- The most common cryptocurrency scams
- Fraudulent trading platforms
- Pig slaughter scam
- Impostors
- Love scam
- Conclusion
In 2023, investors lost about $2 billion dollars to fraud, scams and hacks. Although blockchain technology is becoming more secure and stable, and many users are becoming more aware of the tricks used to steal assets, scammers still have ways to steal cryptocurrency.
The experts at Kryptocasinos.com have compiled a list of the most common scams being used in 2024, as well as pored over how they can be identified and avoided. The data was gathered from the Department of Financial Protection and Innovation’s (DFPI) ‘Crypto Scam Tracker’, which contains up-to-date information on scams as they are reported, including descriptions of fraudulent activities and names of fraudulent sites.
Fraudulent trading platforms
Of all DFPI reported scams, 87% included an element of using a fraudulent website or trading platform. These scams involve a fake website or app that convinces victims to deposit funds on the platform under the guise of providing access to a unique investment opportunity or that it is a trusted site. Fraudulent platforms appear legitimate, to the point of replicating price movements and generating artificial profits. These platforms are often advertised online and may look identical at first glance.
How to avoid:
To protect themselves, investors should only invest in trustworthy exchanges or transfer cryptocurrency to reliable wallets. By sticking to these rules, you can ensure that your money is safe. If there is uncertainty about whether a website is legitimate, check the URL to make sure it is an official website. There are many services on the internet that can check URLs and warn you if they are fraudulent. Please note: If a website’s URL starts with HTTP instead of HTTPS, this can also indicate that the site is not secure.
If it’s an app, check the developer and information about the app. This can be done in your device’s store. Trustworthy apps will have the names of the developers and additional information including the number of downloads, which can be another good indicator of the legitimacy of the platform. You can also follow links from the platform’s official website. If a stranger is pushing you to sign up and deposit funds on an unknown platform, this should be a red flag and you should proceed with extreme caution.
Pig slaughter scam
A pig slaughter scam is a long-term scam and investment fraud in which the victim is gradually tricked into contributing more and more to a fraudulent cryptocurrency scheme. It’s called a “pig slaughter” scheme because the criminals “fatten up” the victim to gain their trust” before “butchering” them.
They are mainly carried out through social media platforms, trying to get the victim to transfer funds to a fake platform. Such a platform usually pretends to be genuine and offers artificial profits so that the victim will continue to use the platform and possibly make more deposits. However, the victim is never allowed to withdraw their money from the website and may be required to send additional money for several reasons (such as service fees or IRS taxes) before any money is withdrawn; this only adds to an already possibly large financial loss. This scam was featured in 58% of reports to DFPI.
How to avoid:
Don’t lose caution online. Criminals can also contact victims via WhatsApp and text messages. The best way to protect yourself is to completely ignore and block messages from strangers. Some scammers are now even trying to impersonate family and friends, so it’s even more important to double-check that you know who you’re talking to. Criminals will never want to meet and may not want to talk on the phone if they are impersonating someone else as this will reveal their real identity or they are not who they say they are and so if they are excessively avoiding communication, this is a clear sign of deception.
Impostors
Impostor fraud occurs when a fraudster impersonates a reputable company, government official, or well-known individual to gain access to a user’s systems and personal data for financial gain. The criminal may also use other fraud techniques and try to get victims to deposit money on fake platforms.
Many scammers use social media to find their victims and some try to transfer correspondence to WhatsApp. This scam was mentioned in 27% of all reports to DFPI. An example reported to DFPI was a scam where people posed as BlackRock, a legitimate investment firm, on Facebook and WhatsApp to entice victims to trade cryptocurrency options, promising high daily profits. However, the links were then fraudulent, which meant that all the money deposited would have been stolen.
How to avoid:
If you are contacted by strangers on social media, it is important to remain cautious; any message trying to convince you to invest in cryptocurrency should be seen as a red flag. If someone asks to transfer the conversation on WhatsApp, this can also be a significant indicator that someone is trying to scam you, so it’s best to block the account and report them. The companies mentioned above, such as BlackRock, will never approach you personally asking you to invest; they can also be checked by making sure that the links to these websites are legitimate and not fraudulent.
Love scams
Love scams are another very popular type of scam that takes advantage of the popularity of social media and dating platforms to create a fake online profile to gain the affection and trust of the victim, and then uses the illusion of a romantic or close relationship to manipulate and/or steal from the victim. Cryptocurrency fraud tracker DFPI reported a case involving a California resident who said she met “Mark” on the dating app Bumble. Mark asked the victim to switch the conversation to WhatsApp. They continued to communicate, and at one point, Mark told the victim that he could teach them how to trade cryptocurrency. Mark convinced the victim to deposit money on a fraudulent platform where the money would eventually be stolen, resulting in a loss of over $50,000.
How to avoid:
As with impostor scammers, any strangers who try to entice you to invest should be approached with caution. Online accounts often use stolen photos and videos to create the illusion that they are real people, and it is often difficult to detect these accounts. Images can be re-checked on Google to see if they were taken from somewhere else; for example, a report on ‘Mark’ stated that after research, it was discovered that the scammer had used photos of a popular fitness enthusiast.
Conclusion
A spokesperson for Kryptocasinos.com commented, “In the world of cryptocurrencies, fraud is a real threat, so it’s important to stay safe. Always check and make sure you are using trustworthy platforms and wallets.
Never give your private keys or personal information to anyone. Be wary of offers that seem too good to be true and double-check everything before investing. By staying informed and exercising caution, you can protect yourself from scammers and safely enjoy the benefits of cryptocurrencies.”
