How to Avoid Common Cryptocurrency Scams

The world of cryptocurrency is new and exciting. Unfortunately, where there is opportunity, there are others looking to take advantage of it in some way. Thanks to the nature of how crypto transactions are processed, they are a prime target for thieves, and unfortunately, many new investors have fallen prey to their tricks.

In this article, we’re going to go over some of the most common cryptocurrency scams and tell you how to avoid falling prey to them. Keep in mind that this is not an extensive list and that you should keep your eyes open. If something looks too good to be true, then it probably is.

Domain replacement scams

This is a very common way that scammers will attempt to gain access to web wallets or exchange accounts. How it works is that the scammer will create a look-alike domain in order to trick you into thinking that you are on the official page for the exchange or web wallet. Usually, they do this by adding or removing a character to the domain name that they have registered, usually something very subtle that is hard to notice.

On most exchanges or web wallets, when you go to login you’ll be given a warning. The domain will ask you to verify that the address is correct, and at the top corner of the address bar, you should see a little lock verifying the authenticity of the domain.

This is a security certificate, and you should make sure it says something that references the name of the company. For example, Cryptopia’s says Cryptopia Limited (NZ) to verify that the domain belongs to their LLC.

If you want to avoid falling prey to this scam, be sure to type the address of the website into your address bar, or visit from a safe bookmark instead of googling it. Be extra careful clicking advertisement links, as these are almost always scam sites trying to steal your information.

If you believe that you have entered your information into one of these phishing sites, then go to the real site and change your password immediately. If your email address password is the same, then change that as well just in case. You may also want to contact support to let them know of the scam URL, so they can work to get it removed.

Email phishing scams

People looking to steal your account information this way will start by sending you a very official looking email. They’ll do their best to mimic everything that a real correspondence would contain, and the urgency of their message often leads people to jump without thinking.

You’ll likely be provided with a link to a copycat website, and you’ll be instructed to enter your login information. Once they have this, your accounts will be emptied, and the funds transferred to the scam artist’s own accounts.

This is nothing new, and it’s been going on for years with traditional banks, PayPal accounts, credit cards, and any other way that people pay for things. However, people are still falling for it, and these scammers are very sneaky.

Whenever you get an email, be sure to analyze it carefully, and remember that no legitimate companies will ask you for sensitive information like Pin numbers, private keys, or passwords in this way. If you get a suspicious email, then contact customer support through an official channel to ask about it or report it.

Twitter scams

On almost every single Twitter page there will be someone who is posting about giving away cryptocurrency in a comment. All of these are scams. While there are some crypto projects that do have airdrops and giveaways, they will not ask you to send them coins or tokens first!

Avoid these schemes at all costs, and if possible, do your favorite project a favor and report these fake accounts so they can be taken care of. Any giveaways by a project will be reported from the official account, and if it’s not then you can bet that it’s not real.

Fraudulent ICOs

ICOs have left a bad taste in the mouths of many cryptocurrency investors as of late. Due to the nature of these offerings, they can be run by literally anyone that wants to start collecting money from people.

While there are tons of legitimate projects that get off the ground from crowdfunding, there are just as many that are useless cash grabs. Most of these are not registered, and there’s no way to verify their “company” other than doing your own research.

A potential red flag could be not listing the members of their team, and if you can’t seem to link their supposed developers and CEO to any other projects or credentials, then it would be in your best interest to run far away. Likewise, if they are offering a lot of empty promises without anything to really back it up, this can also be a sign of a scam coin offering that’s out to steal your money.

Fake cryptocurrency exchanges

It’s surprisingly easy to start your own cryptocurrency exchange, and not all of these people have good intentions. Some of them will even operate normally for a short time before exiting with all of the investor’s assets. Using an unknown exchange can be very risky, and you should be cautious with how much money you keep or send to these entities.

This includes quick swap exchanges which mimic Shapeshift or Changelly as well. Before using a new exchange it might be a good idea to look around for some reviews or other opinions. If you really want to use it, and you’re still not sure, send only small amounts of money at a time.

It would also be in your best interest to never keep money on exchanges of any kind, but on lesser-known ones especially. Even if their intentions are not malicious, these overnight operations can easily go under, taking your investment with them. If you plan to buy or sell here, then do so, but immediately transfer your assets to a safe wallet on your own device after the fact. This will help to keep your money safe.

Fake cryptocurrency wallets

There’s a surprising number of fake wallets out there too. Users should be especially careful about this when looking for mobile wallets, as there are many unofficial ones that are not legitimate. While Google does attempt to take these applications down, by the time they do it’s likely too late for many investors who trusted these wallets.

It would be in your best interest to go to your coin or token’s website to see what the downloads for their official wallets or trusted partners are. If you’re not sure if a wallet is safe, then ask in the coin’s Reddit sub, as someone there will likely be able to help, or at least point you in the direction of a more safe wallet. Avoid any applications that don’t give you the private key.

Pump and dump schemes

This one may be a little bit less obvious than the other entries, and that’s because these people will not outright steal your money. Instead, they will use you to further their own investments. A pump and dump group uses their assets to artificially inflate the price of a coin or token that typically has a small market cap.

They will often use social media accounts such as Twitter or Telegram chats to try to trap cryptocurrency newbies looking for quick profits. Once these inexperienced individuals join, they are told to buy a particular coin at a certain time, insured that they will profit from this pump.

Unfortunately, the people behind this scam have already purchased their own coins or tokens for dirt cheap, and by the time these new investors start buying in the pump is already happening.

Once the calamity ensues, the orchestrators of the scheme dump their coins and collect their profits, leaving those newbies they recruited holding the bag. Since they always choose a low volume and practically useless asset, those investors will likely never recover their investment. Avoid anyone who is promising you quick profits, they are trying to use you.


In cryptocurrency, we must be extra diligent in order to protect our funds. There are sharks in the water, and they are out to get your hard earned money in any way that they can. New investors can protect themselves by being sure that they are utilizing safe coin storage habits or exchange usage and by avoiding any get rich quick schemes. Instead, invest long term in reliable projects that have real teams behind them.

While it can be tempting to give in to promises of quick money, these are almost always ways to steal your funds that will only put you farther from your goals. Whenever you’re considering using a new exchange, wallet or making a new investment, take a moment to consider all of the facts before acting. Be careful out there.