Mind the gap! How to avoid falling into cryptocurrency scams

As cryptocurrencies have sky-rocketed in popularity in recent years, more and more people turn their attention to this sector. Just as it attracts bona fide investors and enthusiasts, it also encourages different scammers that look for ways to take advantage of the situation.

It goes without saying that whenever money is involved in an activity, it is always best to be extra careful. It is also clear that with the spread of the internet, scammers have many more options and much bigger leeway to do harm. In case of cryptocurrencies, we have to consider the fact that the field is relatively new and somewhat technical. There are nuances that not many people fully understand, especially without proper previous research. This means that criminals use a mix of very old, not so old, relatively new and freshly created schemes to try and get their dirty hands on other people’s belongings.

But fear not, because there are several things that you can do to ensure the safety of your assets and transactions online. For your convenience, we have put together a list of common and uncommon cryptocurrency scams. In each case we enlist the characteristics that should raise some red flags and give you pointers on how to avoid falling in their traps.

Mind transferring any cryptocurrency

The first rule to bear in mind is that you should avoid transferring even the smallest amount of cryptocurrency to any unknown person. Scammers use a great variety of schemes to get their hands on your money. If you receive an email offering you a job, announcing that you have won a lottery or requesting assistance to transfer funds quickly, promising it will be worth your while, be suspicious.

If your supposed employer sends you an amount of money greater than what was agreed and asks to refund him the difference, it’s most probably a scam. Be wary of any job offers requiring you to purchase cryptocurrency after receiving the necessary funds via bank transfer. Once you have sent them the digital coins, it will most probably turn out that the bank transfer came from a stolen account, and will be therefore reversed.

If you are asked to make a prepayment to have access to your lottery winnings, it’s more of the same. If rich and prominent people “need your help”, asking for small payments to facilitate some transfers of funds and promising to compensate you for your services, then say “no” or just don’t answer! It is most probably one of the most wide-spread scams of all, known as the “Nigerian prince scams”.

The goodwill of benevolent online users is also taken advantage of. Scammers make up imaginary natural disasters, asking for contributions to their relief funds. Online dating can end up with your date asking for money, because they allegedly have some serious problems in their life, or with them extorting you because they’re in possession of some revealing photos of you.

Mind some cryptocurrencies in particular

When you start looking for a cryptocurrency to invest in, there are several pointers that you should keep in mind, to make sure that it’s worth your while.

Firstly, whereas there are digital currencies based on different technologies, it is recommendable to go for those that are based on blockchain, because then you can be sure that all the transaction data can be tracked. It is recommendable to use a blockchain explorer to track the transactions of that cryptocurrency. Besides, blockchain explorers offer many additional benefits, allowing you to keep yourself properly informed about the crypto world.

While it is true that when investing, diversification is the best strategy, then if you’re a beginner, for starters it might just be best to stick with the best-known digital tokens.

If a new digital token is launched, it is usually done by initial coin offering or ICO. It is tempting to be one of the first to get hold of a potentially next success story similar to Bitcoin, but you should be more than careful. Up to 2018, over 80 per cent of crypto ICOs were fraudulent, and even if they are not straightforward scams, probability of a failure is much higher compared to success.

If you do decide to go for some new cryptocurrency, taking part in an ICO, make sure your previous research is more than thorough. Try to find out everything about the offering: who is behind the project, what does their white paper say, what is the purpose, tech and specifics behind the token. If their white paper is a copy-paste version of previous ICOs – you can google that quite quickly – or if it contains spelling mistakes or empty pages, then you can be quite sure that it’s a scam.

Another thing you should be especially wary about are cryptocurrencies with a small market cap and low trading volume that suddenly surge and are off the charts. It is most likely a scam called a “pump and dump” scheme, where fraudulent groups of buyers acquire a copious amount of a certain token to make it look successful. Shortly thereafter, they take advantage of the price rise and drop all their tokens, leaving the new investors with a worthless heap of digital currency.

Mind fake websites and apps

There is a substantial number of websites and apps that are built to resemble original cryptocurrency platforms, to lure users into making a mistake. If you enter them by accident, you might be the target of some misleading information or promises of mind-blowing returns in a certain crypto exchange. What’s worse, you might unwittingly end up giving out your personal data.

To avoid visiting any scam websites, always type in the desired URL yourself, instead of opening any links sent to you. It is very common to receive so-called phishing emails that contain URLs or images with a shady external link. So, it is better to avoid clicking on anything. Nevertheless, if you do decide to use a link, any link, then hover over it with your mouse pointer first, to check its validity. Only click on it if you’re sure that it will take you to a legitimate website.

Once on the webpage, always double check the URL, in case you mistyped or misread it or were redirected when opening the link. Also, make sure the website is secure, by looking at the address bar – there address has to either begin with “https” or have a lock pad sign on the right.

Look for spelling or grammar mistakes, observe the general design of the page and see if they have “Contact us” and “About us” sections, proving that there are real people behind the platform. If you feel that there might be something strange about the website, give the operator a call. It is also a good idea to visit Whois.net to check who owns the domain.

