Crypto Scam: How Not to Fall Victim

Imagine checking your cryptocurrency wallet, only to see it drained of its contents in mere seconds. This is the harsh reality faced by countless individuals who fall victim to crypto scams every day. As cryptocurrency gains popularity, scammers become more ingenious in their attempts to exploit newcomers. In this article, we’ll explore the main types of crypto fraud and share strategies to help you protect your digital assets.

To stay safe, stick to trusted platforms. 1tab is listed on BestChange, a leading site for verified crypto exchanges. In the past three years, we’ve completed over 40,000 deals and helped thousands of clients. We offer low fees, personal service, and easy crypto exchanges in Tbilisi and beyond.

Fraud on Social Networks and Cryptocurrency Exchanges

In 2024, scammers stole over $3 billion from the global crypto market, an amount that reflects the annual budget of many national banks, highlighting the significant scale of financial risk involved. With almost half of these scams happening on exchanges, even using a popular platform does not mean you are completely safe. Exchanges offer tools to help keep your transactions secure, but you are still responsible for protecting your own money. Scammers also use social networks a lot. In 2023, more than 70% of all crypto pyramid schemes found new victims through social media.

Scammers use different methods of deception, including offering overly favorable exchange conditions and using fake documents or stolen bank accounts. One of 1tab’s clients, before turning to us, fell victim to such fraud: he was conducting a P2P transaction on an exchange, and his counterparty sent him a screenshot confirming a bank transfer, showing all the payment details, the amount, and even a bank stamp. The receipt looked very convincing, so the user sent his cryptocurrency to the counterparty. But when he checked his bank account, there was no money. The screenshot turned out to be fake, and the scammer disappeared along with the crypto.

Let’s take a look at the most common schemes used by crypto fraudsters and figure out how to avoid falling into their traps.

“Triangular”

This is one of the most common crypto scams. It happens not just on exchanges, but anywhere digital assets are traded. Scammers act very convincingly, pretending to be a middleman and tricking both the buyer and the seller.

How it works:

1. The scammer simultaneously opens a deal with a crypto buyer willing to transfer fiat, and another deal for the same amount with a crypto seller.

2. The fraudster takes the seller’s payment details and gives them to the buyer.

3. The buyer sends the money directly to the seller, with whom the scammer has the second deal.

4. The seller, seeing the transfer arrive and unaware of the fraud, releases the cryptocurrency to the scammer’s wallet.

5. As a result, the buyer is left without money and without cryptocurrency.

Sometimes this scheme involves a third party — a buyer of goods. The scammer posts a fake sales ad, gives the potential buyer the card number of a trader from a P2P platform, and asks them to transfer the payment. The crypto seller, having received money from the victim, sends the cryptocurrency to the scammer. Ultimately, the goods buyer is left without money and the product, while the crypto seller unknowingly becomes part of the fraudulent scheme.

How to Avoid the “Triangle” in Transfers:

• Before making a transfer, always verify that the account details truly belong to the person you have agreed with.

• Pay attention to any mismatched information, suspicious conditions, or offers that seem too good to be true.

• For transactions, choose P2P platforms with a solid reputation and user protection systems. Check the counterparty’s rating, reviews, and trade history. To verify a platform’s reliability, read reviews on aggregator sites like BestChange or Trustpilot, which provide insights into user experiences.

• Check for any regulatory warnings from financial authorities or consumer protection agencies that might highlight any past issues with the platform. It’s also a good idea to look into forums and online communities for firsthand accounts and discussions about the platform or user you intend to trade with.

• Do not hesitate to ask questions. If you have doubts, request additional proof.

In crypto trading, certain legal strategies, such as triangular arbitrage, enable traders to generate profits from price discrepancies between three assets. By connecting trades in a loop, they capitalize on these price gaps without violating any rules.

But even in such schemes, there are risks. Scammers can forge receipts, screenshots, and other proof of transfer. To reduce risk, request a video of the transfer from the counterparty and work only with verified users.

