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  • Writer's pictureKerati Piyarat

9 Types of Cryptocurrency Scams

Cryptocurrencies have gained immense popularity in recent years, attracting investors and enthusiasts worldwide. However, along with their rise, there has been a parallel surge in cryptocurrency scams, leaving unsuspecting individuals vulnerable to financial losses. Therefore, in this article, Nativ will explore eight types of cryptocurrency scams that have emerged with the hope that individuals including our followers can equip themselves with knowledge to identify and avoid potential pitfalls in the digital asset landscape.

There are typically two main categories of cryptocurrency scams:

1. Scams targeting access to digital wallets or authentication credentials: In this type of scam, fraudsters employ various tactics to obtain sensitive information that grants them access to a victim's digital wallet or other private details, such as security codes. In more severe cases, scammers may even attempt to gain access to physical hardware associated with the cryptocurrency.

2. Scams involving direct transfer of cryptocurrency to scammers: This category encompasses scams where individuals unknowingly transfer their cryptocurrency directly to scammers. These scams can occur through impersonation, fraudulent investment schemes, deceptive business opportunities, or other malicious methods employed by scammers.

Get to know 9 main Types of cryptocurrency scams
1. Social Engineering Scams

Social engineering scams involve the use of psychological manipulation and deceptive tactics to extract critical information associated with user accounts. These scams exploit individuals' trust by presenting themselves as trustworthy entities, such as government agencies, reputable businesses, tech support personnel, community members, colleagues, or even friends.

Scammers employ various strategies and may invest considerable time in establishing trust with their potential victims. Their ultimate goal is to deceive individuals into divulging important keys or transferring funds to the scammer's digital wallet. It is crucial to be cautious when any of these "trusted" entities request cryptocurrency as payment, as it is often an indication of a fraudulent scheme.

2. Romance Scams

Scammers frequently exploit dating websites to create the illusion of genuine, long-term relationships with unsuspecting individuals. Once trust has been established, the scammers pivot the conversations towards lucrative cryptocurrency opportunities, eventually leading to the transfer of either cryptocurrency coins or account authentication credentials. The Federal Trade Commission (FTC) has reported that around 20% of the funds lost in romance scams were in the form of cryptocurrency.

3. Imposter and Giveaway Scams

Scammers also attempt to impersonate celebrities, businesspeople, or influential figures in the cryptocurrency world. To grab the attention of potential victims, these scammers often entice individuals with promises of matching or multiplying the cryptocurrency sent to them, commonly known as giveaway scams. By crafting persuasive messages that resemble existing social media accounts, scammers create an illusion of authenticity and exploit a sense of urgency. These "once-in-a-lifetime" opportunities can prompt people to transfer funds in the hopes of an immediate return quickly.

Furthermore, many cryptocurrency owners receive communications from impostors claiming to be from cryptocurrency exchange support and security teams.

4.Phishing Scams

Phishing scams in the cryptocurrency industry primarily focus on obtaining information related to online wallets, with a specific interest in crypto wallet private keys. These private keys serve as the means to access one's cryptocurrency holdings. Scammers employ a familiar tactic seen in many scams, which involves sending emails containing links that direct individuals to fraudulent websites designed to resemble legitimate platforms. Once on these deceptive websites, victims are prompted to enter their private keys. By acquiring this sensitive information, hackers gain the ability to steal the victim's cryptocurrency.

Fast fact: Phishing scams are prevalent and rank among the most commonly employed attacks targeting consumers.

5.Blackmail and Extortion Scams

Blackmail and extortion scams are prevalent social engineering tactics employed by scammers. In these scams, individuals receive blackmail emails in which the fraudsters make false claims of possessing records of the victim's visits to adult or illicit websites. The scammers threaten to expose this information unless the victim complies with their demands, which typically involve sharing private keys or transferring cryptocurrency to the scammer's account. It is important to recognize that these cases constitute criminal extortion attempts, and victims should promptly report them to appropriate law enforcement agencies.

6.Investment or Business Opportunity Scams

“If something sounds too good to be true, it probably is". This is particularly when it comes to investing, including investments in cryptocurrencies. Numerous profit-seeking individuals are drawn to deceptive websites that promise guaranteed returns or enticing setups where investors are required to invest significant sums of money in exchange for even larger guaranteed returns.

Regrettably, these misleading guarantees often lead to financial devastation when individuals attempt to withdraw their funds but discover they are unable to do so.

7.New Crypto-Based Opportunities: ICOs and NFTs

The emergence of crypto-based investments, such as initial coin offerings (ICOs) and non-fungible tokens (NFTs), has provided scammers with additional avenues to exploit unsuspecting individuals. It is important to recognize that, although crypto-based investments or business opportunities may appear highly lucrative, they do not always align with reality.

For instance, some scammers create counterfeit websites for ICOs and prompt users to deposit cryptocurrency into compromised wallets. In other cases, the fault may lie with the ICO itself, as founders might distribute unregulated tokens or deceive investors through false advertising about their products.

8.Rug Pulls

A rug pull refers to a deceptive practice wherein the members of a project raise capital or cryptocurrency to support a venture and then abruptly remove all liquidity and vanish. As a result, the project is abandoned, and investors lose all the contributions they made.

9.Cloud Mining Scams

Certain platforms target retail buyers and investors by offering them the opportunity to invest upfront capital in exchange for a continuous stream of mining power and rewards. However, these platforms often misrepresent their actual ownership of the promised hash rate and fail to deliver the expected rewards after receiving the initial payment. It is important to note that while cloud mining itself is not inherently fraudulent, conducting thorough due diligence on the platform is essential before making any investments.

Additionally, according to Australian Securities & Investments Commission’s investigators ( ASIC), the top–10 signs of a likely crypto scam are:

1. You receive an offer out of the blue

2. You see a celebrity advertisement that is actually a fake

3. A romantic partner you only know online asks for money in crypto

4. You get pressured into transferring crypto from your current exchange to another website

5. You’re asked to pay for a financial service with crypto

6. The app you’re using or directed to isn’t listed on the Google Play Store or Apple Store

7. You need to pay more to access your money

8. You are ‘guaranteed’ returns, or free money

9. Strange tokens appear in your digital wallet

10. The provider withholds investment earnings ‘for tax purposes

Now you are equipped with the essential knowledge needed to identify scam projects. However, at first glance, Nativ seems to fall into some of these categories—such as airdropping free crypto, but all the campaign and incentives Nativ has gifted to participants to date is for promotional purpose only, in order to onboard as many users as possible to our cutting-edge savings wallet app Try it now and you’ll see how simple it is to ‘save’ in digital assets. Nativ is here to stay!

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