Online Scams has been around since the world wide web started, and a few years ago it looks like scammers has found another industry to make money off– the cryptocurrency space. The cryptocurrency space is infested with scams due to it’s pseudo anonymous nature, allowing scammers to get away with huge heists with little to no trace.

The best way to not get caught up by these scams is simply to educate yourself and be extremely cautious in everything you click online. Here are some of the common scams that are being used in the cryptocurrency space.

Phishing sites

Phishing sites are scam sites that are masquerading as certain legitimate websites like social media sitesonline banking sitesexchange sites, crypto wallet sites, etc., tricking people that the website they’re in is the legitimate one. Most of these phishing sites looks exactly like the website they’re pretending to be.

Once you enter your username and password on the phishing site, your login credentials would then be immediately sent to the scammer, then the scammer would quickly login to your wallet/exchange, and withdraw your funds to the scammer’s wallet.

Phishing sites mostly appear on Google and other search engine’s ads. You do a simple search query, typing up “Binance” or “Binance exchange”, and so if you don’t use an ad blocker, there’s a good chance that the search top result would most likely be an advertisement.

It clearly says “www.binance.com/“, on the displayed link, but when you actually click on the link and take look at your browser’s address bar, there’s a decent chance that the site is going to be something like “binancel.com“, “binancesite.co“, or something else that isn’t the legitimate “binance.com“.

Some scammers are even so tricky, as they use domains like “biṇaṇce.com“.

You might not have noticed it immediately, but it’s actually a ‘, a latin character(a letter ‘n’ with a dot below it).

Always keep your eyes peeled. Some hackers and scammers are very smart, and can create other ways to trick people into clicking their phishing links.

Take note that this doesn’t only occur on exchanges. These phishing scams exist to steal accounts on Facebook, Coinbase, MyEtherWallet, etc.

Also, these scams aren’t only spread through search engine ads. Phishing links could also be spread through emails, social media, forum posts, articles, etc. Scammers may email or message you something along the lines of: “Your account has been locked due to suspicious activity. Click on the link below to unlock your account“; and the link they’ve given you would actually be a phishing link.

Common signs of a phishing site:

  • The site contains a different URL – no matter how similar the URL is to the website you’re planning on using, if it’s not the exact URL then it’s most likely a phishing site. (e.g. colnbase.com instead of coinbase.com).
  • The site doesn’t have a secure badge.
    Though take note that some scam sites can have security badges.
  • The site’s appearance and overall feel looks strange or weird; as some phishing sites are unable to copy the original website with 100% accuracy.

Common sites being used for phishing

  • Coinbase
  • Binance
  • MyEtherWallet
  • Any other exchange
  • Online banking sites

Tips to not get phished:

  • always do a double or triple check on your browser’s address bar and confirm if you’re actually on the legitimate website.
  • install an ad blocker on your browser, or use Brave browser instead.
  • don’t do a Google search on the website you’re planning on opening. Instead, type the URL manually and accurately on your browser’s address bar; or better, save the legitimate website as a bookmark.

Twitter Giveaway Scams

Twitter giveaway scams are pretty straightforward. The scammer would make a fake Twitter account masquerading as a famous person in the cryptocurrency industry or technology industry in general, then the scammer would then reply on the legitimate person’s tweet, saying something along the lines of:

This scam should be pretty obvious, but unfortunately some people still fall for it.

Investment scams/Ponzi schemes

Investment scams has existed pretty much since the internet was first gaining traction.

Investment scams and ponzi schemes mostly have well-designed websites that claims to give you 10% profit daily from your deposit or something along those lines.

They ask you to deposit a certain amount of money(or crypto, in this case), and promise a amount in return every day, week, month, or year. Some investment scams allow you to withdraw your profit for a while, in the hopes of you depositing more money, then they simply lock up your account. Losing you access to your money.

Today, most of these scams mostly pretend to be “trading bots“, “cloud mining sites, “bitcoin/crypto investment sites, etc.

Yes, some people do make money off these sites, by using the site’s referral program. If you invite another person into the program and get the person to deposit money, you get a small percentage off the deposit. These scam sites mostly use referral programs to get people to spread these scams online for them; sometimes even to the point of YouTubers spreading them, causing a huge number of people to fall for these scams.

If you wanted to invest in the cryptocurrency market, buy the coins/tokens using reputable exchanges and hold them on your own secure wallet.

Some famous ponzi scams in the past:

  • BitConnect
  • DavorCoin
  • HashOcean

Pump and dump schemes

Pump and dumps are pretty easy to spot, as pump and dump group leaders usually advertise them as “pump groups” or “trading signal groups“.

The scheme is pretty straightforward: The leader asks his members to buy a certain coin/token that is quite low in marketcap to make the price far easier to manipulate, claiming that it will raise or “pump” in price. Well the thing is, before the leader actually announces the coin/token, the leader already loaded up his bags with that certain coin/token, so the leader can sell them in a significantly higher price. The prices then do increase because of the group members buying loads of the specific coin/token, while the leader is selling at higher prices. Earning the leader significant amounts of profit.

How do you not fall into these schemes? Easy. Simply don’t join these groups, and invest wisely.

Scam ICOs

Initial Coin Offerings or ICOs is quite similar to crowdfunding whereas the company/team accepts BTC/ETH from the people in exchange for a certain amount of their coins/tokens, depending on how much you sent them.

ICOs aren’t really scams as some are definitely legitimate, but a good percentage of ICOs are indeed scams. The thing is, some well-made ICO scams are quite hard to detect as a scammer could create a legitimate well-thought project and simply just not deliver and run away with the money. Though there are some scam ICO characteristics that could be enough proof for you to stay away from certain ICOs.

For more information about ICO scams, refer to this guide: Detecting Scam ICOs

Exchange/gambling site deposit scams

This scam usually takes place by someone asking you to use a certain gambling site, and them saying that they gave you some free bitcoin to start playing/gambling with. You then play and gamble the money away, mostly with you getting huge win-streaks and you ending up with significant amounts of winnings. So what would you do after playing? Attempt to withdraw the funds of course.

But wait, there’s more! The website then asks you to deposit a certain amount of bitcoin(usually only around 0.1 BTC, to not make the scam too obvious), claiming  that deposit to be for the “withdrawal fee”. If you made the deposit, then boom. Free 0.01 BTC for the scammer.

This scam usually is being attempted via private messages on forums and such, to prevent the more knowledgeable people from exposing the scam.

You can avoid this scam by simply not entertaining such offers on private messages or emails.

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