The decentralized nature of cryptocurrency and speed of irreversible transactions make it an attractive vehicle for criminals, while also creating challenges to recover stolen funds.

If you decide to take on the considerable risks associated with investing in cryptocurrencies, you should take every step possible to safeguard yourself from scammers. Part of this process is familiarizing yourself with some of the most common scams involving crypto.

1. Business opportunity scam

A scammer may contact you with a fake business opportunity or crypto investment that they claim will guarantee significant returns with little to no risk or effort on your part. They will often act as if the matter is urgent in an attempt to pressure you into providing payment. But once you complete your transaction, the offer never comes to fruition, and you may not see your money again.

Remember, if it sounds too good to be true, it probably is.

2. Fake cryptocurrency websites

Cybercriminals often create fake versions of legitimate cryptocurrency websites and apps to help them scam victims. The fake website may have a similar design to an official website, but the domain name will be slightly different from the legitimate one. The scam website may even include fake testimonials and trading records to make it seem trustworthy.

Using a strategy called phishing, scammers will send an email or text with a link to their fake site, hoping to trick people into providing personal information, such as login credentials, that would give them access to the victim’s cryptocurrency wallet. Once someone logs in or pays money to these websites, they might find it impossible to recover their lost funds. Always verify the validity of any site before entering sensitive information into it.

3. Fake celebrity endorsements

Some scammers will post pictures of a celebrity or influencer, falsely claiming that the celebrity made a lot of money using their financial services app or program. These organizations might contact you through social media, sending you links or QR codes. Their hope is that the false celebrity endorsement will be enough to convince you that the scheme is real.

If you click the link, bogus financial services companies will pressure you to open a cryptocurrency account by downloading their app. In some cases, this app may enable remote access to your device, allowing fraudsters access to your funds.

4. Ponzi schemes

While Ponzi schemes have been around for decades, they’ve found new life in the crypto era. In a Ponzi scheme, scammers attempt to recruit you as an investor in what appears to be a legitimate cryptocurrency portfolio. The scammers will continue to recruit new investors, securing more money and—thanks to their accrual of funds—the appearance of legitimacy.

Instead of investing in a cryptocurrency portfolio as promised, they use the funds to pay out the initial investors and pocket the rest. Since early investors might receive consistent high returns, they can unknowingly legitimize the Ponzi scheme by endorsing it. Scammers will falsify documents and fabricate account statements to keep the scheme going and recruit more investors.   

5. Charitable donation scams

It’s possible for individuals or corporations to donate cryptocurrency investments to legitimate charitable organizations. This means that it’s also possible for scammers to pose as those organizations.

During this scheme, scammers will set up a fake website that poses as a legitimate charity or, in some cases, a completely made up one. These websites focus on one objective: taking advantage of a person’s charitable inclinations to steal their money.

6. Rug pull scams

Also known as pump-and-dump schemes, these scams involve a fraudster who promotes a crypto product to boost its price. They then take the investors’ money and quietly shut down the project, leaving investors with worthless crypto coins.

7. Blackmail scams

Scammers will sometimes try to blackmail an individual by saying they have compromising photos or videos of the person and will request payment with cryptocurrency to avoid them sending the compromising images to others.

When this happens, the Federal Trade Commission (FTC) advises that you ignore the scammer’s threats and report the crime to the FBI .

8. Romance scams

Romance scams exploit victims’ hopes and trust. Scammers often use dating apps and websites to make unsuspecting individuals, commonly seniors, believe they are in a real relationship. Once the victim’s feelings are involved, the scammer will try to get them to invest in a fake crypto project, convincing them to transfer coins or share their account credentials.