What is a Crypto Scam? Everything You Need to Know (2023)

By Tibor Moes / Updated: June 2023

What is a Crypto Scam? Everything You Need to Know (2023)<br />

What is a Crypto Scam?

Cryptocurrencies continue to gain popularity, giving rise to an unfortunate byproduct: crypto scams. With the stakes higher than ever and scammers becoming increasingly sophisticated, protecting your digital assets has never been more crucial.

This guide will arm you with the knowledge to recognize common crypto scam tactics, safeguard your investments, and take action if you fall victim to a scam.


  • Crypto scams deceive individuals into losing digital assets, often promising high returns or exploiting trust through fake investment opportunities or ICOs.

  • They can take many forms, such as Ponzi schemes, phishing, and fraudulent exchanges or wallets.

  • Avoiding crypto scams involves diligent research, verifying information, and using secure, reputable platforms for crypto transactions.

Don’t become a victim of cybercrime. Protect your devices with the best antivirus software and your privacy with the best VPN service.

Defining Crypto Scams

Crypto scams are financial scams that target digital assets, manipulating and deceiving victims to steal their hard-earned crypto investments. The lack of central authority and regulation in the blockchain technology that underpins cryptocurrencies makes it an attractive playground for scammers. With over $1 billion in losses reported from January 2021 to June 2022, it’s clear that crypto scams are increasingly prevalent.

The landscape of crypto scams is vast and diverse, ranging from phishing scams that target crypto wallets to fraudulent investment schemes that prey on hopeful investors. In essence, crypto scams work by exploiting vulnerabilities in human nature and technology to steal digital assets.

Types of Crypto Scams

Navigating the crypto world requires awareness of various types of scams, such as fake exchanges, phishing, investment scams, and giveaway scams. Scammers are skilled at crafting seemingly legitimate investment opportunities, only to disappear once they have access to your assets. Fake apps, often found on popular app stores, are another devious tool used to trick unsuspecting cryptocurrency investors.

Social media platforms are rife with giveaway scams that lure victims with promises of crypto rewards that never materialize. Additionally, scammers often impersonate celebrities or influencers, exploiting their status to build credibility and attract potential targets. From pump and dump schemes to romance scams, it’s crucial to remain vigilant and recognize the red flags of common crypto scams.

Why Crypto Scams Are Prevalent

Cryptocurrencies’ decentralized nature and lack of regulation make them prime targets for scammers. The absence of legal safeguards and government guarantees in crypto transactions further complicates matters, as there is no central body to monitor suspicious deals. Moreover, the anonymity provided by wallet addresses makes it challenging to trace or identify users involved in crypto scams.

The decentralized financial system at the core of cryptocurrencies offers numerous advantages, such as increased financial autonomy and reduced fees. However, this lack of oversight also creates opportunities for bad actors to exploit the system and prey on unsuspecting investors.

Recognizing Common Crypto Scam Tactics

To defend against crypto scams, it’s essential to recognize the tactics employed by scammers. Common warning signs include unexpected contact, recommendations from seemingly knowledgeable sources, and pressure to act quickly. Trusting your instincts and remaining skeptical when something seems too good to be true can help you avoid falling for scams.

Implementing protective measures, such as securing your wallet keys, investing only in familiar ventures, and conducting thorough research, can further mitigate the risk of becoming a victim. When seeking financial advice for crypto investments, it’s crucial to find trustworthy sources, such as local advisors or reputable online platforms.

Impersonation and Social Engineering

Scammers often use impersonation and social engineering techniques to gain victims’ trust and manipulate them into parting with their crypto assets. They may pose as government officials or representatives from reputable companies, convincing victims that their assets are frozen and that they can resolve the issue by paying in crypto.

Phishing scams are another common tactic, wherein scammers entice victims with seemingly lucrative opportunities or requests for help, only to steal their sensitive information or crypto assets.

To avoid falling prey to impersonation and social engineering, it’s vital to maintain skepticism when encountering crypto opportunities promoted on social media and to ignore unsolicited contact promoting investment opportunities.

Fraudulent Promises and Guarantees

Scammers often lure victims with fraudulent promises of high returns on investments or quick profits, preying on their desire for financial success. They may claim to have insider knowledge or even resort to phishing scams, attempting to manipulate victims into providing personal information or parting with their crypto assets.

Giveaway scams are another deceptive tactic, where scammers promise to match or multiply any crypto sent to them, only to disappear once they receive the funds. By staying vigilant and conducting thorough research, you can protect yourself from falling for these too-good-to-be-true offers and guarantees.

Exploiting Fear and Urgency

Scammers often exploit fear and urgency to pressure victims into making rash decisions that benefit the scammer. They may use false claims about an event or opportunity, threats, or intimidation to create panic or anxiety, convincing victims that they are in danger if they don’t act quickly.

To shield yourself from fear exploitation, it’s essential to be mindful of the tricks scammers employ and exercise caution when making decisions. Double-check any claims made by scammers before taking any action, and stay informed about the latest scams and trends in the crypto space.

How to Safeguard Your Digital Assets

Protecting yourself from crypto scams involves a combination of vigilance, research, and the implementation of secure practices. By understanding the tactics employed by scammers and taking proactive steps, you can minimize the risk of falling victim to their schemes.

Thoroughly vetting any potential crypto investment, staying informed about the latest news and trends in cryptocurrencies, and employing secure storage solutions are all vital aspects of safeguarding your digital assets.