Phishing

Another common method of stealing cryptocurrency, according to analytics firm Chainalysis, is phishing. Scammers create fake websites that look almost identical to well-known exchanges. The differences may be very minor: a small typo in the URL, a slightly altered logo, or minor design changes. The goal of phishing is to trick you into entering your login credentials and password on a fake site, allowing them to steal your funds.

Important Sign to Check: always look for the padlock icon at the start of the browser’s address bar. If it is missing, do not enter any information, as this indicates the website is not secure.

Phishing can also appear on social networks, messengers, and email. Scammers may send phishing links via private messages, post comments, or contact you in messengers while pretending to be your friends or company representatives. Be cautious when entering an exchange’s URL and never click links from suspicious emails or messages.

How to protect yourself from phishing:

• Do not follow links from emails or messenger messages. Always log in to the exchange through its official website.

• Carefully and attentively type the exchange’s URL. Check that the connection is secure (https).

• Turn on two-step verification to protect your account.

• If you notice suspicious activity on an exchange, report it to customer support.

Extortion

Scammers gain access to your personal data and threaten to release compromising information unless you transfer a certain amount of cryptocurrency to them. They obtain this data by hacking into your computer or accounts, using phishing attacks, or finding your photos or videos that are publicly available.

For example, in 2022, a group of hackers breached NVIDIA’s servers and stole confidential information, including employees’ personal data. The hackers demanded a ransom in Bitcoin in exchange for not disclosing the information. In 2023, cyber extortion resulted in over $3.94 billion in damages in the U.S. Criminals increasingly use cryptocurrency for extortion because it offers anonymity and facilitates fast transactions.

Blackmail

This is an even more serious type of extortion: scammers threaten not only to release compromising information but also to cause physical or financial harm if you don’t pay the ransom in crypto.

In 2021, a group of fraudsters blackmailed the executives of Colonial Pipeline by gaining computer access to the company’s largest pipeline and threatening to disrupt supplies. As a result, Colonial Pipeline had to pay $4.4 million.

How to protect yourself:

• do not store compromising materials on your devices or cloud storage;

• use strong passwords and enable two-factor authentication;

• do not pay the ransom — contact the police instead.

Social Engineering and Romance Scams in Phishing

Social engineering means tricking people into giving away private information or doing things for the scammer. Instead of breaking into accounts, scammers use clever tricks to fool people and get what they want.

Fraudsters use psychological tactics to gain trust and manipulate their targets. They may pretend to be friends, colleagues, or even relatives, study your profiles to gather information about your interests and weaknesses, and then use that knowledge to achieve their goals. The scammer’s aim is to lower your vigilance and get you to transfer crypto or click on a phishing link.

“Bank Offer” and “Trust Management” Scams

Scammers pretending to be from a bank or investment company may offer you “special” chances to invest in cryptocurrency or let them manage your money. They might contact you by phone, messaging apps, social networks, or send emails that look official. Typically, these scammers employ tactics to gain your trust. They might already know your name, phone number, or even some financial details. They often say it’s a “limited-time offer” or your “last chance” to invest in a “great project.”

“Guaranteed Income” Scheme

On social networks and messaging apps, you may encounter numerous “investment projects” and “trading bots” that allegedly guarantee high returns without risk.

Scammers create websites or social media groups that promise huge profits, such as 10% per day or 100% per month. To capture people’s interest, they might post fake reviews, hold contests and giveaways, or even feature celebrities in their ads. If you invest in one of these “projects,” the scammers either run away with your money or pay out “profits” using money from new investors, which is a classic Ponzi scheme.

“Investments” in Real Assets

Fraudsters create the appearance of a successful and reliable business, offering investments in “promising” projects tied to real assets, such as real estate, precious metals, or manufacturing. For example, the REcoin Group Foundation attracted investors by promising to invest their funds in cryptocurrency backed by diamonds. In reality, no investments in precious companies were made; the scammers used the funds and crypto for personal purposes.

