Cryptocurrency investments are currently one of the most talked-about topics in the world of financial investing. Bitcoin, Ethereum, and Dogecoin are among the digital currencies that investors have purchased on cryptocurrencies exchanges with the hopes of reselling them for a profit in the future.

Cryptocurrency, sometimes known as “crypto,” is a legal but risky investment alternative that is growing in popularity. It is a highly speculative investment, which means you might make or lose a significant amount of money very fast. However, there is a bigger danger associated with it: bitcoin fraud.

A multitude of ways, including hijacking your cryptocurrency accounts and inventing completely fictitious currencies, are used by hackers to gain your money. In addition, as bitcoin grows more popular, the number of crypto scams increases.

Before delving into the many forms of cryptocurrency scams, it’s vital to first grasp the fundamentals of what cryptocurrency is. Let’s get this party started.

What Is Cryptocurrency?

Cryptocurrency is nothing more than a collection of values. In the same way that traders and investors make investments when they believe a company will expand and share prices will rise, cryptocurrency investors are betting on the future value of their investment when they purchase a cryptocurrency.

When it comes to stock valuation, it is effectively an estimate of a company’s future cash flows deflated. Because there is no fundamental company, there is no comparable information for economics in the case of cryptocurrencies; the value of a cryptocurrency is completely decided by the demand of individuals who invest in it.

It is one of two elements that the value of a cryptocurrency: the likelihood that other investors would purchase the asset or the operation of the blockchain that underpins the coin.

How Cryptocurrency Works?

Bitcoin and other cryptocurrencies are built on blockchain technology, but what precisely is a blockchain? For this reason, the phrase’s meaning and significance have become somewhat muddled as a result of its widespread use. A blockchain is simply a computer-generated document that contains information or records about something.

This logbook (or database) is shared by a group of computer systems connected to a network. There isn’t a single system in charge of the logbook, in reality. Instead, a blockchain is kept operational, and its transactions are certified by a decentralized network of computers, rather than by a central authority.

Blockchain technology developers assert that it has the potential to increase the openness, trust, and security of information transmitted across networks. Blockchain is criticized for being time-consuming, inefficient, expensive, and utilizing enormous amounts of energy, according to its critics.

Types Of Cryptocurrency Scams

Due to the present mindset, a large number of popular cryptocurrency scams have emerged, some of which may invade your life in the form of fake investment schemes, employment offers, or mobile applications, among other forms of communication. Interested in learning more about them right now?

The following are the seven (7) most common cryptocurrency scams, in which a scammer would encourage you to participate in payment activities associated with a cryptocurrency and then disappear as soon as the money is successfully received in his or her account.

1. Fake Apps, Websites, And Social Media Scams

Scammers are fully aware that social media, apps, and websites are an unavoidable part of their daily lives and that they must adapt to their environment. The social media company Oberlo claims that there are already more than 3 million social media users around the world.

More than 250 million mobile applications (Decibels) were downloaded and approximately 1.88 billion online pages were visited between 1991 and 2021 by consumers (Statista). All of this provides an opening for scammers to perform the following:

  • Create fictitious profiles on social media platforms such as Facebook, Instagram, and Twitter to steal information.
  • When they have your information, they will use it to run several advertisements and offers with the sole goal of convincing you to send them money in the form of cryptocurrencies.
  • Those who are dissatisfied with the product or service will offer you monetary aid in the form of rebates and refunds through bogus shopping websites that are focused on your preferences and interests.

Besides the foregoing, they will not hesitate to enter into a romantic relationship with you to catch your attention with their sense of humor, attractiveness, friendliness, and intellect. If you want to prevent falling victim to unlawful online dating and romance scams, social media, or phony websites/apps, instead of accepting their online inquiries, say no to those crooks.

2. SIM Swapping Scams

SIM swapping scams in the crypto marketplace enable scammers to explore new ways of gaining access to your cryptocurrency wallet or account by switching your SIM card. The following were the initial actions taken by these hackers:

  • You can access all of your personal information, including your email address, home address, and phone number, through social media sites such as Facebook and Instagram.
  • They discover the wireless service provider linked with your phone number, call him or her, and pretend to be you to obtain information.
  • Your number will be transferred to another SIM card as a result of their actions ( SIM belongs to those scammers).