Secure Storage Solutions

Investing in secure storage solutions, such as hardware wallets and reputable software wallets, can add an extra layer of protection to your crypto assets. Hardware wallets keep your crypto keys safe by storing them offline, while software wallets provide a digital storage option on your computer or an external hard drive.

Cold storage, which involves keeping your cryptocurrency assets offline, is another reliable method to ensure the safety of your investments. By combining these secure storage solutions, you can significantly reduce the risk of losing your digital assets to scammers.

Research and Verify

Before engaging in any crypto-related activities, it’s crucial to conduct thorough research and verify the legitimacy of companies, platforms, and individuals. Searching for reviews, complaints, and news articles about the entity in question can provide valuable insights and help you make informed decisions.

Verifying contact information is also essential to ensure you’re not communicating with scammers posing as legitimate representatives. If your cryptocurrency assets have been stolen or scammed, consider using crypto tracing services to locate your assets and identify target transactions.

Stay Informed and Educated

Staying updated on the latest crypto news and trends is vital to maintaining awareness of potential scams and threats. Reliable sources such as CoinDesk, Decrypt, and The Block provide valuable information on developments in the crypto world.

By staying informed and educated about cryptocurrencies, you can better identify red flags, such as promises of huge returns, accepting only cryptocurrency as payment, and poor communication quality. Additionally, being aware of potential scams like phishing, fake ICOs, and Ponzi schemes can help you navigate the crypto space more safely.

What to Do If You’ve Been Scammed

Falling victim to a crypto scam can be devastating, but it’s crucial to take immediate action to minimize further damage and protect yourself. Begin by ceasing all contact with the scammer and reporting the incident to the relevant authorities, such as the police and the CFTC.

If you’ve made a payment using a debit or credit card, bank transfer, or shared personal information, notify your bank or financial institution as soon as possible to report the scam and stop any fraudulent transactions.

Reporting Crypto Scams

When reporting a crypto scam, it’s essential to provide as much information as possible to the relevant authorities, including the type of scam, the amount lost, and any details about the perpetrator. Contacting federal regulatory agencies, your crypto exchange, or using USA.gov’s scam reporting tool can help you find the appropriate government agency or consumer organization to report the scam.

In cases of blackmail or extortion, report the incident immediately to the FBI and refrain from engaging with the scammer or providing any payment. The more information and reports collected on crypto scams, the better equipped law enforcement agencies will be to tackle this growing issue.

Damage Control and Recovery

After reporting a crypto scam, it’s essential to take steps to protect yourself from further harm. Changing passwords, enabling two-factor authentication, and monitoring your accounts for suspicious activity can help minimize potential damage.

To recover from a scam, gather information about the incident and the people behind it, and explore options for tracing your assets, such as using crypto tracing services. While the recovery process can be challenging, taking proactive steps to protect your finances and personal information can help you regain control and guard against future scams.


The rise of cryptocurrencies in 2023 has unfortunately also seen a surge in crypto scams. By understanding the various types of scams, recognizing common tactics, and implementing secure practices, you can protect your digital assets and avoid falling prey to scammers. Stay informed, research thoroughly, and act cautiously to navigate the crypto world safely and confidently.

How to stay safe online:

  • Practice Strong Password Hygiene: Use a unique and complex password for each account. A password manager can help generate and store them. In addition, enable two-factor authentication (2FA) whenever available.
  • Invest in Your Safety: Buying the best antivirus for Windows 11 is key for your online security. A high-quality antivirus like Norton, McAfee, or Bitdefender will safeguard your PC from various online threats, including malware, ransomware, and spyware.
  • Be Wary of Phishing Attempts: Be cautious when receiving suspicious communications that ask for personal information. Legitimate businesses will never ask for sensitive details via email or text. Before clicking on any links, ensure the sender's authenticity.
  • Stay Informed. We cover a wide range of cybersecurity topics on our blog. And there are several credible sources offering threat reports and recommendations, such as NIST, CISA, FBI, ENISA, Symantec, Verizon, Cisco, Crowdstrike, and many more.

Happy surfing!

Frequently Asked Questions

Below are the most frequently asked questions.

How do you spot a crypto scam?

Spotting a crypto scam can be difficult, but there are some tell-tale signs. Be wary of any offers promising quick and large profits with low risks, as well as those that require you to pay with cryptocurrency only.

Keep an eye out for communication with spelling errors, excessive marketing tactics, and any contractual obligations. Trust your gut, and if it sounds too good to be true, it probably is!

What is the big crypto scam?

The big crypto scam of the past decade was the FTX scam, which saw hundreds of millions of dollars stolen from unsuspecting users. Through deceptive practices such as manipulating trading volumes and prices, FTX deceived users into investing in their platform, resulting in large financial losses for those affected.

Is crypto scam a crime?

Yes, a crypto scam is a crime, and engaging in it can lead to criminal liability. Therefore, it is important to exercise caution when dealing with cryptocurrency transactions. Always research the person or group behind an investment before committing any funds.

Author: Tibor Moes

Author: Tibor Moes

Founder & Chief Editor at SoftwareLab

Tibor is a Dutch engineer and entrepreneur. He has tested security software since 2014.

Over the years, he has tested most of the best antivirus software for Windows, Mac, Android, and iOS, as well as many VPN providers.

He uses Norton to protect his devices, CyberGhost for his privacy, and Dashlane for his passwords.

This website is hosted on a Digital Ocean server via Cloudways and is built with DIVI on WordPress.

You can find him on LinkedIn or contact him here.

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