Scammers might rent offices, make websites, advertise in the news, show fancy presentations, “documents,” or “licenses,” and promise big profits. Their goal is to get you to invest in their “business.” In reality, most of these projects are fake and do not exist.

ICO of New Tokens

An ICO (Initial Coin Offering) is a primary coin offering used to attract investment in new cryptocurrency projects. Scammers often exploit ICOs to deceive people: they create fake projects and promise quick profits from purchasing new tokens. For example, the PlexCoin ICO, which promised investors monthly returns of over 1300%, was shut down by regulators as fraudulent; however, the perpetrators still managed to raise over $8.5 million.

Fraudsters may publish a convincing “white paper”—a document that explains the cryptocurrency project and helps investors judge if it is a good idea. Scammers promise big profits from buying new tokens that are supposed to be part of a “groundbreaking project.” In reality, there is no real technology or business behind it. Once the ICO ends and the scammers get the money, they disappear, and the tokens are worthless.

“Pump and Dump”

This is a trick where scammers make the price of a little-known cryptocurrency go up by spreading false excitement on social media, forums, and Telegram groups. When the price is high, they sell their coins, which makes the value crash and leaves other people with worthless tokens. This occurred in scams like the Squid Game Token, where the price skyrocketed to $2,800 and then dropped to almost nothing in minutes.

Pyramids

Scammers create “investment clubs,” “affiliate programs,” or other projects that promise high returns to participants if they recruit new investors.

The people running a pyramid scheme promise big profits, but there are no real investments. Money from new people is used to pay “profits” to those who joined earlier. The pyramid only works as long as more new people join than leave. When new investors stop joining, the project falls apart, and most people lose their money.

“Insider Information” Trading Scheme

Scammers offer “special tips” or claim to have “professional traders.” They post fake screenshots showing large profits, fake reviews from “happy clients,” and even hold free online classes to attract people to their “platform.”

In reality, these “insiders” do not have any secret information. They just guess about the market or use old data. In the end, you pay them for useless advice and lose money on bad trades.

According to Chainalysis, losses from “insider information” scams in 2023 exceeded $1 billion, reflecting a broader decline in illicit activity.

Fake Finance Courses

There are many online courses on financial literacy and crypto trading, but not all are designed to educate; many are intended to scam trusting users. For example, in the U.S., the scam project “IM Academy” sold financial literacy courses for $400 per month. The organizers promised to teach students to “achieve financial freedom.” In reality, the courses simply promoted risky investment strategies.

Scammers make websites, special pages, or Facebook groups to promote their “unique” courses. They promise to teach you the “secrets” of making money with cryptocurrency, offer a “special method,” or give you “personal help.” They might use fake reviews, lie about their skills, and even promise a “money-back guarantee.” In reality, these courses are either useless or full of false information. At best, you waste your money; at worst, you lose it by following the bad advice of these “gurus.” Many of these “experts” have no real financial education or experience.

Exchange Rate Scam Targeting Relocators

Moving to another country is always hard and stressful. Scammers take advantage of this by offering people very good cryptocurrency-to-local-currency exchange rates. They might make a fake exchange website, advertise on social media and messaging apps, and even contact people who have just moved. By offering rates significantly better than those of banks or official exchanges, they might claim to have “no fees” or “special contacts.”

To gain the victim’s trust, they often employ social engineering tactics: they show sympathy for the challenges of relocation, offer “help” with other financial matters, or even provide “guarantees” of a safe transaction. However, as soon as you transfer your crypto, they disappear with your money.

If you want to exchange crypto in a new country, it’s better to use an offline exchange, as this allows you to visit their office, verify the license, and monitor all the steps of the exchange process in real-time. 1tab facilitates the exchange of fiat to crypto and crypto to fiat in over 40 countries, including Georgia, Russia, the UAE, and others. The process is clear, and you get cash in our office or our partner’s office within 5 minutes. Contact our manager to book a free consultation and find a location that suits your needs.

