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The Most Common Cryptocurrency Scams of 2024

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Financial scams have always been a major issue for consumers, but the amount of these scams has exploded since cryptocurrency has fallen into the mainstream. According to the Federal Trade Commission (FTC), from January 2021 through June 2022, over 46,000 people reported losing more than $1 billion in crypto to various scams. Keep in mind, this figure only includes individuals who willingly shared this information with authorities; the actual numbers are likely much higher. Unfortunately, the vast majority of consumers tend to have little knowledge of how digital currency works or even how to secure their digital assets. Since cryptocurrency payments lack legal protections or government assurances, they are especially attractive to scammers. Additionally, there is no bank or centralized authority to flag suspicious crypto transactions, and all crypto transfers are irreversible. Given these factors, the industry is ripe for massive fraud.

Whether you’re interested in investing in crypto or you already have digital assets, it’s essential to be aware of the most common types of crypto scams, how to identify them, and what to do if you become a victim. Below we’ve given you an overview of the most common crypto scams that authorities are currently seeing, along with how to spot them early.

Types of Crypto Scams to Beware of in 2024

Crypto scammers are highly creative when it comes to luring victims into traps or obtaining personal information. Many crypto scams involve some form of impersonation and a variety of carefully crafted lies tailored to the targeted victim. The most common types of crypto scams include:

Blackmail and Extortion Scams: Some scammers claim to have embarrassing personal information, such as your photos or videos, to lure you into a trap. They typically threaten to make the information public unless you comply with their demands, which often involve sending a crypto transfer right away. If you encounter such a situation, report it to the Federal Bureau of Investigation (FBI) immediately. Do not send any money to the thief, and do not communicate with them.

“Business Opportunity” Scams: In this scam, someone contacts you with a business opportunity promising to help you get rich. They may try to persuade you to hand over your crypto by promising exceptional returns, sometimes even doubling or tripling your crypto assets overnight. Remember, there is no such thing as “guaranteed returns,” especially with digital assets. If someone promises to make you wealthy quickly with your crypto, do not engage.

Fake Job Listing Scams: Crypto thieves create fake job listings or send unsolicited job offers to lure new victims into their scheme. These “jobs” usually involve the crypto field, such as crypto mining or recruiting other crypto investors. Regardless of the specific role, they all have one thing in common: you have to make a payment in crypto to get started. The scam can take on various forms from there. The scammer might convince you to make additional payments, or they may make a deposit into your bank account and ask you to send them cash, only for their original deposit to fail.

Giveaway Scams: This scam promises free money or another type of prize if you follow their instructions. Many scammers impersonate celebrities or influencers to lure in unsuspecting victims. For example, crypto scammers often impersonate Elon Musk on social media and in videos to get people to send them digital assets. A “Freedom Giveaway” crypto scam on Twitter, supposedly by Elon Musk, promised free crypto to the first 1,000 new followers who signed up, but it was a sham. With the advent of AI in the mix, these scams are only going to grow larger over time.

Impersonation Scams: These scams involve impersonating someone else to gain credibility. For example, crypto scammers may claim to be from the government or law enforcement to convince you that your accounts or assets are frozen as part of an investigation. They may also pretend to be from a large company like Amazon, Microsoft, FedEx, or even your bank. Regardless of the story they use, their goal is to get your crypto.

Investment Scams: In this scam, an “investment manager” you have never heard of contacts you with an incredible investment opportunity. The process usually starts with you sending crypto to their online account or downloading an app that promises to make you rich, and you need to act quickly. Many of these scammers have legitimate-looking websites that use complicated investing jargon to seem real. However, if you log into your account with the platform, you may be blocked from withdrawing your money or only able to access your cash if you pay an exorbitant fee.

Phishing Scams: Phishing scams occur when someone pretends to be a company, usually through an official-looking email, to get you to share private information. Many crypto phishing scams aim to get you to share your private crypto wallet keys by sending an email that asks you to log in to your account.

Pump and Dump Schemes: This scam occurs when a group of people entices others into investing in a particular coin, usually by posting on social media to build up hype. Scammers work together to drive up the price of the asset until they all simultaneously cash out, leaving all the new and excited investors holding the bag.

Romance Scams: Romance scams are also prevalent in the world of cryptocurrency. In this scam, someone pretends to be your love interest online, usually by weaving an intricate web of lies about themselves. These scammers can spend months building romantic feelings with you, at which point they ask for crypto payments or lure you into investing crypto with them to “spend your lives together.” However, the romantic encounter was always fake, and the person on the other end of the line wasn’t who they claimed to be.

How to Identify a Crypto Scam

When it comes to crypto scams, several tell-tale signs indicate that you’re about to be duped. Watch out for the following:

  • Anything that seems too good to be true: If a crypto offer seems too good to be true, your instincts are likely correct. Nobody is going to offer you free crypto for doing practically nothing, and a little research can help you spot big claims that aren’t backed up by any data.
  • “Pay to play” job postings: You should never have to pay a fee to do a job or secure a position in the crypto industry. If someone makes you a job offer that requires upfront payment, you should run.
  • Promises of guaranteed returns: Nobody can promise guaranteed investment returns, and that’s just as true in the crypto industry as it is with traditional financial investments.
  • Unexpected communications: If you receive an email, a phone call, or a text from someone asking you to log into a crypto account, send in crypto to resolve an issue, or get involved in a business opportunity, you should promptly ignore it.

Protect Yourself Against Cryptocurrency Scam

The best protection is information. Once you know what to look out for and something seems too good to be true, then it would be best to not make rushed decisions. Make sure to observe due diligence. If something seems off regarding investments or a business opportunity, do not hesitate to contact us at Haywood Hunt & Associates. We are experts in Cryptocurrency Investment Scam Investigations.

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