Cryptocurrency Scams

According to the fundamentals, Cryptocurrencies are decentralized virtual money outlined to be used online. Bitcoin, launched in 2008, is the first cryptocurrency that till now remains the biggest, most vital, and influential among the other cryptocurrencies in the market. The cryptocurrency market makes it possible to trade or transfer value online via crypt exchanges or platforms without the need for intermediaries like banks or other payment processors. It also acquires the advantage of dealing 24/7 on low fees or commissions around the globe.

However, if no bank or government authority is involved, how is cryptocurrency secure? It’s secure because all transactions are scrutinized by a system called blockchain technology. A crypto blockchain is equivalent to a bank’s balance sheet or ledger.

In accordance with any financial industry, precisely one that is highly volatile and has accumulated incredible public interest, due to this creates vulnerable opportunities for scammers to defraud investors of the market. There are different types of Cryptocurrency scams which have been rising predominantly. As a result, it has become a primary topic of discussion for government enforcement attorneys, with several prominent conference panels and agency press releases addressing its various forms, the hype versus the reality, and efforts to restrain its abuse.

Most common types of Cryptocurrency scams –

  • Initial Coin Offering scam – The newest offering of a particular cryptocurrency for vending is known as an Initial Coin Offer (ICO), also referred to as the means of preying on ingenious digital currencies. Mostly, scammers portray every ICOs as entirely fabricated, with counterfeit memoirs of non-existent members and copying technical whitepapers from other legitimate cryptocurrencies present.
  • Pump and Dump Scheme – Cryptocurrency provides the latest variation of the classic pump and dump scheme; in this scheme, the asset owners try to escalate the price movements by selling their holdings at exaggerated rates. In the cryptocurrency market, this scheme is commonly used at the ICO stage or beyond; albeit, be aware as scammers can take advantage of this scheme and embed false claims and boost the demand and acquire access to earn fraudulent yet hefty profits for novice investors.
  • Ponzi Scheme – Cryptocurrency investments can also be used in the traditional method known as the Ponzi scheme. In this scenario, the scheme promoters are responsible, and it is necessary for them to serve substantial returns to the early investors by acquiring new investments from the new investors of the scheme. Whereas impersonating investments in rising crypto markets can also serve as the supposed goal for Ponzi schemes. Therefore, people have misunderstood the crypto of which scammers take advantage and tamper with schemes for acquiring money for deceptive purposes.
  • Market Manipulation – Scammers try to manipulate the market price m movements where cryptocurrency or similar derivative products are being traded. Inappropriate market manipulation includes spoofing/phishing, tailgating, churning, tax avoidance, and many other schemes.

How to spot Cryptocurrency Scams?

  1. A counterfeit investment manager – If a person claims to be an investment manager for cryptocurrency or other derivative markets, assuring you that they will grow your money but only if you provide them with access to the particular account you are investing from, it can be a sign of a cryptocurrency scam.
  1. A person claiming to be a celebrity artist – Suppose that you are confronted by a well-known celebrity that claims to multiply your crypto assets by sending them; it might be suspicious. Majorly not each and every celebrity uses their social media handles by themselves, and if someone is sending you a QR scanner or other source to transfer money is a scam.
  1. Excessive payouts and guaranteed returns – If a person or an organization claims excessive payouts or guaranteed returns in a short span by investing through their source in the market, it indicates a crypto scam. Acquiring a good amount of returns takes time, which could be weeks, months, or even years. Investing in cryptocurrency or other derivatives and obtaining it for a long time can reward you with adequate gains.
  1. A love interest asks for crypto payments – Dating apps are one of the most accessible interfaces to target scammers as it includes emotions. For instance, if you are connected to a person on a dating site or app asking for money, or crypto assets, it could be a sign of fraud.
  1. Offering free money for associating – If a person claiming to be a broker confronts you to associate with them while providing you free money and guaranteed returns on your investment portfolio. Abide in quality assurance because legitimate brokers do not make bold or inadequate statements irrelevant to the process.

How to Avoid Cryptocurrency scams?

  1. If a person or a firm claiming to assist you with market twigs but wants you to provide them with a private key to your digital wallet (a storage unit for crypto assets online), refrain from acknowledging the offer as legitimate brokers or investment managers wouldn’t ask you for any information regarding your investment account.
  2. Receiving an unsolicited call, email, or SMS containing the perks of associating with them while clicking on the URLs or links provided may be suspicious. Avoid these kinds of offers as they may redirect you to an unsecured web page which may extract all your personal or fiscal information for deceptive activities.
  3. A cryptocurrency scheme offering you excessive income in a short span with minimal investment can be a too-good-to-be-true offer. Priorly, avoid these deals as there is nothing like the ‘quick money’ concept; all investments require time and skill management.
  4. If a person contacts you from a social media site templating various benefits to invest under their guidance can be apprehensive, or they can use a ‘celebrity endorsement’ post for assurance that they are legitimate. However, these offers do not exist, and one should avoid them immediately.
  5. If you have associated with a firm for acquiring investment tips and tricks and they demand you to invest in an inconsistent asset immediately, beware, it could be a trap. Avoid these kinds of firms that pressure instead of teaching and strategizing about the market.


Cryptocurrency scams are inevitable, just like any other market scams. Unfortunately, due to the transparency and volatility of the market, it is easier for scammers to manipulate investors with their allegedly inaccurate offers. However, if you are genuinely willing to learn about the cryptocurrency market, connect with experts and professionals of the market as they acquire knowledge and strategies about the market price values and how to overcome constant volatility.

By Anurag Rathod

Anurag Rathod is an Editor of, who is passionate for app-based startup solutions and on-demand business ideas. He believes in spreading tech trends. He is an avid reader and loves thinking out of the box to promote new technologies.