Top 5 Popular Crypto Scams You Should Be Aware of (2023)

Staying informed protects your portfolio, especially within the cryptocurrency world. And we are not only talking about the market swing, but also about the scores up the sleeves of numerous scammers. A crypto scam occurs when someone (physically or online) tricks you into stealing your funds. Or, better said, for you to send them your hard earned money.

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

Let’s explore the most popular crypto scams of late.

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 tell you a story about unpaid fees, taxes or legal obligations. They may also claim that you have won a prize but have to send them money first or insist that a company requires a specific amount to be transferred for a specific purpose. If you fall for their lies, they will then instruct you to transfer cryptocurrencies to their own wallet.

For example, they may pretend to be from the national tax authority or a direct client of your boss. But just because they found your phone, email or chat doesn’t necessarily mean they’re legit. In these cases, always first ask the original source they are imitating.

Phishing is also a type of online impersonation*, but its targeting is massive instead of individual. Scammers can create entire websites impersonating that of a bank, a cryptocurrency exchange, a trading platform, a wallet, or any other legitimate service in order to trick anyone who would gain access to it and enter 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 phishing tactic is to send malicious emails pretending to be a real company informing their customers of some sort of technical issue. This usually ends with them asking for credentials to “fix” that issue or a link to a fake site. Then it is important to know that legitimate crypto companies will never ask you for your credentials. When it comes to fake websites, always check that the URL in the browser hasn’t changed from your previous visits (even by just one character).

Fake investments

This one is already a classic: who doesn’t want to invest $250 and get 300% in monthly returns? Unfortunately, this is usually a false promise. There is already a massive network of scam sites that promise just that and claim to use automated trading and secondary investments for it. However, they do not have a fixed name, instead choosing to change their titles and web domains frequently.

The victims often find enticing advertisements or fake articles on social media and fraudulent websites with supposed celebrity endorsements. After providing personal information, victims are contacted by scammers who use social engineering techniques to encourage deposits. When transferring funds, users are shown fabricated dashboards displaying unreal profits. Only when they try to withdraw do they realize that they have been tricked, but it is too late.

Platforms like Smart Invest Online, Bitcoin Evolution, TrueNorthBit and similar work in exactly the 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 more than $1.3 billion in ill-gotten gains. They promised their members between 0.5% and 1% in passive daily rewards — and of course they just stole people’s money.

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

Romance or ‘Pork Slaughter’ Scams

Yes, you would be the “pig” here. Probably the most brutal crypto scam to date, it involves fraudsters pretending to develop a romantic or deep friendship with their victims, all in order to manipulate their emotions and persuade them to send cryptocurrencies or share in a fake investment platform to take. If you meet someone “special” online and they suddenly ask for money with any excuse or recommend suspicious websites, that’s it.

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

Unfortunately, ‘pork slaughter’ fraud is growing. Last year in the United States alone, approximately 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 gifts are quite common in the crypto world. Indeed, Obyte had several legal gifts to distribute its native currency. But not everyone plays nice here, and there are also fake gifts to steal cryptos. Fortunately, the way to recognize them is because they often ask the recipients to send them some money first, as a token of identity, a list, a donation, or whatever excuse—or no excuse .

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

Another version of this scam also involves the scammer impersonating famous people or crypto companies. But instead of directly asking for money, they offer a giveaway for the people who share, follow, like, comment, or worse, fill out a form with personal data. Then the scammer can 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 probably a scam. Always check the official social media handles of your favorite accounts to verify their authenticity. \

Fake Crypto Jobs

Maybe not as common, but equally harmful to job hunters. In this scam, the victim comes across a job opening at a so-called cryptocurrency company. These fraudulent job offers can even be found on popular platforms such as Indeed, which operate in many countries. After going through seemingly legitimate interviews, the victim is finally 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 their first tasks with the employee, as a deposit to be paid soon for clients, as a payment for training or with other excuses. Once the employee transfers their own cryptocurrencies, the scammers can disappear instantly.

A variation of that scam could be even bigger if you already work 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 the document contained spyware, for which Sky Mavis was hacked for more than $600 million.

Finally, there is a much more obscure iteration of this scam. Some fake job ads describe 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 are held against their will and forced to commit international crypto-investment fraud schemes, as reported by the US FBI.

It is important to thoroughly research the firm you plan to join before you lose much more than your time or money.

A warning for Obyte users

As crypto users, the Obyte community is not exempt from these malicious schemes either. For example, we have to take into account that some fake investments can also be promoted here. The nature of the Obyte platform itself, which allows 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 tricking users into investing 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. Similarly, scammers can impersonate trusted projects or individuals within the Obyte community, convincing users to reveal 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 no one to protect users or compensate for their losses. Users are fully autonomous; they are free to do what they want, but also bear all the risks themselves. By staying informed, exercising due diligence, and being alert to potential scams, Obyte users can help protect themselves and the wider community from falling victim to fraudulent activity.

*Featured vector image by Freepik*