Common types of Cryptocurrency Scams
There are many types of Cryptocurrency scams - too many to list here. Below is a short list of the most common types, but remember to always be vigilant and seek further education on other types of cryptocurrency scams.
| Phishing scams: Cybercriminals impersonate legitimate entities to deceive users into sharing sensitive information or sending funds to their digital wallets. Phishing scams can appear on fake websites, in emails, or in messages on social media platforms. | Ponzi and pyramid schemes: Luring investors with the promise of high returns, these scams require a constant influx of new members to maintain payouts. Early investors are paid using new investors’ funds, creating an unsustainable cycle that ultimately collapses. |
| Fake initial coin offerings (ICOs): An ICO is a way for a company, typically a young startup, to raise funds. Some scammers create fake offerings to lure investors into purchasing tokens for nonexistent projects. The fraudsters behind these schemes typically disappear after they collect substantial funds. | Pump-and-dump schemes: These scams involve artificially inflating the price of a cryptocurrency (through coordinated buying), then selling the asset once the price has risen significantly. Unsuspecting investors who buy into the hype are left holding the bag when the price crashes. |
| Malware and ransomware attacks: Cybercriminals use malware to infiltrate users’ devices and gain access to their cryptocurrency wallets. Ransomware attacks involve encrypting the victim’s data and demanding payment in cryptocurrency to unlock it. |
Address Poisoning Attacks: Address poisoning is a deceptive tactic used by malicious actors. They send small amounts of a legitimate token (such as USDC) from an address designed to look similar to your own or to a frequently used address. The goal is to trick users into accidentally copying and sending funds to the attacker’s wallet, believing it to be a familiar one. |