Cryptocurrency is an exciting and fast-growing field, but it also attracts scammers looking to take advantage of people. In 2024, these scams have become more sophisticated, making it crucial to stay informed and vigilant. This article will explore the top crypto scams of 2024 and provide tips on how to avoid them.

Key Takeaways

• Always research and verify the legitimacy of trading platforms before investing your money.
• Be cautious of emails or messages asking for personal information or offering free tokens.
• Never share your private keys or wallet passwords with anyone.
• Avoid investment opportunities that promise guaranteed high returns with little risk.
• Use trusted and secure crypto wallets and enable two-factor authentication.

Fraudulent Trading Platforms

Fraudulent trading platforms are one of the most common crypto scams, making up 87% of all reported scams. These scams involve fake websites or apps that trick people into depositing their money. The platforms look real, even showing fake price movements and gains to lure victims.

How to Avoid These Scams

1. Stick to Trusted Exchanges: Only use well-known and trusted exchanges to trade or store your crypto.
2. Check the URL: Make sure the website’s URL starts with HTTPS, not HTTP. Double-check the URL to ensure it’s the official site.
3. Verify App Information: If using an app, check the developer’s name and app details in the app store. Reliable apps will have more downloads and detailed information.
4. Be Wary of Pushy Strangers: If someone you don’t know is urging you to deposit funds into an unknown platform, be very cautious.

Always do your due diligence before investing. Fraud may not be obvious until you look closely.

By following these steps, you can protect your crypto assets from being stolen by scammers.

Phishing Scams

Phishing scams are a common threat in the cryptocurrency world. These scams often target users of crypto software wallets. Scammers aim to steal a crypto wallet’s private keys, which are essential for accessing cryptocurrency. Phishing scams are the most common attacks on consumers. According to the FBI, more than 300,000 people fell victim to phishing scams in 2022, and 298,000 in 2023. Collectively, these victims lost $52.1 million in 2022 and over $18.7 million in 2023.

Scammers typically send emails with links that lead to fake websites. These sites ask users to enter their private keys. Once the scammers have this information, they steal the victim’s cryptocurrency.

To avoid phishing scams, follow these steps:

• Always double-check URLs.
• Never share your private keys or passwords with anyone.
• Avoid clicking links or downloading files from untrusted sources.
• Don’t share information about your crypto activities on social media.

A holder of meme coin MOG lost over $148,000 from a phishing scam on July 28. The attacker drained 82 ETH from the victim’s wallet.

By staying vigilant and following these tips, you can protect yourself from phishing scams.

Romance Scams

Crypto romance scams are a dangerous mix of emotional manipulation and financial fraud. These scams target people looking for love online.

Scammers create fake profiles on dating apps, social media, or chat rooms, pretending to be interested in a romantic relationship. Over time, they build trust and emotional closeness with their targets. Once trust is established, these impostors introduce the idea of a profitable cryptocurrency investment or a financial emergency that needs crypto assets, persuading their victims to transfer funds or share sensitive wallet information.

Ways to protect yourself from romance scams:

• Verify Identities: Confirm the identity of online romantic interests through video calls, especially if things escalate quickly.
• Keep Finances Private: Avoid sharing any financial or cryptocurrency details with someone you’ve met online.
• Independent Research: Always independently check the legitimacy of investment opportunities suggested by a romantic interest.
• Seek Second Opinions: Discuss online romantic relationships with friends or family before making financial decisions.
• Report Scams: Report any suspicious or scam-related activities to relevant platforms and law enforcement.

The FTC warns consumers about the rise in crypto romance scams, urging them to cut off contact with suspicious online love interests and report these scams.

Fake ICOs

Fake ICOs entice investors with the prospect of profitable returns on a purportedly groundbreaking new cryptocurrency venture. Even so, the project frequently proves to be non-existent, leading to the vanishing of the funds raised.

Red Flags to Spot Fake ICOs

• Generic White Papers: Often lacking in detail or originality, with plagiarized sections.
• Team Anonymity: No credible information on project members.
• Guaranteed Returns: Promises of surefire profits in a highly volatile market.
• Overambitious Goals: Unrealistic project promises.
• No Working Prototype: Absence of tangible development or open-source code.
• Pressure Sales Tactics: Urging quick investment decisions.
• Unconventional Funding Methods: Soliciting investments through non-standard channels.
• Regulatory Non-compliance: Missing compliance details or security protocols.

