Either your password is stolen from you, impairing your control over your private key, or your data is co-opted by allowing a scammer to access your crypto exchange, and then your crypto wallet. The scammer uses voice deepfake technology to pretend to be the government, a law enforcement officer or even a celebrity or a branded CEO.
Beware of any investment that offers extraordinary profit guarantees. Beware equally of ‘recovery’ businesses offering to get your money back for you.
Scams based on hype
The messages – sent by email, over social media or messaging apps, or via pop-up alerts – claim there’s been fraud on your crypto app or that you’ve been hacked. They might even say that the authorities have frozen your wallet. Don’t respond to unsolicited messages, and don’t follow links or download attachments from someone that you don’t know. Protect your private keys, and hold them only within your friends and family who completely trust you. The most common cryptocurrency scam is the ‘pump-and-dump’ where the price of a token is hyped by feigned demand to attract investors, only to be subsequently offloaded at a profit once the price artificially increases. Watch out for sudden, unexplained price or trading volume surges in a coin, as well as tipsters on forums or other social media groups sharing information about a coin they have ‘inside knowledge’ of. Lastly, if you’re invited to invest in a new coin, be sure to examine its token distribution on an online blockchain explorer such as Etherscan.
Scams based on scare tactics
So if you’re a new investor and fall for a crypto investment scam predicated on fear, you might be led to believe you’ll make a great return, but you have to send your cryptocurrency asset to do so. The scammer receives your cryptocurrency, but it’s gone from your wallet – and they have had plenty of practice using it to further fund a new cryptocurrency scam. Nor are classic pump-and-dump crypto schemes unknown. In this sort of operation, many of those with the coin secretly boost its price – through announcements on social media, accounts posted with fake celebrity avatars, and others – keeping it up in a bid to lure others to buy it, only then to jump in and sell it to pocket the ensuing profits. The second type of crypto scam is an extortion or blackmail scam, where the scammer tells you that they have photos, videos or information on you that they will leak if you don’t pay them in crypto. You might receive an email or text message or even get a pop-up on your computer from the scammer. You might be asked to send crypto and send ’your private keys’.
Scams based on phishing
Phishing, for instance, is a trick by a fraudster who uses a false email or message pretending to be a legitimate crypto company, exchange or celebrity to access your crypto account or digital wallet. The fraudster might claim to have a unique deal and instruct you to provide passwords and other information or to follow a link to make a payment. The PlusToken scam would fall into this category of crypto fraud, where the scammer persuaded the victim into investing in a fraudulent platform – this one promising an unbelievable ROI when the victim put money into the site – that failed to produce a dime of real return and demanded more and more coin before the victim could withdraw their money. The best way to protect yourself from these types of scams is to know what you’re doing (ideally) and to keep your guard up. Research any cryptocurrency project that you consider investing in. Never provided a third party with your private keys. If someone on a platform is making an offer that’s never before been made, it may be a scam. Never transfer your cryptocurrency immediately when someone asks you to. Never transfer your crypto to someone. If it’s too good to be true, run the other way.
Scams based on social engineering
Social engineering scams have a lot of different appearances. They usually take the form of someone pretending to be someone they’re not, from a government agency or a crypto exchange, in tech support or in your doctor’s office, requesting some action or funds. I’m not asking you to send me money, I’m Mr. Government. Don’t send it to me. Never send money to some random person claiming to be any of those. And never put money into a deal unless it is on a vetted crypto exchange. Furthermore, in other scams, scammers threaten the victim with embarrassing or humiliating information about them – a sext they’d sent years ago, an old interview they gave to a low-profile gossip site, an old all-nude modelling session they did for a local porn site – and threaten to release it to the victim’s colleagues, acquaintances, family and friends unless they pay the scammer in cryptocurrency. This would be extortion, and you must report these criminals to your national law enforcement agencies immediately. Last but not least, stay away from any business that wants you to invest money (in cryptocurrency or not) up front in order for you to work for them. Honest businesses will never put a price up front before hiring you.