As opposed to making fictitious attempts to contact you, they enter freely into your crypto wallet or account and completely drain the wallet in a fraction of a second after the process is accomplished.

3. Fake Crypto-Based Job Offer

Accepted a cryptocurrency-based work offer throughout a conversation, but did not thoroughly investigate the organization or the source of information available on the internet before accepting it? If this is the case, the likelihood of being fooled by such cryptocurrency-based employment offers would increase, which will initially result in the following outcomes:

  • Provide you with a position as a product designer, miner, crypto-investor, or recruiter based on your skills and qualifications.
  • Now, those con artists will demand further monies from you for you to apply for and be selected for the work position.

Because as soon as it reaches a reimbursement to their crypto wallet or any other medium that receives those highly unstable crypto coins, they will begin extorting you, claiming that all of your personal information (such as your name, photos, and account information) under their control will be compromised on social media handles, and you will be forced to pay them money.

To avoid pouring your heart and soul into all of those employment offers, instead, undertake extensive research on the team members who are providing you with those opportunities and exercise extreme caution before making a financial commitment.

4. Giveaway Scams

In addition to the giveaway scam, there are several other variations. Falsely claiming to be celebrities or well-known Bitcoin investors, fraudsters approach unsuspecting small investors and assist them.

Supposedly, if you send them in your Bitcoin, they will match it with some of their own, assisting you in quadrupling your initial investment.

In reality, whatever monies you supply them are deposited directly into the scammers’ bank accounts. According to the Federal Trade Commission, scammers posing as Elon Musk duped investors out of more than $2 million in cryptocurrencies in less than six months, according to the agency.

5. Disruptive Crypto-Investment Proposals

Ponzi schemes, pyramid schemes, and other schemes of similar nature are examples of this type of fraudulent activity. And the con artists behind such fraudulent schemes are skilled at convincing you to invest in unsolicited business ideas just by doing one of the following:

  • Celebrity testimonials or endorsements that are not real, safe, or truthful are mentioned on the websites of the celebrities involved.
  • They would then attract you with long-term benefits like increased profits, but only after you had made a Bitcoin payment to their fictitious accounts.

It is, therefore, necessary to report such frauds to law enforcement agencies or federal authorities rather than falling into their trap and wasting your hard-earned money.

In addition, if necessary, send follow-up emails or engage in live chats. In addition, it will assist many others in avoiding such unwelcome traps that promise you more returns on your money if you participate in their promotions.

6. DeFi Cryptocurrency Rug Pull

When investors are lured in by a Defi scheme, they become the victims of fraud. Built by dishonest developers, this organization offers a promising future to those who spend their money.

  • This project’s owner (who may also be referred to as a rug puller) and the developers will proceed after the investors have accumulated sufficient monies.
  • Cash-out the funds, close the business, and exit the country.

Decentralized Finance (DeFi) is becoming increasingly exposed to threats like cash theft, personal information theft, and other data breaches as a result.

There have been multiple incidents of rug pulls that have occurred recently, and the vast majority of them have taken $2 million or more from investors who have put their money into their venture.

7. Initial Coin Offering Scams

Though ICOs, or Initial Coin Offerings, can be used for philanthropic fundraising and company finance, they are also vulnerable to fraud and scams on a large scale. These frauds are obvious to a wide range of investors, cryptocurrency ventures, and ordinary individuals in the following ways:

  • Pump-and-dump schemes are one type of scheme.
  • Investing in the Stock Market (Securities Fraud).
  • Fraud at the Exit.

Scammers will make outlandish charges in all of those ways, such as attempting to talk about their connections with public figures, and they will be successful. Then, once you begin to engage in their cryptocurrency platforms, such as Bitcoin and Ethereum, they would lead you to believe that the enterprise they are running delivers superior returns to its clients.

And then those crooks will vanish with all of the investors’ funds, leaving them completely defenseless.


Fraudsters may adopt existing schemes, such as tax or utility fraud, to make them crypto-centric, such as by incorporating cryptocurrency into the plan. Alternatively, they may come up with entirely new approaches that are impossible to predict.

Maintaining vigilance is the most effective method of protecting oneself from these growing frauds. To begin, learn everything you can about the many types of frauds that are now in existence. This will make it easier for you to recognize them when they occur in other forms.