Crypto Scams

Cryptocurrency scams and how you can actually avoid them?

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Do you want to invest in cryptocurrencies? Did you wish you had invested in Bitcoin during its 2017 boom?

Chances are, many would answer affirmatively to those questions, and understandably so. After all, these cryptocurrencies are worth a lot these days, so it should not come a surprise that a lot of people, including you, would want to invest in them.

But a decade ago, these bitcoins were virtually worthless. It was only in 2011 when a bitcoin’s price went above $1.

In short, the latest volatility involving bitcoins (ranging between $3,000 and $20,000 since 2017) does not matter to a person holding bitcoins all the way back in 2010. The volatilities do not lay down the difference between rich and poor; it’s actually the discrepancy between a rich person and a filthy rich one.

Simply put, people who’ve had bitcoins even at the beginning are now, at least in theory, wealthy.

Today, your cryptocurrency is considered a highly valuable asset to cybercriminals. After all, it is liquid, very portable and, as soon as a transaction has been processed, you can bet that it is almost impossible to undo it.

Because of this, a flurry of scams (both classics that have been there for the past decades and cryptocurrency-specific activities) have flooded the online realm.

Given the number of cryptocurrency scams these days, how do you avoid them and make sure that you would not end up one of their victims?

Here are some ways how you can avoid these pitfalls.

Scams, scams, scams

It is not shocking that there are scammers out there who offer people a “brand new” cryptocurrency that one can join “at the very beginning” can be a good way of defrauding people of their money.

There are some people out there who want to peddle an initial coin offering that promises the world everything – and can do so without the need for an actual product, stock, or even intellectual property – except an amazing-sounding for the cryptocurrency and a nice-looking website.

A cybercrook can invite and recruit people to put in their “investments” using some fake testimonials and an impressive background information of how other cryptocurrency values began that way.

You would be surprised at the amount of people who end up being victimized by such a trap. They think, “Oh, this can be the next Bitcoin,” when in reality their “currency” is really intended to defraud people of their hard-earned money.

Building a pyramid

A wily person can show you a website showing their new cryptocurrency steadily rising in value, thanks to some sort of “mining and trading” growth. The cybercriminal might even give you “dividend” payments regularly at some point to early investors to convince them that the “currency” is really doing well.

The crook can even plan and make “dividend” payments to you or early investors to “prove” that the product is doing well. For instance, you might check your account in the website and you would see that the initial investment you made – say, $10,000 – is now worth $60,000, you might be enticed to “withdraw” some of the money, which might be subjected to some investment period limit restricting you from getting all your “gains” at once.

If you have invested $10,000 and the cybercriminal allows you to cash out a certain dividend from your investment, you might feel you have hit the jackpot.

However, in the unregulated work of cryptocurrency investments, you would find out there are hardly or very few legal safeguards to ensure that the small dividend you have gotten are really the earnings of your investment, and is just a small percent of your initial investment.

Your “dividend” may have been gotten from the investment put in by later investors, thinking their money went to a product that already rose in value, but when in fact, it did not.

This a classic feature of a pyramid or the so-called Ponzi scheme. Later on, the pyramid tumbles, and the only ones left, are victims who, in an instant, lost their investment worth thousands of dollars.

If you are planning to invest in a cryptocurrency, these are some of the things you should watch out for:

Fake or questionable crypto investment platforms

Fake crypto investment exchanges are a real threat. Four years ago, there was a fake exchange in South Korea that looked legitimate and presented itself as a stakeholder in the crypto trading community. The site later swindled buyers and investors millions of dollars before financial authorities intercepted their operations.

As much as possible, avoid cryptocurrency exchanges that are fake and questionable. You must go to recognized crypto investment exchanges only. Visit forums related to the topic and just subscribe to known RSS feeds or notifications. That way, you can receive news or updates of various fake crypto exchanges on time. Stick to trustworthy crypto platforms so you can have access to genuine investment opportunities.

Mining scams

Cloud mining enables regular investors without having posh hardware or equipment to mine cryptocurrencies. This activity can be indeed a well-paying endeavor.  But if you are investing for the first time, you might have a hard time looking which services are authentic, and which sites just you to hand over your hard-earned money to them?

A good method to look for which websites or businesses are fake is by looking at their lofty promises. What are they promising to you? Are they too grand or luring for you? If that is the case, avoid them. Because, in most chances, they are just trapping you to put their money on their website or business.

