Cryptocurrency scam: how to avoid and protect your money (crypto)

by CryptoCubes 9 марта 2023
The topic of cryptocurrency attracts the attention of a huge number of people. Many see it as a quick way…

The topic of cryptocurrency attracts the attention of a huge number of people. Many see it as a quick way to make big money without putting in any effort, as this “earnings” seems like the easiest way. Scammers take advantage of this by taking hundreds, or even millions, of dollars from naive newcomers by luring them into SCAM projects. Today, we will look at what a scam is, talk about ways to protect yourself, and examine the largest scam schemes in the crypto market.

What is a Scam, Examples, and Ways to Protect Yourself

Scams are various schemes that fraudsters use to obtain money, data, or other assets. In the cryptocurrency sphere, this refers to ways of attracting users to invest in fake projects. There are numerous types of scams in the crypto world, and we will examine the most common ones.

Classic Ponzi schemes. Scammers assure new users that investing in their project will bring huge profits. In reality, these profits depend solely on attracting new participants to the pyramid.

Fake ICO/IDO. Fraudsters create fake projects and conduct ICO/IDO to collect money for further project development. As mentioned earlier, after collecting funds, scammers simply disappear without fulfilling their obligations.

Phishing. This type of scam is one of the most common. Scammers create clones of popular websites and distribute malicious links and software to steal user data. In the cryptocurrency sphere, scammers hunt for private keys and mnemonic phrases from wallets.

Hacks are not as common as other types of fraud, but the amounts of stolen funds can be so huge that news about them spreads around the world. For example, on March 29, 2022, a hacker hacked The Ronin bridge, stealing 173,600 ETH and 25.5 million USDC. In terms of US dollars, the number of stolen funds was approximately $610 million.

Next, we will review a few prominent Ponzi schemes in the cryptocurrency sphere:

Bitconnect was launched in 2016 and promised users around 40% profit from assets locked up for 299 days. A project with such high returns couldn’t last long and was shut down in January 2018. Another pyramid scheme where many investors lost their money.

OneCoin – a project launched in 2014 with the promise of building “the next Bitcoin.” But in reality, it turned out to be another Ponzi scheme and the project’s founders were arrested in 2018.

PlusToken was created in 2018 and followed in the footsteps of Bitconnect. Promising high returns for investors, the team used a pyramid scheme to attract new investors. In June 2019, PlusToken’s founders fled with over $3 billion, leaving depositors with nothing.

These are just a small fraction of the existing crypto scams, and even experienced users can find it difficult to recognize fraud. However, there are basic rules that need to be followed to protect oneself from most scammers.

Ways to Protect Yourself from Cryptocurrency Scams

As we mentioned earlier, avoiding cryptocurrency scams can be a difficult task. However, by following these rules, you can reduce your chances of falling victim to fraudulent schemes.

Before investing in any project, conduct your own research: who is behind the project, what technology are they using, who are their partners, and what advantages the project offers compared to its competitors. It’s also worth studying reviews and opinions from reputable influencers and large investors. This way, you can form an overall opinion of the project and decide whether to invest or avoid it altogether.

Superprofits are a red flag. If someone promises you quick and easy profits, it is a clear sign of a scam. No project can guarantee profits, let alone promise to return your investment within a few months. If something sounds too good to be true, it is a lie in 99 out of 100 cases.

Always pay attention to the above aspects and do not trust unverified sources of information. This will not only protect you from phishing attacks but also help you avoid investing in unprofitable and/or scam projects.


Scams are a serious problem in the cryptocurrency industry. By studying existing risks and evaluating them soberly, you can protect yourself from losing money and keep your personal data safe. Remember: your safety depends only on you.

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