As artificial intelligence (AI) becomes progressively prevalent, perpetrators are discovering novel methods to exploit the cryptocurrency market. Utilizing AI chatbots, attackers can interact with users, endorsing fraudulent tokens and offering guidance. These chatbots are programmed to inform investors about smooth lucrative investment prospects, which frequently evolve into pump-and-dump schemes aimed at artificially inflating token values before implementing a sell-off.

Each of these red flags deserves careful consideration. The more that are present, the higher the likelihood of the ICO being fraudulent.

Ponzi and Pyramid Schemes

Ponzi schemes, named after Charles Ponzi’s 1920s scam, involve paying returns to earlier investors with funds from new investors, not actual profits. Unlike legitimate business earnings, these schemes falsely imply returns come from product sales or successful investments. Pyramid schemes, similarly, rely on recruiting members for payment, leading to unsustainable operations as recruitment becomes difficult.

Cryptocurrency has given these traditional scams a new veneer of sophistication. Ponzi schemes have emerged in the form of high-yield investment programs that promise exceptional returns on crypto investments. Pyramid schemes are often masked as mining pools or multi-level marketing (MLM) operations within the crypto space.

Both rely on the decentralized, unregulated nature of cryptocurrencies to attract a larger pool of victims and to operate with a degree of anonymity. This modern twist makes it harder for authorities to track and shut down these fraudulent operations.

Pump and Dump Schemes

Pump and dump schemes are a common type of fraud in the cryptocurrency world. In these schemes, scammers artificially increase a cryptocurrency’s price by spreading false hype and fake information. This convinces investors to buy the cryptocurrency, causing its price to rise. This phase is known as the “pump.”

Once the price is high, the scammers sell off their holdings, causing the price to crash. This is the “dump.” Investors who bought in during the pump phase are left with significant losses as the cryptocurrency’s value plummets.

To avoid falling victim to pump and dump schemes, consider these tips:

• Be cautious of sudden buzz on social media, especially if there’s no real news to back it up.
• Question any promises of guaranteed returns.
• Treat anonymous investment advice with skepticism, especially if it urges you to buy in large quantities.
• Watch for abrupt spikes in trading volume and price without clear reasons.
• Be wary of coordinated “buy signals” from multiple accounts or groups.
• Approach unsolicited investment advice with caution, especially if it pressures immediate action.

Always be on the lookout for pump-and-dump tactics in crypto. These schemes can lead to significant financial losses and are often hard to spot until it’s too late.

Malware and Ransomware Attacks

Malware, short for malicious software, includes various types of software designed to harm or exploit any programmable device, service, or network. In the world of cryptocurrency, malware often aims to access and steal funds from digital wallets or hijack computing power for mining operations.

Ransomware is a specific type of malware that encrypts a victim’s files or systems. The attacker then demands a ransom, usually in cryptocurrency, for the decryption key. The irreversible nature of cryptocurrency transactions makes it an attractive option for attackers, as it leaves no traceable financial footprint.

How Malware Operates

Some malware runs quietly in the background of a user’s device, searching for wallet addresses that may be copied to the clipboard. It then alters them to the hacker’s wallet address when a transaction is made.

How to Protect Yourself

1. Use reputable antivirus software to detect and remove malware.
2. Regularly update your software and devices to patch vulnerabilities.
3. Be cautious of phishing emails and suspicious links.
4. Use hardware wallets for storing large amounts of cryptocurrency.

Choosing a wallet type that minimizes the risks associated with malware is crucial. Read our guide to get started: The Best Crypto Wallets in 2024.

The Decline in Ransom Payments

Recent studies suggest that ransom attacks have become less profitable as affected users have simply stopped paying the ransom demands.

Fake Mobile Apps and Wallets

The rise of smartphones has made mobile apps a part of our daily lives, including for managing cryptocurrency. However, this convenience has also opened the door for fraudsters to create fake mobile apps and wallets that look like real ones.

These fake apps are often found on unofficial app stores and can trick users into giving away their private keys and sensitive information. This allows scammers to steal their digital assets.

