Scam is a term widely used in the cryptocurrency community to refer to fraudulent schemes aimed at deceiving users and stealing their funds. In the context of the rapid development of the crypto market, where traditional regulatory mechanisms are often absent or underdeveloped, the number of fraudulent projects is rapidly growing. It is worth understanding what a scam is in crypto, the main types of scam, how to recognize them and effective protection measures.
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Types of cryptocurrency scams
Fake ICOs and IDOs
One of the most popular scams is fake Initial Coin Offerings (ICO) and Initial Decentralized Offerings (IDO). In such cases, scammers create an attractive website, publish a White Paper, and promise huge profits to attract investors. After collecting funds, the project disappears, and investors are left with nothing.
How to recognize:
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Lack of transparency, anonymous developers.
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Unrealistic promises of high returns.
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Lack of a working product or technology.
Pyramids and Ponzi schemes
A classic scheme adapted to the cryptocurrency market. In such projects, payments to early participants are made at the expense of investments from new investors. As soon as the influx of new money stops, the project collapses.
Examples: OneCoin, Bitconnect.
How to recognize:
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Guaranteed high returns without risk.
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Availability of a referral program with a multi-layered payment structure.
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Lack of real product or service.
Phishing and fraudulent sites
Phishing attacks in cryptocurrency often involve fake exchanges, wallets, and services. Fraudsters create copies of well-known platforms and lure users to steal their personal data and private keys.
How to recognize:
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Fake URL (for example, instead of Binance.com – Blnance.com).
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Requests to enter a seed phrase or private key.
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Intrusive emails and messages on social networks asking you to follow a link.
Rug Pull
This type of scam is especially common in the DeFi (decentralized finance) space. Developers create a new token and decentralized exchange, inflate its value through marketing, and then suddenly sell all the assets and disappear.
Examples: Squid Game Token (SQUID), where developers walked away with millions of dollars.
How to recognize:
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The developers do not reveal their identities.
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Lack of information on liquidity and control mechanisms.
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The project does not undergo independent audits.
Social Engineering and Social Media Fraud
Scammers often pose as well-known crypto investors, exchanges, or projects, offering token airdrops, sweepstakes, and other schemes that require sending cryptocurrency.
How to recognize:
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Request to send cryptocurrency in exchange for a bigger win.
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Fake celebrity accounts (Elon Musk, Vitalik Buterin, etc.).
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The conditions are too good to be true.
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How to protect yourself from a scam
To protect yourself and your finances, you need to understand exactly what a cryptocurrency scam is and how to protect yourself from it.
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Check the command and documentation
Real projects always have transparent information about the team, partners and roadmap. -
Analyze smart contracts
Before investing, check whether the project has been audited by independent companies (CertiK, Hacken, Quantstamp). -
Don't trust promises of high returns
There are no guarantees in cryptocurrency. If a project promises a fixed return without risk, that's a red flag. -
Use official sources
Visit project websites only via official links, check domain names and avoid suspicious Telegram groups. -
Don't share your private keys
Never, under any circumstances, share your seed phrase, private key or passwords. -
Check information in independent sources
Read forums, reviews and follow news on CoinMarketCap, CoinGecko and specialized crypto media.
Cryptocurrency scams are a serious threat faced by both new and experienced investors. It is important to understand the main fraud schemes and know how to protect your assets. The development of the crypto market leads to the emergence of new technologies, but scammers do not stand still. Be careful, check projects and trust only proven sources.
