Top 5 Popular Crypto Scams You Should be Aware Of (2023)

Staying informed is protecting your portfolio, especially inside the cryptocurrency world. And we’re not just talking about the market swings but also about the aces up the sleeves of numerous scammers. A crypto scam occurs when someone (physically or online) deceives you to steal your funds. Or, better said, for you to send them your hard-earned money.

According to the analytics firm Chainalysis, around $5.9 billion were stolen this way worldwide in 2022. That’s a sharp decrease from the year prior (2021), but only because of the market conditions. In a bullish market, we’re meant to face more successful crypto scams. However, in any case, if you don’t know the latest tactics of scammers, you’re more likely to fall victim to them.

Let’s explore the most popular crypto scams around lately.

Impersonation and Phishing

In both cases, the scammers will pretend to be someone (or something) else. In impersonation scams, the fraudster will contact you (via phone or online) and spin a tale about unpaid fees, taxes, or legal obligations. They could also claim that you've won a prize but need to send them money first or insist that a company requires a specific amount transferred for a particular purpose. If you fall for their lies, they'll then direct you to transfer cryptocurrencies into their own wallet.

For example, they could pretend they’re from the national tax authority or a direct client of your boss. However, just because they found your phone, email address, or chat, it doesn’t necessarily mean they’re legit. In these cases, always ask first the original source they’re impersonating.

Phishing is also a kind of online impersonation,* but its target is massive instead of individual. Scammers can create entire websites mimicking the ones of a bank, a cryptocurrency exchange, a trading platform, a wallet, or any other legitimate service to deceive anyone who would access them and type their private data and credentials. This way, they can steal passwords and even private seeds to empty the associated crypto wallet or exchange account.

Another common tactic of phishing is sending malicious emails, pretending to be a real company informing their clients about some kind of technical issue. This usually ends up with them asking for credentials to “solve” that issue or a link to a fake website. Then, it’s important to know that legitimate crypto companies will never ask you for your credentials. Regarding fake websites, you should always check if the URL in the browser hasn’t changed from your previous visits (even by just one character).

Fake Investments

This one is already classic: who wouldn’t want to invest $250 and get 300% in monthly returns? Sadly, that’s usually a fake promise. There’s already a massive network of scam sites promising just that and claiming they use automated trading and secondary investments for it. They don’t have a fixed name, though, opting instead to frequently alter their titles and web domains.

The victims often find enticing ads or fake articles on social media and fraudulent websites featuring supposed celebrity endorsements. After providing personal information, victims are contacted by scammers who employ social engineering techniques to encourage deposits. Upon transferring funds, users are shown fabricated dashboards displaying unreal profits. Only when attempting to withdraw do they realize they've been deceived, but it’s too late.

Platforms like Smart Invest Online, Bitcoin Evolution, TrueNorthBit, and similar ones operate in the exact same way, and they even have the same website design. On the other hand, according to Chainalysis, the HyperVerse (HyperFund) crypto investment platform took the crown last year, with over $1.3 billion in ill-gotten gains. They promised between 0.5% and 1% in passive daily rewards to their members —and, of course, they just stole people’s money.

The lesson here is clear: if the promised returns are unbelievably high and the way to get them isn’t very clear, then it’s most likely a scam. Always look for reviews before investing. And remember, reviews might be fake, too, so check several of them.

Romance or ‘Pig-butchering’ Scams

Yes, you would be the “pig” here. Likely the cruelest crypto scam so far, it involves fraudsters pretending to develop a romantic or deep friendship bond with their victims, all to manipulate their emotions and persuade them into sending cryptocurrencies or participating in a fake investment platform. If you meet someone “special” online and they’re suddenly asking for money with any excuse or recommending suspicious websites, that’s it.

This type of scam can take months, so the part in which you’re really scammed will take some time. Besides being mean to your heart, according to Chainalysis, “Romance scams took an average victim deposit of almost $16,000, nearly triple the next-closest category.” As such, this is the most expensive type of scam for the victim.

Unfortunately, ‘pig-butchering’ frauds are growing. Only last year in the United States, around 72,806 people lost over $1 billion to this evil tactic. Never send money to unknown people on the Internet!

Giveaway Scams

We can agree that giveaways are quite common in the crypto world. Obyte had several legitimate giveaways to distribute its native currency, indeed. But not everyone is playing nice here, and there are also fake giveaways to steal cryptos. Luckily, the way to recognize them is because they often ask for the recipients to send them some money first, as a token of identity, a list, a donation, or whatever excuse —or no excuse at all.

It’s also common for authors of these fake giveaways to pose as famous people on social media (Elon Musk is a favorite). They promise to “double” all the sent payments, but they’ll never give back a thing.

Another version of this scam also involves the scammer impersonating famous people or crypto companies. But, instead of asking for money directly, they offer a giveaway for the people who share, follow, like, comment, or worse, fill out a form with personal data. Then, the fraudster could contact them directly and ask for some money to “pay transaction fees” before receiving the hypothetical prize or even try to get their credentials with any excuse. Once they have the payment and/or personal data, they just disappear.

If a giveaway isn’t “giving away” but asking (money or data), then it’s likely a scam. Always check the official social media handles of your favorite accounts to verify their authenticity. \

Fake Crypto Jobs

Maybe not that common, but equally harmful for job hunters. In this scam, the victim stumbles upon a job opening at a so-called cryptocurrency company. These deceitful job offers can even be found on popular platforms like Indeed, which operates in many countries. After going through seemingly legitimate interviews, the victim is eventually hired and lured in with the promise of a generous salary and benefits, a flexible schedule, and simple tasks.

At that point, the supposed company starts asking for money. Either to share with the employee their first tasks, as a soon-to-be-paid deposit for clients, as a payment for training or with other excuses. Once the employee transfers their own cryptocurrencies, the scammers could disappear immediately.

A variation of that scam could be even larger if you’re already working for a legitimate crypto firm. In 2022, an engineer from Sky Mavis (Axie Infinity creators) received an attractive job offer with a higher salary and benefits, and they even went through several interviews before the supposed company sent them a written offer. The engineer didn’t know that the document contained spyware, for which Sky Mavis was hacked for over $600 million.

Finally, there’s a much more obscure iteration of this fraud. Some false job ads are describing a wide range of opportunities with attractive benefits, but always in a foreign country. The victim is supposed to allow relocation, but once in the new country, they’re held against their will and forced to commit international crypto investment fraud schemes, as reported by the US FBI.

It’s important to investigate thoroughly the firm you’re planning to join before losing much more than your time or money.

A Warning for Obyte Users

As crypto users, the Obyte community isn’t exempt from these malicious schemes either. For instance, we must consider that some fake investments could be promoted here as well. The nature of the Obyte platform itself, which enables users to create and issue their own tokens, opens up the possibility of fraudulent tokens being created and promoted.

Scammers can take advantage of the decentralized nature of Obyte by creating seemingly legitimate tokens and enticing users to invest in them. These fraudulent tokens may promise high returns or exclusive benefits, but in reality, they are designed to deceive users and steal their funds. Likewise, scammers might impersonate reputable projects or individuals within the Obyte community, convincing users to disclose their private keys or transfer funds to fraudulent addresses.

Additionally, users should be vigilant against online phishing attempts and avoid sharing their private keys or sensitive information with anyone.  Obyte is a decentralized network, and there is nobody who would protect users or compensate for their losses. Users are fully autonomous; they are free to do whatever they like but also bear all the risks themselves. By staying informed, practicing due diligence, and being mindful of potential scams, Obyte users can help protect themselves and the wider community from falling victim to fraudulent activities.

*Featured Vector Image by Freepik*