Apps are supposed to be secure because app store operators have strict controls in place. However, due to the high volume, they cannot cover all the bases. So, it can sometimes happen that thousands of people have already downloaded a fake app before it is discovered to be a scam and removed from the app store.

If you have a particular app in mind, it’s best if you visit the company’s or creator’s official website to download it. Look for user’s reviews, bearing in mind that scammers can purchase positive reviews or use bots to create a positive image. If it looks too good to be true, it probably is, so be extra cautious.

If you install the app, make sure it only has the permissions it absolutely needs (e.g. doesn’t access your contacts, unless it really needs to). Examine its design and interface carefully, looking for spelling mistakes or colours that feel off, compared to the original brand of the company.

Mind some exchanges and wallets

There are many exchanges and wallets out there that you should keep away from. They might be straightforward scams that steal your personal keys, sensitive data or all your cryptocurrency, or they could be platforms coaxing users with exceptional offers, only to find out later that the fees they charge for withdrawing funds are insanely high.

Before you start investing, make sure you do your homework. Learn all you can about the exchange you are about to use, because there are hundreds of different platforms out there to choose from. Talk with other, more experienced investors and read reviews – trusted reviews only!

Stick with well-known, reputable exchanges, such as one of the platforms in the following list:

Now, once you’ve bought some cryptocurrency, you need to store it somewhere. This means that you have to use the same kind of scrutiny for any digital wallet that you are considering for that purpose.

Each wallet has its pluses and minuses, as well as technical requirements and security features. So, as always, do your homework by checking the details and reading user reviews. It is also preferable to use a so-called “cold” wallet, that is, a wallet that is not connected to the internet (contrary to a “hot” wallet), which is why we would recommend you choose one of the wallets enlisted here: https://www.finder.com/best-cryptocurrency-hardware-wallets

Mind social media

Just as you should be careful with fake news, you should keep in mind that there are fake accounts on social media. You could be following an impostor Twitter account, for example, and fall in a trap of an “once-in-a-lifetime cryptocurrency opportunity”. You could think that it is a legitimate offer, because there is numerous positive feedback from other Twitter users, but it might just be a network of bots creating a false image.

There have been cases where scammers impersonate a well-known person and announce that they are giving away free digital tokens if you send them a small amount first. As it is a prominent person, many victims are coaxed into giving up their cryptocurrency, in the fear of missing out otherwise. The best option, in case anybody is giving anything away for free, is to assume that it’s a scam.

The same goes for any social media platform. If somebody contacts you directly offering you a good deal, even for a very small amount of your cryptocurrency, you should refrain from it. It’s always safer not to send any cryptocurrency to anyone you met on social media. Instead, only use official channels and crypto exchanges.

Mind impersonations, blackmailing, and pyramid schemes

You might also be contacted by email, or even the old-fashioned telephone call. Besides the so-called “Nigerian prince” scams mentioned above, scammers might impersonate public officers, employees of reputable companies or hackers, claiming they have some kind of incriminating or embarrassing data on you.

The best option in those kinds of situations, above all, is to stay calm. You should take your time to search online whether there have been other people that have been approached using similar claims.

Don’t let yourself be fooled by any crypto project offering profits for recruiting new investors. That means that it is a Ponzi or pyramid scheme and sooner or later it will collapse, meaning that you lose all your money and make a bunch of new enemies in the form of disappointed users that you convinced to join.

Mind crypto-related malware

As already stated above, it is not recommendable to click on any links sent to you, as they might take you to fraudulent platforms. Just the same, it could trigger a download of malicious software to your computer. This kind of malware can access your digital wallet, monitor your clipboard to get necessary data, redirect you to fake websites or infect your PC with an unwanted cryptocurrency miner.

Besides not clicking on any URLs, don’t download any unknown programs and keep your antivirus updated.

If you spot a scam or become a victim

Make sure you let everybody know if you have spotted a scam online, on an app store, etc., or if you become a victim. Don’t feel ashamed; instead remove any stigmas and report. Working together we can prevent other people from falling victims and make the cryptocurrency field safer overall.

In Europe and the United States, for example, you can report to OLAF and Federal Trade Commission respectively. Furthermore, share your experience on social media, because you can find other people that have undergone the same fate and that way you can also spread the word a lot faster. You can also contact the econsumer.gov platform that represents different consumer protection agencies from all the continents.

Unfortunately, it is very difficult to get back any cryptocurrency you’ve sent to a stranger, especially if it’s overseas, so the best you can do is make sure others do not fall to the same scam.


Investments are always risky and cryptocurrency is no exception. There are many scammers out there trying to entice users with unbelievable offers and promises of high yields. But if you use your common sense and take informed decisions, you can keep out of harm’s way.

What you should do to stay safe, in a nutshell:

  • Always do your homework;
  • Always double-check addresses;
  • Never use your usernames or private keys with anyone;
  • Use two-factor authentication;
  • Never click on suspicious links;
  • Use only reputable, legitimate service providers;

And generally, and finally, if something looks too good to be true, it most likely is!