Countless profit-seeking speculators turn to misleading websites offering “guaranteed returns” or other setups for which investors must invest large sums of money for even larger “guaranteed” returns. Unfortunately, these bogus guarantees often lead to financial disaster when individuals find they can’t get their money back. Scammers often use dating websites to make unsuspecting individuals believe they are in a real relationship, whether a new or long-term one. So if you see a tweet (or a text, email, or other message on social media) that tells you to pay with Bitcoin, you know that’s a scam.
For example, crypto thieves will say they’re from the government or law enforcement in order to gain some credibility. From there, they’ll convince you your accounts or assets are frozen as part of an investigation, and that you can pay them in crypto to resolve the issue. This scam can play out in a number of ways, but it typically takes place when someone contacts you with a business opportunity with the promise of helping you grow rich. In some cases, scammers get you to fork over your crypto by telling you they can provide you with exceptional returns, even doubling or tripling your crypto assets overnight.
There are cases in which an open-source crypto project might not have named developers, which is typical for open-source projects. Still, you can view most coding, comments, and discussions on GitHub or GitLab. Some projects use forums and applications, like Discord or Slack, for discussion. If you can’t find any of these elements, and the white paper is rife with errors, stand down—it’s likely a scam. Always look for red flags such as too-good-to-be-true prices, lack of details or high-pressure sales tactics.
Another variant of phishing, social media scams typically involve an account advertising big gains, a survey, or something similar, with a link. Clicking the link can lead to malware being installed on one’s device. They’ve been around as long as social media has existed, and while all seek different ends, many recent social media scams want your digital currency. The most notable Ponzi scheme in crypto is Bitconnect, a high-yield investment program disguised as an open-source currency.
The attacker then cancels orders after prices increase, which will cause the price to fall immediately. The attacker can then make a profit by buying at a lower price on a different platform. Scammers are always finding new ways to steal your money using cryptocurrency. If an authority or loved one needs a payment from you urgently, they will find a way to reach you—and they likely won’t request that you pay in cryptocurrency.
You might not realize you were part of a scam unless you try to return the item or use a warranty. According to the Federal Trade Commission’s (FTC) 2023 Consumer Sentinel Network Data Book, about 20% of people targeted by an imposter scam in 2023 lost money, and the median loss was $800. The FTC also reported that government imposter scams in particular led to a massive increase in losses during the first three months of 2024, with median losses of $14,740. Scammers almost always have the same goal—to get your personal information or money.
Paying with your credit card can also help you limit potential losses, as you can initiate a chargeback if you don’t receive a product or service. The FTC reports that the percentage of imposter scams that start with a phone call has decreased from 67% in 2020 to 32% in 2023. Text messages and email are becoming a preferred method of first contact. The potential to create an image, video or voice of someone can make many existing scams more believable, and it opens up new opportunities for scammers. In December 2024, the FBI posted a public service announcement listing some of the ways that criminals use generative AI to trick victims. Brenden Rearick is a Financial News Writer for InvestorPlace’s Today’s Market team.
If you like investing in largely unregulated currency markets noted for appealing to criminals, then cryptocurrency is right up your alley. Almost all crypto scams can be rooted out by simply taking a closer look. If it walks like a scam, and it talks like a scam, it’s best to stay away, because it’s a scam. This list isn’t all-encompassing; as cryptocurrencies change shape to fit consumers’ needs, so too will scams shapeshift to lure in new victims. Crypto is a booming industry, and a large part of that is because it is not regulated.
