May 18

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Common Crypto Scams You Should Know About

Cryptospace

One of the great things about the crypto space is that it offers incredible freedom, but this means that the industry is still the wild west in many ways. 

Of course, this is how many of us would prefer things, but freedom does not come without responsibility. Scammers are always at the forefront of cutting-edge technology and they are usually far more sophisticated than the average user, so you should be cautious with all of your interactions on the blockchain. 

Luckily, if you know what to look for, these scams are easy to avoid. Below are some of the most common scams in crypto and how to avoid them.

Phishing

Phishing scams are everywhere, and you can risk losing your whole wallet if you fall into one of these traps. 

Essentially, this is where a scammer will convince you to give them your passwords, seed phrases, or other private information. 

This trick can take many different forms, but scammers will usually set up websites, or email addresses that look identical to trusted wallets or exchanges. 

In some cases, they will ask for your seed phrase, and these are the easiest to spot because no wallet or exchange will ever ask you for your seed phrase. This is an easy rule to remember. 

However, other phishing scams can be more deceiving. For example, phishing websites are sometimes established at domains that are slight misspellings of popular exchanges, such as an error in the website address cryTPospace dot com (for example). 

The user will see an interface that is identical to the one they are familiar with, but as soon as they enter in their username and password on the fake site, the scammer will be given access to their account. 

Always make sure that you are entering private information into an official app or website.

Free Crypto Scam

In crypto, there are many opportunities to get “free money” in the form of airdrops, but there are also scammers out there making false promises of increased returns. 

These are usually easy to recognize, but thieves have become extremely clever. 

Sometimes they will impersonate popular influencers and offer investment opportunities. Crypto telegram groups are crawling with these scammers, as are the comment sections of Twitter and YouTube pages for popular influencers. 

These scams have now started to appear in the YouTube ads that are shown in the middle of the videos you watch, which make them appear to be credible. Sometimes they even feature footage of the same interview you are watching or clips of content from the same creator. 

If a famous person is offering you free crypto or an investment proposal, it is most likely a scam unless you are dealing with an official contest or airdrop, and even then you should double and triple check to make sure it is legitimate. 

If an airdrop is requesting that you deposit money in an unfamiliar wallet, you should also take extreme caution. 

Rug Pull

Sometimes scams can simply come in the form of sketchy investments where the creator has no intention of following through with the promises of their road map. 

These can be hard to spot out because there is so much tribalism in the industry, with everyone claiming that their project is the best, and everything else is a scam. A lot of great projects have been labeled as scams despite their teams offering up great technology and completing their road maps, but it is true that many tokens are launched with no other utility than to get their founders rich. 

In order to evaluate crypto assets to decide their value and legitimacy, you are going to need to learn how to do some basic fundamental analysis. Luckily, we have another article that can get you started with that. Start from the resources center and scroll to the bottom of the page to find full reviews of Bitcoin, Bitcoin Cash, Ethereum, and more. 

Sim Swap

If a thief has access to your phone number, and some basic personal information about you, they can attempt to take over your phone by contacting your service provider and setting up a new phone under your name, which will allow them to gain access to your crypto exchange accounts, if you are using SMS as a confirmation method. This is why we recommend using 2 Factor Authentication instead.

Best Practices

2 Factor Authentication

The best way to protect yourself from these types of attacks is to always use 2 Factor Authentication (2FA). This is an added layer of security that requires you to get an additional, time-sensitive passcode from another application, like Google Authenticator or Authy, in order to access your accounts. 

Informational security

Be careful about the personal information you share online. Even something as simple as an address, phone number, and birthday could give a thief enough information to convince a customer service representative that they are talking to you. 

It is also important not to brag too much about your holdings, especially on social media where anyone can see. Wealthy crypto holders have been targeted for robberies and even kidnappings because the wrong people found out about how much crypto they were holding. 

Password Storage

You should also be careful about storing your seed phrases or passwords on a computer because if a hacker gains access to your device, they could take your whole portfolio. 

This is why crypto experts always recommended that you write your seed phrase down on paper (or stamped into a metal plate) and keep it somewhere extremely safe.

Double Check URLs and addresses 

Always make sure you are visiting the correct URL, and if you are unsure, check with coingecko or coinmarketcap for official links. You can also bookmark the URL so you can be sure you are returning to the correct website in the future. Also, be careful to double-check wallet addresses when you are sending funds.


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