Key Precautions

• App Authenticity: Always check if an app is real by looking at the developer’s information and reading user reviews. Watch out for any signs that something might be wrong.
• Avoid Non-Official Stores: Only download apps from official app stores. These stores have better security and check apps more carefully than third-party stores, which might have fake apps.
• Direct Updates: For extra safety, get updates directly from the developer’s official website or through the app’s verified update system in the official stores.

Be cautious of apps that ask for your private keys or other sensitive information. If an app seems too good to be true, it probably is.

Impersonation and Fake Giveaways

In the cryptocurrency world, the vulnerability often lies not in the technology itself but in the human element. Scammers exploit this by impersonating celebrities, influencers, or tech figures on social media, promising unreal returns or running bogus giveaways that ask users to send crypto with the promise of receiving more in return. The infamous “Send 1 ETH, get 2 ETH back” scam exemplifies this approach.

The advent of deepfakes, using AI to create eerily convincing videos or audios of trusted figures, has further sophisticated these scams. These deepfakes can mislead users into believing they’re receiving legitimate investment advice or instructions from authoritative sources.

Strategies for Protection:

• Always verify the identity of the person or entity before sending any cryptocurrency.
• Be skeptical of any offer that seems too good to be true.
• Avoid sending cryptocurrency to unknown or unverified sources.
• Report suspicious activities to the relevant authorities.

Scammers will take as much time as necessary to gain the trust of a potential victim. Then, they may eventually ask the individual to reveal private keys or send money to their digital wallet. When one of these “trusted” entities demands cryptocurrency for any reason, it is a sign that something’s amiss.

Fake Customer Support

Fake customer support scams are particularly sneaky. Scammers often impersonate employees of cryptocurrency exchanges to trick people. They set up fake helplines and customer support numbers, which can be found online or through search engines. When users call these numbers, the scammers pretend to be help agents and ask for sensitive information like private keys or wallet passwords.

Strategies for Protection

• Use Official Channels: Only contact support through verified methods listed on the official website or app.
• Caution with Online Searches: Be wary of support numbers found via search engines, as scammers can manipulate search results.
• Protect Your Information: Do not disclose private keys, passwords, or sensitive details over the phone to unverified individuals.
• Verify Legitimacy: Confirm the support service’s authenticity through official company emails or verified social media interactions.

During times of trouble with your crypto wallet or transactions, always double-check the support contact details to avoid falling into these traps.

Conclusion

In 2024, crypto scams continue to be a significant threat, but with the right knowledge and precautions, you can protect yourself. Always do your research before investing, be skeptical of offers that seem too good to be true, and never share your private keys or personal information. By staying informed and vigilant, you can enjoy the benefits of cryptocurrency while minimizing the risks. Remember, the best defense against scams is awareness and caution.

Frequently Asked Questions

What are fraudulent trading platforms?

Fraudulent trading platforms are fake websites or apps that look like real cryptocurrency exchanges. They trick people into depositing their money, and then they steal it.

How do phishing scams work in crypto?

Phishing scams trick people into giving away their private information, like passwords or private keys. Scammers use fake emails or websites that look real to steal this info.

What are romance scams in the crypto world?

In romance scams, scammers pretend to be interested in a romantic relationship to gain trust. They then convince the victim to send them money or crypto.

What is a fake ICO?

A fake ICO (Initial Coin Offering) is when scammers create a fake cryptocurrency project to get people to invest. Once they have the money, they disappear.

How do Ponzi and pyramid schemes work in crypto?

Ponzi and pyramid schemes promise high returns with little risk. They use new investors’ money to pay earlier investors, creating the illusion of a profitable business.

What is a pump-and-dump scheme?

In a pump-and-dump scheme, scammers inflate the price of a cryptocurrency by spreading false information. Once the price is high, they sell their shares, causing the price to crash.

How do malware and ransomware attacks target crypto users?

Malware and ransomware attacks involve malicious software that can steal information or lock users out of their accounts until they pay a ransom, often in cryptocurrency.

What are fake mobile apps and wallets?

Fake mobile apps and wallets are designed to look like legitimate ones. When users download them and enter their private information, scammers steal their crypto.