10 crypto scams to know about in 2024

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Jun 18, 2024
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The popularity of certain types of crypto scams evolve over time. Let’s observe what you should be aware of in the upcoming year.

Ransomware
Crypto ransomware scams occur when hackers take over a victim’s device or account using malicious software, encrypt it, and then demand payment in cryptocurrency for the decryption key. According to , ransomware attacks cost companies over $456 million in 2022.

Ransomware scams are dangerous, resulting in data loss or leaks that wreak havoc on users and companies. That’s why it’s important to:

  • develop a robust cybersecurity strategy which requires a complex approach, including conducting risk assessment, reviewing security policies, etc.
  • use updated software and VPNs
  • never forget about backups of corporate data
Unfortunately, scammers have the power to decrypt encrypted accounts/data, including backups. In this case, report the attack to authorities and immediately consult with cybersecurity experts.

To get security tips for using blockchain, click .

Blackmail
Blackmail scams have been since 2018. This can be when scammers contact the victim claiming to have embarrassing personal information, including private photos or videos, which they will make public if their terms aren’t met.

Usually these scammers promise to keep this information private if the victim sends a crypto transfer straight away. Scammers use threats and other manipulation techniques to make victims pay.

As the , blackmail scammers can lie about the compromising information or content in their possession. So never reply to these emails or messages—or send any crypto transfers. Report these scams to the FBI or other relevant authorities.

Crypto phishing
Phishing is a classic scam that’s now widespread in the crypto world. It’s used to compromise login credentials, such as crypto wallet keys. Usually scammers send an official-looking email that asks the victim to log in to their account—which is actually a trap. Use link checker tools and check community reviews of unknown websites, if you’re not sure about the sender.

“Investment opportunities”
This is when an unknown “investment manager” contacts you promising a great return on investment and asks you to send crypto to their wallet.

These scammers usually have legitimate-looking websites or well-designed apps, using fancy investing jargon to seem real.

This is why it’s important to be vigilant. Here are some due diligence best practices to keep you safe from these scams:

  • Research the investor
  • Check the credentials of the “investment manager”
  • Request documentation on the terms and conditions of the investment
  • Beware of pressure techniques. The “manager” may rush you into making a decision. Don’t go for it.
Fake ICOs
Scammers may create and promote fake ICOs, convincing investors to buy tokens for a non-existent or entirely fraudulent project, and then disappear with the funds.

Impersonation
Crypto scammers can pretend to be a famous person (like Elon Musk on Twitter), a government agency, or law enforcement in order to steal people’s crypto. For example, they can impersonate the IRS to convince the victim that their accounts are frozen as part of an investigation—and then request payment in crypto to resolve the issue. They can also say they represent a large company like Amazon or FedEx and demand payment for a “fee”.

Giveaways
A crypto giveaway scam is when fraudsters pose as legit cryptocurrency exchanges, businesses, or notable individuals to deceive victims into sending them cryptocurrency. They typically promise to return double or triple the amount sent by the victim—only to vanish with the funds once received.

These scams are frequently promoted on social media platforms like Twitter and YouTube, and often involve fake websites resembling legitimate exchanges or companies. In some instances, they may impersonate well-known figures in the cryptocurrency community, such as .

Watch out for the following red flags to identify a crypto giveaway scam:

  • The giveaway is promoted on social media or dubious websites
  • It promises to return more cryptocurrency than you send
  • It requires you to send cryptocurrency to a specified address
  • It creates a sense of urgency or scarcity by claiming limited time or participant availability
If you encounter a crypto giveaway, be skeptical and do research to verify its legitimacy before sending any cryptocurrency. To avoid falling victim to such scams, consider these tips:

  • Only participate in giveaways offered by reputable cryptocurrency exchanges or companies
  • Avoid sending cryptocurrency to a specific address to participate in a giveaway
  • Be cautious of giveaways promising excessive returns on your investment
  • Exercise caution with giveaways that impose a sense of urgency or scarcity.
  1. Romance scams
Scammers use social engineering techniques to cultivate romantic relationships with their victims online, often using dating apps such as Tinder. The scammer may spend months to gain the victim’s trust, with the aim of gaining their trust and ultimately requesting payment in crypto—only to disappear in the end.

Suggested read:

Flash loans
Flash loans are a type of cryptocurrency loan that allows users to “borrow” funds without providing collateral, but there’s a catch—the borrowed funds must be repaid within the same transaction. These loans are typically facilitated through decentralized finance (DeFi) platforms.

Here’s how a typical flash loan scam works:

  1. The scammer borrows a significant amount of cryptocurrency through a flash loan from a DeFi platform, often without providing collateral.
  2. With the borrowed funds, the scammer engages in activities like market manipulation, arbitrage trading, or exploiting vulnerabilities in DeFi smart contracts.
  3. The goal is to generate a substantial profit by taking advantage of these activities within a single transaction.
  4. Flash loans require the borrowed funds to be repaid within the same transaction. If the scammer succeeds in making a profit, they repay the loan with a fee, which leaves them with the profit.
  5. The scammer then exits the transaction, sometimes leaving the affected DeFi platform or token holders with losses.
Pump-and-dumps
This is when the value of a crypto asset is artificially inflated by creating “high demand”. Usually, fraudsters use social media to build hype around an NFT or cryptocurrency. This drives up the price, making it difficult for investors to ignore. Once the price is high enough, the scammers immediately sell—or “dump”—the asset, causing a collapse in its price.

Check to learn more about blockchain scams.
 

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