Top 10 Common Crypto Scams to Avoid in 2023

Despite the legislative gaps in the field of cryptocurrencies, one should accept the fact that digital assets have firmly entered everyday life. Millions of people who believed in the prospect of cryptocurrencies managed to make a fortune on the growth of rates.

However, the flip side of the coin is that the number of cases when investors end up in the red is growing. Today, we’ll talk about the main types of cryptocurrency fraud that can lead to significant financial losses.

What Does Crypto Scam Stand For?

It is necessary to deal with the dilemma of how cloudless the future of digital assets is compared to fiat money. The answer is obvious: the prospects for decentralized systems are huge. A few decades ago, the world did not hear about plastic cards, virtual accounts, or electronic wallets. Today, it is a reality from which one cannot hide.

The situation is similar with cryptocurrencies. Decentralized payment systems will evolve, but there are several major obstacles along the way. The main one among them is the opposition of states. By integrating cryptocurrencies into the domestic market, governments lose a powerful tool of financial control. Related to this is the reluctance to approve blockchain technologies at the legislative level. Hence the growing number of fraud cases since not all countries provide criminal liability for the theft of digital assets. As a result, we have 10 crypto scam schemes to avoid in 2022. Let’s consider all of them in more detail!

Unpromising ICOs

Since the cryptocurrency boom has passed, it has become hard to make a fortune by buying listed digital assets. The desire to get rich has generated investors’ strong interest in ICO projects. The term ‘ICO’ stands for Initial Coin Offering before these coins enter an exchange. This benefits both issuers and buyers. Thus, issuers get the opportunity to receive funds for the project development, while buyers — to make a profit several times higher than the initial investment.

Therefore, fraudsters laid eyes on this method of stealing money. Such projects promise fabulous profits in the shortest possible time, holding users’ trust. There are several signs of unpromising ICOs:

  • the banality of the idea;
  • unclear description of the project;
  • powerful marketing campaign;
  • lack of a team of experienced developers;
  • negative opinion of the cryptocurrency community about the project.

Do not believe in the prospects of an ICO project made in haste. If blockchain development costs do not exceed a few hundred dollars, then it is unlikely to shoot. Before investing in an ICO, it is necessary to study in detail the information about it (goals and objectives, roadmap, stages of issuing coins, security, etc.).

Phishing Websites

The promise of cryptocurrency for free is a clear sign of a scam. A common type of phishing is email broadcasts. How does this work? Users receive messages from various services or blockchain platform developers. The letter indicates that there was recently an unauthorized attempt to enter the owner’s cryptocurrency wallet. Next, it is proposed to follow a link to check the availability of funds. The link interface is identical to the one used to enter a digital wallet. This way, username and password information becomes available to attackers. They, in turn, steal your funds and send them to themselves.

Pyramid Projects

The market for investment programs using cryptocurrencies is still a ‘grey area’ of blockchain technologies. The number of online services offering to invest digital assets at a high-interest rate is growing steadily. Unusually high returns (25-40%) indicate a high risk of scams. Most often, profit on such services is paid out from the investments of other investors.

Among the obvious signs of a cryptocurrency financial pyramid, we note:

  • the promise of fabulous profits;
  • lack of transparent financial reporting;
  • registration of a legal entity in offshore companies or on nominees;
  • numerous loyalty promotions, discounts, and referral programs.

The creators of many pyramid projects explain that cryptocurrency mining or investing in promising developments provides a high return on investment. Still, it is difficult to verify the veracity of these statements. If the mining of digital assets was so profitable, there would be simply no need to attract investors.

Read Next: 3 Most Famous Blockhain Pyramid Schemes in the Crypto World

Clone Services

One should be wary of clone services or Internet resources with a bad reputation. They operate by analogy with phishing websites, luring gullible owners of digital assets with a similar interface. The number of clones created to copy well-known services is constantly increasing. Moreover, fraudsters even engaged in the development of fake apps. How to avoid this type of crypto scam? Well, you can recognize a clone by typos, a modified logo, and a non-original background. Be extremely careful and use only trusted services.

Address Change

This type of scam is usually found during a P2P crypto exchange. When service credentials are hacked, sending addresses are falsified. This way, users send their digital assets not to exchange but directly to fraudsters. Similar schemes are used when hacking messengers or social networks — a cryptocurrency holder is asked to urgently exchange coins at the specified address.

