Common Crypto Scams and How to Avoid Them
Investing in cryptocurrencies can feel exciting and new, but the world of digital money also attracts scammers. Fraudsters have become increasingly creative, utilizing advanced tools such as AI and social engineering to deceive investors. Learning about the most common crypto scams can help you spot danger signs and protect your assets. This article explains key scams in simple English with real examples and easy infographics to guide you.
Phishing Scams
Phishing scams use fake websites, emails, or messages that appear to come from a legitimate crypto exchange or wallet service. Scammers send you a link asking you to log in or enter your private key. Once you do, they steal your crypto and disappear.
Example: You get an email that looks like it’s from “CryptoSafe Exchange.” The email says there’s a security alert and a link to “confirm your password.” You click the link and enter your details on a site that looks real, but it’s a copy.
Phishing Flowchart
Code
[Email] –> [Fake Link Clicked] –> [Fake Login Page] –> [Scammer Gets Info] –> [Funds Stolen]
Warning Signs:
- Unexpected email urging immediate action
- Misspellings or odd URLs
- Links that don’t match the official website domain
Ponzi and Pyramid Schemes
Ponzi and pyramid schemes promise high returns with little to no risk. They pay old investors using money from new investors instead of real profits. These scams collapse when there aren’t enough newcomers, leaving later investors with big losses.
Example of a Ponzi Scheme
A project advertises a 20% monthly return if you join and recruit three friends. Early joiners get paid, so it looks real. But when recruitment slows, the scheme falls apart, and most people lose their money.
Money Flow in Ponzi
| Stage | Description |
| Investment Promised | High returns, no clear business model |
| New Investor Funds | Used to pay returns to older investors |
| Recruitment Required | Pressure to bring in more investors |
| Collapse | Not enough new funds, scheme fails |
Red Flags: unrealistic profits, push to recruit others, lack of transparency
Fake Initial Coin Offerings (ICOs)
Fake ICOs mimic real token sales. Scammers create a website and whitepaper, collect investments, then vanish. Without a live product or code on GitHub, these token launches are often worthless.
The “GreenEarth Token” ICO promises to plant a tree for every token sold. The website looks professional, but there’s no blockchain code or proof of partnerships. After collecting millions, the team disappears.
ICO Checklist
- Real GitHub repo?
- Clear roadmap and team profiles?
- Verified legal disclosures?
Tip: Always verify the project’s code, team, and legal status before investing
Social Engineering Scams
Social engineering scams rely on tricking you with emotion or authority. Two common forms are romance scams and impersonation/giveaway scams.
Romance Scam Example: On a dating app, someone pretends to be interested in you, then asks for crypto help. They say they need to pay a fee to transfer inheritance or pay a visa fee. You send crypto and they vanish.
Impersonation and Giveaway Scam Example: A Twitter account copies a famous crypto influencer’s name and profile picture. They tweet, “Send 0.1 ETH and get 1 ETH back!” People send funds and receive nothing in return.
Common Social Engineering Tactics
- Fake emotional stories
- Celebrity or authority impersonation
- Too-good-to-be-true giveaways
Always verify identities via official channels and be cautious of any stranger asking for money
Cloud Mining Scams
Cloud mining promises you can rent mining hardware remotely and earn crypto without running equipment yourself. Scammers set up websites that look like mining farms but never actually mine anything. They collect monthly fees and then disappear.
A case in point is “CryptoFarm365” which offered 10 GH/s of Bitcoin mining power for a $50 monthly fee. You pay for six months up front. The site goes offline after three months, and you never see a payout.
Cloud Mining Warning Signs
- Promises of fixed daily or monthly returns
- No proof of physical mining equipment
- Long-term contracts with prepaid fees
Check for real mining farm footage, transparent electricity costs, and third-party audits before paying
SIM Swap Attacks
SIM swap attacks let scammers take control of your mobile phone number by tricking or bribing telecom staff. With your number, they reset exchange passwords and drain your funds.
The way it happens is that a scammer will call your phone provider pretending to be you. They say you lost your SIM and need a replacement. Once the new SIM is active, they receive your two-factor codes, log into your crypto accounts, and sweep your funds.
SIM Swap Prevention Tips
- Use an authenticator app instead of SMS
- Add a strong PIN or password to your mobile account
- Enable anti-SIM swap locks with your carrier
If you lose service unexpectedly, contact your carrier immediately and check your crypto accounts for unusual logins
AI-Generated Deepfake Scams
Deepfake scams use AI-generated video or audio to mimic trusted figures. Scammers create a short video that looks like a CEO or family member asking you to send crypto or share private keys.
