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Cryptocurrency offers incredible opportunities. However, scammers lurk around every corner, waiting to take advantage of unsuspecting investors. Whether you are new to crypto or have some experience, it’s crucial to understand common scams. In this guide, you will learn about crypto scams, how they work, and how to protect yourself.
1. Pump and Dump Schemes
Pump and dump scams manipulate the price of a cryptocurrency. Scammers buy large amounts of a cheap token and spread misleading information to increase demand. When prices skyrocket, they sell their holdings, leaving investors with worthless assets.
How to Spot a Pump and Dump
- Unrealistic promises – Scammers claim a token will “go to the moon.”
- Sudden price spikes – A sharp increase with no real news.
- Social media hype – Fake influencers promote the token aggressively.
- Low trading volume – The token has little activity before the surge.
How to Avoid It
- Research projects before investing.
- Check for real use cases and partnerships.
- Avoid buying tokens based on social media hype.
2. Rug Pull Scams
A rug pull happens when developers create a cryptocurrency project, raise funds, and then disappear. These scams leave investors with worthless tokens.
Common Rug Pull Signs
- Anonymous developers – No verifiable team information.
- No audit reports – The smart contract is not reviewed by professionals.
- Locked liquidity issues – Developers control the liquidity and can remove it.
How to Stay Safe
- Only invest in projects with transparent teams.
- Check if liquidity is locked for a set period.
- Look for third-party audits from reputable firms.
3. Fake Crypto Wallets and Exchanges
Scammers create fake wallets or exchanges that look legitimate. Once users deposit funds, the scammers steal them.
How to Identify Fake Wallets and Exchanges
- Unverified apps – They are not listed on official app stores.
- No customer support – No response to inquiries.
- Too-good-to-be-true returns – Promises of guaranteed profits.
Prevention Tips
- Use well-known wallets like MetaMask or Ledger.
- Verify official website domains before downloading wallets.
- Read online reviews from trusted sources.
Check safe wallets here: Ledger
4. Phishing Attacks
Phishing scams trick users into revealing private keys or login credentials. Scammers send fake emails or messages pretending to be legitimate services.
Warning Signs
- Urgent requests – “Your account will be locked unless you act now.”
- Fake website links – URLs that look slightly different from the original.
- Suspicious attachments – Malware disguised as important files.
How to Avoid Phishing Scams
- Never share private keys or seed phrases.
- Double-check website URLs before logging in.
- Enable two-factor authentication (2FA) on all accounts.
5. Fake Giveaways and Airdrops
Scammers promise free crypto in exchange for personal information or wallet access. These scams often impersonate celebrities or companies.
Common Red Flags
- “Send us crypto first” – Legitimate giveaways never require payments.
- Fake social media accounts – Scammers create similar usernames.
- No official website link – No verifiable sources backing the giveaway.
How to Protect Yourself
- Only trust giveaways from official sources.
- Verify social media accounts before engaging.
- Never share your private keys or seed phrases.
6. Approval Drainers
Scammers use malicious smart contracts that, once approved, drain all assets from a wallet.
How They Work
- A user connects their wallet to a fake project.
- The smart contract requests approval to spend assets.
- Once approved, scammers empty the wallet.
How to Stay Safe
- Revoke unnecessary token approvals using tools like Revoke.cash.
- Always review permissions before approving transactions.
- Avoid connecting wallets to unknown platforms.
7. Fake Customer Support Scams
Scammers pose as customer support agents from exchanges or wallets. They contact users via email, social media, or chat forums.
How to Identify Fake Support
- Unsolicited messages – Real support teams do not reach out first.
- Requests for login details – Legitimate support never asks for passwords.
- Fake social media handles – Scammers use slight variations of official names.
How to Avoid It
- Only contact support through official websites.
- Verify social media accounts before engaging.
- Never share passwords or private keys.
More on support scams: Binance Academy
Conclusion
Crypto scams are everywhere, but you can protect yourself by staying informed. Always do your own research, verify sources, and be skeptical of offers that seem too good to be true.
By learning how scams work, you can invest and trade in crypto safely. Share this guide with friends to help them avoid scams, too!
