The Top 5 Biggest Crypto Scams: Lessons & Safety Tips

In 2024 alone, crypto scams claimed over $2.2 billion in funds, from simple phishing scams to sophisticated rug-pulls. Scammers follow the money, and because cryptocurrency is a lucrative investment venture, you’ll find scams there, too. To avoid them, you have to know what these schemes are. Here is a glimpse at the top 5 biggest scams in the crypto space: 

1. Phishing Scams
2. Social Media Giveaway Scams 
3. Rug Pull Scams
4. Romance Scams 
5. Fake Crypto Exchanges

This article will explore these scams with real-life examples and practical security measures. This way, you can avoid falling victim to scams and safeguard your funds.

What Are the Five Biggest Crypto Scams Ever?

1. Phishing Scams

Almost every industry is a victim of treacherous phishing emails. Unfortunately, crypto is not spared from these phishing attacks. Scammers send embedded links via emails to unsuspecting victims. The link leads to a page that mirrors that of an authentic crypto platform, like a crypto exchange or wallet. This page prompts you to enter your details, like username, password, or private keys. The scammer then uses the details to infiltrate your wallet and clear your funds.

The 2020 Ledger hack is a famous example of a phishing scam. The scammers forged the legit platform’s emails and sent the altered emails to users to get their wallet login details, which they later used to wipe their wallets clean.

A clear giveaway of phishing scams is usually the website URL. The cloned site often has a different URL address. The differences are usually subtle, but if you look closely, you might catch them. For example, Bittrex.com versus Bilttrex.com. The latter is a fake and a scam site.

2. Social Media Giveaway Scams

Giveaways are expected in the crypto space as they help to foster a loyal community around a new project in its early stages. These giveaways are often done on social media. Therefore, malicious individuals have now taken advantage of this to cheat people of their hard-earned funds, leaving them empty wallets after fake promises of giveaways.

The scammers impersonate legitimate social media accounts and lure investors with ridiculously good deals. When investors send assets to the scammers, their deposits disappear with nothing in return. These perpetrators often make millions with this sly tactic. 

A popular example is the Elon Musk scam that took place in 2021. Investors thought the tweep was the real Elon Musk inviting them to a special event to double their Bitcoin. The site looked legit, so investors deposited, expecting to double their investments, but instead, they got scammed. 

3. Rug-Pull Scams 

Rug Pull scams are technically pump-and-dump schemes. The scams start like almost every crypto project. The scammers get celebrities and media personalities to participate in the PR. An example of how celebrities play a role in these scams is the Racksterli Ponzi scheme. Several celebrities and public figures vouched for the scheme’s credibility. But not long after, many Nigerians pooled into the project and had their funds meet an irretrievable end. 

A recent rug-pull crypto scam was the Squid Coin, named after Squid Game. Not long after its release, the Squid token price peaked. Then, the scammers had the rug pulled from the traders’ feet, leading to a loss of over $3.3 million to the scheme.

4. Romance Scams

Romance scams are popular crypto scams usually perpetrated online. The scammer uses various manipulation techniques to gain the trust of their lover. After gaining trust, the scammer begins requesting crypto assets—a deceptive tactic that often leads to the victims unknowingly handing over credentials and funds. Romance scams top the list of financial fraud schemes.

5. Fake exchanges

Fake crypto exchange scams happen when scammers create an exchange that mirrors legitimate platforms and put a lot of publicity into the scam to attract investors. By the time investors try out the exchange, their deposits are rendered inaccessible and accounts are swept clean of all their funds. 

How to Safeguard Your Crypto Investments 

The saying, prevention is better than cure, is an advice you should hold close to your heart as you navigate your crypto journey. So, how do you spot fake offers from legit ones? Here are safety tips you need to know to safeguard your investment:

1. Be Wary of Freebies: People like free things, and nobody knows this better than these scammers. So, the next time you get a freebie unprovoked in your email, social media DM, or via any channel at all, triple-check before you even consider jumping on the offer. 
2. Examine the Project Properly: These scammers want to make a quick buck, and rug pulls are some of their best tactics. They would usually present as legitimate projects, but the more you look, the less you see. 

These projects usually don’t have any solid use-case in the market and are not backed by reputable teams. If you take the extra step of researching their whitepaper and the people behind them, you’ll have a higher chance of telling the real deal from the fake.

Legit projects have thought-out roadmaps that investors can follow. They also indicate their project’s use case (genuine use cases that aim to provide crypto-related solutions). Researching the team members and their qualifications is an excellent way to reinforce your project research. Probe them about the project and carefully peruse their answers for gaps. 

3. Keep It Private: Be wary of messages that ask for your personal information. No one needs your private key number for legitimate crypto transactions.
4. Avoid Promotional DMs: No celebrity will DM you offering an investment opportunity. Don’t take financial advice from celebrities; do your research (DYOR). 

Frequently Asked Questions (FAQs) About The Top 5 Biggest Crypto Scams 

Can I Trace A Crypto Scammer? 

Yes, you can. However, you should know that it is not an easy or guaranteed process. While you can trace the transaction details and wallet address, the real person behind the wallet address is usually a hassle due to the anonymous nature of cryptocurrency. 

Can I Get My Money Back From A Crypto Scam?

You can’t reverse a crypto transaction. The only way to return your investment is if the receiver returns it. However, you can contact lawful enforcement agencies, as it may be possible to recover part or all your funds legally.   

How Do I Know A Potential Crypto Scam?  

Watch out for offers that are too good to be true or ask you for personal details. When someone approaches you with a grand offer without a logical backing to support their claims, double down on your questions. For instance, ask questions like “How do you intend to double my deposit in 24 hours?” 

Are There P2P Crypto Scams? 

Yes, there are. However, you can avoid P2P scams by opting for safer options like the Breet App. We are your best pick for safe and seamless crypto transactions. We provide a seamless experience with exceptional security systems in place, backed by encryption and firewall protection. 

What Are Pump and Dump Scams? 

Pump-and-dump scams work by falsely inflating a crypto asset through false positive statements and exaggeration. The perpetrators then sell off their investments to make massive profits when the price rises.  

Conclusion

Many investors have made a fortune with cryptocurrency, and many more will! Cryptocurrency’s lucrative nature means there will always be new investors—many of whom are unaware of crypto scams. While this article addresses the biggest scams, there are several others.

To avoid crypto scams, ensure you peruse every new crypto project before investing. Don’t take crypto investment advice from celebrities. Never reveal your personal information. Above all, use a reliable platform for your crypto transactions. Breet is highly recommended for securing crypto-to-cash and crypto-to-crypto transactions, and you enjoy competitive rates & peace of mind!