For instance, you received a video call from “your cousin.” The audio and face match perfectly. They urgently ask you to transfer crypto to help with “legal fees.” After you send the funds, the deepfake caller vanishes.
Deepfake Red Flags
- Unusual requests for crypto transfers
- Video glitches or poor lip-sync at the edges
- Requests sent outside normal communication channels
Always verify details through a second channel, like calling a known number, before sending any funds
How to Protect Yourself
Protecting your crypto investments means combining good habits, tools, and common sense. Use this checklist to stay safe:
- Verify website URLs match the official domain
- Use hardware wallets or trusted software wallets
- Enable two-factor authentication (prefer authenticator apps over SMS)
- Research projects: check code repositories, team backgrounds, and legal filings
- Never share private keys or seed phrases
- Treat unsolicited offers or messages with extreme caution
Get our ebook and learn how to identify and avoid crypto scams
Practical Strategies to Identify Crypto Scams
ASCII Infographic: Security Layers
Code
| User Habits |
| – Double-check URLs |
| – Avoid public wi-fi |
+—————————–+
| Tools |
| – Authenticator apps |
| – Hardware wallet |
+—————————–+
| Verification |
| – Phone calls |
| – Official channels only |
+—————————–+
Malware Distributed Through Counterfeit Ads or Apps
Scammers create fake online ads or mobile apps that look just like real crypto exchanges or wallet tools. When you click the ad or install the app, hidden malware sneaks onto your device and steals passwords, private keys, and cookies linked to your crypto accounts.
Example of a Malware Counterfeit
A malicious campaign called JSCEAL used thousands of internet ads to promote “MetaMask Pro” and “Binance Mobile” apps. Victims thought they were downloading legit software, but the installer injected JavaScript malware that ran in the background. It captured login details and sent them straight to the attacker’s server, emptying users’ wallets without raising antivirus alarms.
Infographic: Malware Flowchart
Warning Signs:
Code
[Counterfeit Ad or App Store]
↓
[User Downloads Fake App]
↓
[Installer Launches JSCEAL]
↓
[Malware Steals Credentials & Keys]
↓
[Scammer Drains Crypto Funds]
- Ads claiming “official” status but leading to unusual URLs
- App stores hosting wallet apps that don’t appear on the exchange’s site
- “Too good to be true” promises like no fees or guaranteed profits
Crypto ATM and QR-Code Scams Impersonating Officials
Scammers pretend to be law enforcement or bank officers and guide victims to deposit cash into a crypto ATM or scan a QR code that directs them to the criminal’s wallet. Because the machine resembles a normal ATM and the request appears urgent, people often comply without suspecting a scam.
For instance, someone calls claiming to be from the FBI and says your bank account was hacked. They tell you to go to a “crypto ATM” at a nearby convenience store. When you arrive, they send you a QR code to scan. You feed hundreds of dollars into the machine, which instantly converts your cash into Bitcoin that goes straight to the scammer’s address. You later discover the call was fake and your money is gone for good.
Infographic: ATM QR-Code Scam Steps
Code
[Scammer Impersonates Official]
↓
[Victim Gets Urgent Call]
↓
[Victim Visits Crypto ATM]
↓
[Scammer Sends QR Code]
↓
[Victim Scans & Deposits Cash]
↓
[Funds Converted & Sent to Scammer]
Red Flags:
- Any request for payment via a crypto ATM
- Scammers insist you keep the transaction secret
- Warnings printed on the ATM were ignored under pressure
By staying alert to counterfeit ads, fake apps, and quasi-official ATM instructions, you can avoid these creative scams. Always double-check URLs, confirm app sources, and never use a crypto ATM at the behest of an unsolicited caller.
↓
[Installer Launches JSCEAL]
↓
[Malware Steals Credentials & Keys]
↓
[Scammer Drains Crypto Funds]
Warning Signs:
- Ads claiming “official” status but leading to unusual URLs
- App stores hosting wallet apps that don’t appear on the exchange’s site
- “Too good to be true” promises like no fees or guaranteed profits
Conclusion
Crypto investing offers exciting possibilities, but it also carries risks. Scammers now use phishing, Ponzi schemes, fake ICOs, social engineering, cloud mining ruses, SIM swaps, and deepfake videos to steal your funds. By learning their tactics, watching for warning signs, and following our protection checklist, you can safeguard your digital assets. Stay curious, stay cautious, and always double-check before you send any crypto.
By keeping these scams and tips in mind, you’re better equipped to navigate the crypto world safely and confidently in 2025 and beyond