Some sites may promise you highly impossible returns on the investment you have and do not mention the secret fees they apply on these returns. Their servers are wily designs just to take money or investments from unsuspecting investors like you. No authentic firms should be able to give you a solid profit just like that.

Always be on the lookout when it comes to signing up for any cloud mining server out there. You have to consider your data security on the system you have before you surf online using a shared server.

“Pump and Dump” schemes

It is quite common for various scammers to purchase a new cryptocurrency en masse. This increases that currency’s market price and might even trigger the “fear-of-missing-out” attitude among the investors out there.

Once there is traction, new investors can begin invest their money in the new coin. When prices become higher, the scammers can their sell their coin shares for a higher money return.

In today’s securities markets, this practice is considered illegal. But in the world of cryptocurrencies, this practice happens in the industry’s gray zone.

As much as possible, avoid these pump and dump schemes. How? Choose more established and stable currencies such as Bitcoin. Read news about the cryptocurrency industry. Stay updated.


New investors, in most cases, do not always know the ins-and-outs of cryptocurrency or the industry as a general before and during the investing phase. This problem has given various malware programs the opportunity to evolve. Thus, it is no surprising that malware programs offer newer and even bigger threats to investors.

Modern malware activities that focus on cryptocurrency users as well as investors have no problems latching onto their user accounts in order to retrieve their online wallet balance, get the money from their accounts, and even replace the authentic address they have with that of the cybercriminal.

Aside from updating and improving the antivirus and system firewall in your computer, you should have a secure platform that bars you from running or downloading .exe files or at least ask you before you download potentially suspicious or problematic attachments.

Impostor websites

You have to be on guard for impostor websites.

You might be surprised, but there are a good number of sites out there that look like they are original and legitimate startup companies. If the site does not have a small lock icon that indicates security or it does not offer “https” in the website’s site, then you have to think twice before visiting, much less investing your hard-earned money.

Fake mobile apps

Another frequent way a cybercriminal can trick potential cryptocurrency investors is using fake applications that you can download using Google Play as well as Apple App Store.

Although a lot of stakeholders can often immediately look for these fake applications and have them removed, that actually does not mean these applications are not affecting a lot of bottom lines. A report says a lot of people have in fact downloaded and used these fake cryptocurrency apps.

While this practice may mean a bigger risk for users of Android phones, any investor has to be aware and critical of the possibility. For example, are there noticeable misspellings or errors in the copy of the description of the product or even the application’s name?

Does the company or app’s branding look inauthentic for you with weird coloring or like an incorrect logo? Do take note and check whether you want to download the application.

Social media updates

If you have subscribed to celebrities or top-profile corporate executives on social media – say Twitter, Facebook, or LinkedIn – you might not be sure if you are following are their real or fake accounts.

That understanding should also be your guideline when it comes to following websites or pages about cryptocurrencies.

Scamming emails

When you received an email from a supposedly legitimate cryptocurrency company, you have to make certain steps before you part with your money.

Is the email address the company provided the exact same? Is the company’s logo as well as the branding message identical? Is it possible to check the email address of the sender is actually connected to the company?

The capacity to examine this is one big reason why it is crucial to select a firm that has actual employees. If just in case you have questions about an email from the company, you can ask a person who actually works there.

Scammers usually tell users or investors fake initial coin offerings, as a method to get substantial funds. As an investor, of course, you should not fall for fake or suspicious email and website offers. You should take your time as much as possible to study and examine all the details.

Unfortunately, some online users may use computing systems that are unsecured so that they can mine or steal even “currency” through you or any prospective investor.


Malicious actors have a whole array of techniques for getting money from unsuspecting people like you or other cryptocurrency users. In order for you to steer clear of the most frequent scams, as much as possible you have to be constantly vigilant and keenly aware of the activities orchestrated by these parties.

Always make sure that you are visiting official websites of these cryptocurrencies or using the official applications. You should also think of this as a golden rule: if an investment or a business does sound too good to be true, then it probably is.

When investing in cryptocurrency, you have to be aware that there are online schemes that can give you or any potential investor a regulated investment at the start.

But keep in mind, that in most cases, investment regulations should not be based on wild and may we say, unachievable claims. Potential investors not be taken in by individuals or groups chugging out crypto coin jargon.

If a certain prospect or investment does sound too good to be true, then it probably is. Take that advice applies well, whether it is a new coin offering, an online offer, a new service, or even a good old survey just to win a gift or a prize. You must need to take the time to really learn and understand the website or product you are signing up for.

If you are in doubt, use your gut instinct: Do not simply give it out. This means that you should not also definitely include your hard-earned money.

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