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Fake Job Offers

On social media, you may encounter enticing job ads promising high salaries, “flexible hours,” work-from-home options, and other attractive conditions. Scammers often post these fake vacancies on LinkedIn and Telegram.

When someone replies to these job offers, the scammers ask for payment for “training,” “access to client lists,” or other “needed materials.” Once you send the crypto, the scammers disappear.

“Celebrity Endorsements”

Scammers claim that celebrities are investing in their projects or recommending them to their fans. In reality, the stars have no connection to these projects; fraudsters simply use their names to attract victims.

Criminals may create fake celebrity accounts on social media, post counterfeit ads with their images, or even use deepfake technology to produce videos in which celebrities supposedly endorse the project. For example, in 2021, scammers used Elon Musk’s name to promote a fake cryptocurrency project. They made a fake website featuring photos of Musk and claims that he had invested in the project. Many people fell for the scam and lost their money.

Scammers often promise investors high returns, “exclusive opportunities,” or “partnerships with celebrities.” The goal is to convince you to invest in their fraudulent project by exploiting your trust in famous people. Most commonly, fraudsters use the names of successful entrepreneurs or celebrities—such as Elon Musk, Bill Gates, Jeff Bezos, and Kim Kardashian, among others.

How to Spot a Scammer

• Promises of unrealistic profit. Be cautious if someone offers “guaranteed” returns, a “secret strategy,” or “risk-free investments.” In the investment world, there are no easy profits, and any promises of quick wealth should raise suspicion.

• Aggressive marketing. Scammers often use aggressive advertising and spam to draw attention to their projects. They may promise “discounts for early investors” or “bonuses for referrals.” Don’t fall for these tricks—think carefully and avoid rushing into projects that raise doubts.

• Pressure and manipulation. Fraudsters skillfully use psychological tactics to prompt you to make a decision as quickly as possible. They might talk about a “limited-time offer,” a “last chance,” or “missed profit.”

• Lack of clear and honest project information. Scammers may give little or false information about their projects. They might not share important documents, hide details about the team, or register their companies in faraway countries. If you can’t find enough information about a project, it’s safer not to invest.

• Negative reviews and warnings. Before investing in any project, research online for information. Pay attention to other users’ reviews and check whether regulators or law enforcement have issued any warnings about potential fraud.

• Requests for personal information or wallet access. Never share your private keys, seed phrases, or other sensitive information with anyone. Scammers may invent excuses to gain access to your funds, such as offering “wallet recovery assistance” or “participation in an exclusive promotion.”

• Grammatical errors and unprofessional design. Scammers often create websites and messages with grammatical mistakes and unprofessional design. This can be a sign that the project was hastily made—intended to deceive users.

• Suspicious links and attachments. Do not click on links or open attachments in emails or messages from unknown people. They may lead to phishing sites.

• Missing or poor project documents. Every project should have a document that explains how the cryptocurrency works. If the document is unclear, incomplete, or hard to find, consider it a warning sign.

• Lack of information, negative, or fake positive reviews on exchanges. Pay attention to the information about an exchange: if the site lacks a name, address, or contact details—or if they look suspicious—it’s safer not to take the risk. Remember, an attractive exchange rate can be a lure. Scammers attract clients with excellent terms, then either disappear with their money or charge hidden fees. Before using an exchange, check online reviews to ensure you’re making an informed decision. Look at the exchange’s rating on aggregator sites like BestChange. If the exchange has many negative reviews or a low rating, it’s best to choose an alternative service.

1tab has been operating in the cryptocurrency exchange market since 2022, and during this time, we have established ourselves as a trustworthy partner. Our clients leave positive reviews about our platform, and high ratings on Google confirm the reliability and quality of our work. Choose 1tab — we guarantee secure and favorable cryptocurrency exchange conditions in over 40 countries worldwide.

