Cryptocurrency technology may be relatively new, but scammers are using many of the same old scams and schemes to steal money. They have found a way to apply these old methods to cryptocurrency. Below are some of the most common cryptocurrency scams, and if many of them look familiar, that’s because they are. Thieves have been using them for years.

TheRug Pull Scam

Investment scammers promote an NFT token, new project, cryptocurrency or coin to get funding. Once they get the funding, they disappear with the money. The “investment” is made in such a way that the target cannot sell the Bitcoin after purchasing it, leaving them with an investment that has no value.

Business Opportunity Scam

There are several variations of this scam, but most often someone contacts the victim offering some kind of “business opportunity.” They claim that they will help the target get rich — for a small amount of cryptocurrency. In other cases, they convince the target to send them cryptocurrency by promising a “guaranteed income.” This includes doubling or even tripling their assets overnight. The truth is that the “guaranteed income” is a myth, and a dangerous one if you believe it and act on it. The only person who will get rich overnight is the scammer.

Ponzi schemes

This is a very old scheme, but it still works. Old investors get paid by the profits made from new investors. Cryptocurrency scammers use Bitcoin to lure new investors, promising big profits with minimal risk and often a “guaranteed return”. The problem is that this is a circular scheme that never involved any legitimate investment. The whole point is to target new investors for financial gain through cryptocurrency.

Job offers and fraudulent employees

This is a very broad field for fraud. Fake recruiters contact clients with an interesting job offer. The catch is that they have to pay for the training – in cryptocurrency. “Dark labor” scams are also common. Foreign scammers pose as remote workers from the US. They look for NFT-related projects and part-time jobs and hack into systems or transmit documents with malicious code that allows them to steal information and cryptocurrency.

Investment scams

Scammers contact potential or active investors and pose as experienced, professional “investment managers.” They lure investors in by telling them about the huge profits they’ve made from investing in cryptocurrency, promising that they can help them make millions too – all they need is an upfront payment to get started. That’s the last time the target ever sees the “investment manager” – the scammer steals the payment and disappears. In some cases, the scammer may also ask for personal information, claiming to need it to fund an account or transfer funds. This gives them access to the client’s cryptocurrency, which they also steal. Fake celebrity endorsements and testimonials from reputable corporations are also common tactics scammers use to lure in victims and make them appear more legitimate.

Phishing Scams

These scams have been around for years, but they are still some of the most common. The scammer sends an email containing a malicious link to a fake website. This website is designed to collect personal information, which may include information about cryptocurrency wallet keys. Cryptocurrency wallet keys are not like passwords. Each digital wallet has a single, private, unique key. If this key is stolen, the owner must create a new wallet to get a new, unique key. Many people fall for this type of scam because the emails look legitimate, just like the websites. That’s why experts warn that you should never click on a link in an email.

Fraud with front men

This is one type of money transfer scam, but there are many scams that fall into this category. The crypto thief claims to be from law enforcement or a government agency, which inspires confidence. The scammer convinces the victim that they are under investigation or investigation, resulting in their assets or accounts being frozen. They then offer a “way out.” The target can solve the problem by paying them in cryptocurrency. In other types of scams, the scammer may pose as a bank employee, FedEx, Microsoft, or Amazon. Ultimately, it’s all the same thing – they just want to steal the customer’s cryptocurrency.

Blackmail and extortion

The scammer claims to have personal information about the victim that could embarrass or harm them. This could include photos, emails, videos, and even websites they have visited. They typically threaten to share this information with the victim’s contacts or otherwise expose it to the public unless the victim makes an immediate cryptocurrency transfer to “buy” their privacy and avoid embarrassment. The US Federal Trade Commission advises potential victims not to send any money and to report these types of scams to the Federal Bureau of Investigation immediately .

Fake Cryptocurrency Exchanges

A scammer creates a fake cryptocurrency exchange and lures customers in by promising a very attractive exchange rate. Some even promise extra bitcoins. The customer makes their deposit and only later finds out that the site is fake. They lose their deposit and never hear from the scammer again. Check the legitimacy of crypto exchanges and find ones that have a good reputation and are genuine.

Pump and Dump Schemes

This is similar to a rug pull, but is more of an investment scam. Typically, a group of scammers will join forces to inflate a particular coin, luring people into investing in it. They will often use social media as a platform to create hype. Together, the scammers drive up the price of the asset, and then all of a sudden they all pull out their money. New investors are left with nothing, worthless, completely deflated investments.

Romance Scams

The scammer finds a victim and pretends to be romantically interested in them. They manipulate the target by pretending to be in love and may even talk about marriage. In reality, the entire relationship is a scam. The scammer uses fake personal information and photos to spin a web of lies that often lasts for months as they trick the target into developing romantic feelings for them. Once they are sure the target is hooked, they begin the money portion of the scam, which usually involves asking for cryptocurrency or investments so they can start a life together.

Cryptocurrency Distribution Scams

This scam is very common on social media, but can also be carried out via email. The scammer contacts the target, promising free cryptocurrency (or another prize, often money) if they follow the scammer’s instructions. Often, these scammers will pose as social media influencers or even celebrities in an attempt to gain trust so that they can more easily lure in unsuspecting victims. The victim clicks on the link and is taken to a scam site that requires “verification” to receive the prize. Verification involves a payment to prove the account is legitimate, and often contains malicious links that give the scammer access to the victim’s personal information, including their cryptocurrency.

Flash loan attack

Flash loans are loans that are issued and repaid in a very short time, usually within seconds or minutes. They do not require collateral or a credit check, making them easy for scammers to obtain. The purpose of flash loans in legitimate trading is to buy cryptocurrency tokens that are being sold at a low price on one platform and then immediately sold on another platform that offers a higher price. In legitimate flash loans, this is all done in a single transaction and the loan is repaid. However, the ease of obtaining a flash loan allows scammers to manipulate it and use it for their own purposes. Scammers create multiple buy and sell orders, making it appear that the asset is in high demand. Once the price rises, the scammers cancel the sales so that the price immediately drops. They then buy at a lower price on another platform and make a profit.

Man-in-the-Middle Attack

The scammer waits for the target to access their cryptocurrency account in a public place. Such public places are not so safe, so experts advise using a VPN when logging into a cryptocurrency account. Using public places, the scammer can steal the target’s sensitive information, such as account details, cryptocurrency wallet keys, and passwords. This can be done by intercepting Wi-Fi signals on networks that the target trusts.