precious crypto coins safe.

It probably is, if it sounds too good to be true—like instant wealth or a free lunch. Always verify credentials, consult with an expert, and keep your personal information closer than your best buddy.

And if you do fall victim, don’t beat yourself up. Reporting your crypto scams to the relevant authorities and sharing your experience to warn others is paramount. Remember that knowledge is your greatest weapon in the tumultuous terrain of crypto transactions.

If you want to know more about crypto, leverage the resources at Coinweb. Explore a treasure trove of knowledge, expert insights, and up-to-date information to enhance your understanding of cryptocurrency.

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