What to do if you become a victim of cryptocurrency fraud

It is essential to note that most cryptocurrency transactions do not permit reversals. If you have transferred crypto to scammers, you will find it nearly impossible to recover it. Therefore, the most important thing is to be extremely careful and vigilant before making any cryptocurrency transactions.

If you do encounter fraud, follow these steps in order of urgency to minimize damage:

• Secure your accounts. If scammers gained access to your exchange or wallet accounts, immediately change your passwords and enable two-factor authentication. This stops further unauthorized access and protects your remaining assets.

• Preserve all evidence. Take screenshots of your correspondence with the scammers, save all emails and messages. Record the wallet addresses to which you sent funds and the transaction IDs. You may find this evidence helpful in the future.

• Report to law enforcement. File a report with the police regarding the fraud, including all relevant information such as transaction IDs, screenshots of correspondence, wallet addresses involved, and any other evidence collected. This ensures a formal investigation can proceed. Contact the exchange or service support. If the fraud occurred on an exchange or crypto service, reach out to their support team and report the incident. Provide them with transaction details and any evidence of the fraud. They may block the scammer’s account and assist with the investigation.

• Consult a lawyer. A lawyer specializing in cryptocurrency cases can help protect your rights and assess the chances of recovering stolen funds.

How to Protect Your Crypto Wallet and Accounts

Protecting your crypto wallet and exchange accounts is a crucial part of safeguarding your digital assets and minimizing risks:

• Choose strong passwords. Your password should be at least 12 characters long and include uppercase and lowercase letters, numbers, and special symbols. Do not reuse passwords across different accounts. Change your passwords regularly. Use a password manager to generate and securely store strong passwords, simplifying the process of following best practices.

• Enable two-step verification (2FA) wherever possible. This means you use a code from a text message, an app like Google Authenticator or Authy, or a special device to keep your accounts safe. Even if someone gets your password, they cannot get into your account without this extra step.

• Select reliable wallets from reputable developers. Research the developers, read user reviews, and pay attention to the wallet’s reputation in the crypto community. For beginners, consider using well-known and user-friendly wallets such as MetaMask, Trust Wallet, or Coinbase Wallet. These wallets are widely recognized for their ease of use and security features.

• Keep your wallet software updated. Updates often contain security patches that fix vulnerabilities.

• Store your seed phrase safely. You can use a seed phrase — a set of words — to recover access to your wallet. Never store it on a computer, phone, or cloud service. It’s best to write it down on paper and keep it in a secure location.

• Use hardware wallets for large amounts. These are physical devices that keep your private keys separate from your computer or phone. They are safer than software wallets because hackers and viruses cannot reach them.

• Use a VPN on public Wi-Fi. This protects your data and prevents scammers from intercepting it.

• Be cautious when using public computers. Someone may install malware on them that can steal your information.

• Install a reliable antivirus and firewall. Antivirus software protects your device from viruses and malware, while a firewall blocks unauthorized network access.

• Regularly back up your crypto wallet. This ensures you can restore access to your funds if you lose or damage your device.

FAQ: Crypto Scam and Protection

1. What is a crypto scam?

   A crypto scam happens when criminals trick people into sending cryptocurrency or sharing private data.

2. How do scammers target users?

   Scammers use fake websites, phishing links, or too-good-to-be-true offers to attract victims.

3. How can I protect my crypto assets?

   You protect your assets by using only trusted platforms, checking website addresses, and avoiding suspicious offers.

4. Why choose 1tab for crypto exchange?

   1tab works transparently, offers low fees, and provides personalized service to clients in 40+ countries.

5. How many clients already use 1tab?

   Over the past three years, more than 40,000 deals have been processed through our platform, with over 6,000 clients trusting our service.

6. Where can I find 1tab among trusted exchanges?

   You can find 1tab on BestChange, the largest aggregator of verified crypto platforms.