Wallet Hacks

Popular cryptocurrency wallets have several levels of protection. Only experienced programmers can hack them. Without special knowledge and equipment, the chances of gaining access to someone else’s crypto wallets are zero. Still, there are the following actual hacking options:

  • phishing emails;
  • fake services (clones);
  • bypass two-factor authentication;
  • viruses that steal passwords stored on a personal computer;
  • malicious programs (keyloggers) for stealing user data.

The options listed are based on inattention. Do not neglect security software, carefully study the interface of cryptocurrency services, and use several degrees of authorization to access your wallets.

Project Bankruptcy

Mayor cryptocurrency exchanges value their reputation and apply several degrees of protection against hacking. Small-scale projects, in turn, do not bother with the protection of user accounts and sometimes declare bankruptcy and steal the digital assets of cryptocurrency holders.

Unfortunately, it is impossible to predict the bankruptcy of crypto exchanges and services. Especially taking into account the recent events on the crypto market when one of the world’s biggest cryptocurrency exchanges, FTX, has filed for bankruptcy protection.

Still, usually, small-scale exchanges lure their clients with low (or zero) commissions, bonuses, or profitable referral programs. Cryptocurrency exchanges, initially created for future scams, use fake names or interfaces to look like well-known brands. Such services usually send advertisements to cryptocurrency communities and by email. The closure is announced unexpectedly, and a hacker attack is usually named as a reason.

Thus, when it comes to selecting a crypto exchange, security should always be the top factor to consider. Switchere is one of the most reliable online exchanges for buying cryptocurrencies, which protects users’ assets with two-factor authentication, 3D secure protocol, and high-end encryption technology. 

The company is a licensed financial services provider with guaranteed legal compliance and a secure infrastructure system for fast crypto exchange services at fair prices.

NFT Price Markups

Non-fungible token (NFT) is a unique blockchain code. It is stored in a decentralized ledger, where transactions with a specified asset are also recorded. The software allows you to turn any image into an NFT. Fraudsters steal works of art from famous artists and then put them up for sale as NFTs. In this case, a fake NFT is purchased since NFT rights should not be confused with intellectual property rights.

Another way to cheat in the cryptocurrency market is to sell an NFT object to yourself at an inflated price. Other buyers see how much was paid before and often take it into account when making a transaction.

Blockchain Vulnerabilities

After the rates of well-known cryptocurrencies skyrocketed, scammers began to look for gaps in blockchain operation. Blockchain provides a secure ledger, and the data stored in it is immutable and safe. Still, the hacking risks remain at the registry’s entry and exit points. This is where people or APIs interact with the data.

Blockchain technology needs channels to explore information. They, in turn, are subject to hacking, theft, and fraudulent manipulation. Cryptocurrency wallets (exchanges, services) are usually used as endpoints and digital ecosystems as communication channels. Using two-factor authentication and proven platforms are recommended to guarantee the security of tokens or altcoins.

Other Fraudulent Schemes to Know

There are dozens of other fraudulent schemes which may lead to significant financial losses. The main types of theft have already been considered. Among other schemes, we indicate:

  • network marketing;
  • fake wallets;
  • investments in dubious projects;
  • donations and playing on human emotions;
  • payment for fake goods and services with cryptocurrency;
  • the use of computing power in cloud mining without payment.

Mindfulness is the key to the safety of digital coins in the world of cryptocurrency. Think over every step with payment or transfer of digital assets, and use only trusted services with a good reputation.

How to Check a Project Before Investing?

A cryptocurrency investment should be thought out in detail, especially concerning ICO or IDO. If the developers promise fabulous investment returns, the project will surely not pay off. Most hype developments disappear after receiving digital assets from unsuspecting users. Evaluate project information carefully to avoid losing funds. A promising project has the following features:

  • the interest of the creators;
  • innovative and useful idea;
  • experienced development team;
  • balanced roadmap;
  • feedback from programmers.

If at least one of the features is missing, this is a serious reason to think about the feasibility of investing in a project.

Read Next: Best Ways to Evaluate a Cryptocurrency Before Buying It


Vigilance is the main weapon of the owner of digital assets in the fight against fraudsters. According to statistics, more than 90% of scams in the field of blockchain occur due to the inattention of token holders. Protect your electronic wallet with two-factor authentication and use only proven services to avoid losing your digital assets. Do not chase fabulous returns on investments, invest wisely, install licensed antiviruses on your PC, and do not trust personal data to third parties. By following the above list of recommendations, you can significantly minimize the risk of cryptocurrency fraud.

Leave a Reply

Your email address will not be published.