It is estimated that around $2 billion was lost by investors to scams, rug pulls, and hacks in 2023. Although the technology is becoming more secure and stable, and many users are more aware of the tricks used to steal assets, there are still ways for thieves to extract your crypto if you aren’t careful.
Experts at Kryptocasinos.com have compiled a list of the most common scams that are being used in 2024 and how you can spot and avoid them. The data was collected from the Department of Financial Protection and Innovation (DFPI) ‘Crypto Scam Tracker,’ which has up-to-date scams as they are reported, including descriptions of the scams and the names of the fraudulent sites.
Most common crypto scams
| Scam | % of reports that included the scam |
| Fraudulent trading platform | 87% |
| Pig butchering | 58% |
| Imposter | 27% |
| Romance | 11% |
- Fraudulent Trading Platforms
Of all the reported scams by the DFPI, 87% included an element of utilizing a fraudulent site or trading platform. These scams involve a fraudulent website or application that convinces victims to deposit funds to the platform under the guise of providing access to a unique investment opportunity or being a trusted site. The fraudulent platforms appear legitimate, even going as far as replicating price movements and producing artificial gains. These platforms are often advertised online and can look identical at first glance.
How to avoid these scams:
To avoid these scams, investors should only invest money in trusted exchanges or move crypto to reliable wallets. By sticking to these, you can ensure your money will be safe and protected. If there is uncertainty as to whether the website is legitimate, double-check the URL to ensure it’s the official website, there are plenty of sites online that can check URLs for you and alert you if they are fraudulent, also if a website’s URL starts with HTTP instead of HTTPS this could also indicate the site is not secure.
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By GlobalDataIf it is an app, double-check the developer and app information. This can be done on your device’s app store, reliable apps will have developer names and further information, including the number of downloads, which can be another good indicator of the legitimacy of a platform. You can also follow links from a platform’s official site. If a stranger is pushing you to sign up and deposit funds into an unknown platform it should be a red flag, and you should continue with extreme caution.
- Pig Butchering Scam
A pig butchering scam is a long-term scam and investment fraud, in which the victim is gradually tricked into contributing more and more to a fraudulent cryptocurrency scheme. It’s called a “pig butchering” scheme because the perpetrators will “fatten up” a victim to gain their trust before “butchering” them.
They are mainly executed through social media platforms, attempting to get the victim to transfer funds into a fraudulent platform. The fraudulent platform usually poses as genuine and offers artificial profits to keep the victim using the platform and perhaps make more deposits. The victim, however, is never allowed to take their money out of the website and could be required to send further money through several justifications (such as service charges or IRS taxes) before any money is taken out; this just adds to the already possibly large financial losses. This scam appeared in 58% of reports to the DFPI.
How to avoid these scams:
This is another scam that can be avoided by remaining cautious online; criminals may also contact victims by WhatsApp and text. The best way to stay safe is to ignore and block messages from strangers completely. Some scams now even try to impersonate family and friends, so it’s even more important to double-check that you know who you are talking to. Scammers will never want to meet and may not want to talk over the phone if they are pretending to be someone else, as this would reveal their real identity or they are not who they say they are, and so if they are being overly avoidant, this is a clear red flag.
- Imposter Scams
An Imposter Scam occurs when a scammer poses as a reputable company, government representative, or well-known individual to obtain access to a user’s systems and personal data in order to profit financially. The scammer may also utilize other scam techniques and try to get victims to deposit money into fraudulent platforms.
Many scammers will use social media to find their victims, starting conversations on platforms such as Facebook, Instagram and LinkedIn, and some will attempt to move conversations to WhatsApp. This scam has been mentioned in 27% of all reports to the DFPI. An example of this, reported by the DFPI, was a scam where people were impersonating BlackRock, a legitimate investment firm, on Facebook and WhatsApp, to solicit victims to trade crypto options, promising high daily returns. However, the links were then fraudulent, meaning any money deposited would have been stolen.
How to avoid these scams:
If you are contacted by strangers on social media, it’s important to remain cautious; any message attempting to convince you to invest in crypto should be considered a red flag. If someone asks to move the conversation to WhatsApp, this can also be a big indicator that someone may be trying to scam you, so it’s best to block and report the account. Companies such as BlackRock mentioned above will never reach out and personally ask you to invest; these can also be checked by ensuring links to these websites are legitimate and not fraudulent.
- Romance Scam
Romance scams are another very popular type of scam that utilize the popularity of social media and dating platforms to adopt a fake online profile to gain a victim’s affection and trust and then use the illusion of a romantic or close relationship to manipulate and/or steal from the victim. The DFPI crypto scam tracker reported a case that happened to a California resident who reported they met “Mark” on the dating app Bumble. Mark asked the victim to shift the conversation to WhatsApp. They continued to communicate, and at some point, Mark told the victim he could teach them cryptocurrency trading. Mark convinced the victim to deposit money into a fraudulent platform where the money eventually would be stolen resulting in the loss of over $50,000. This scam appeared in 11% of reports.
How to avoid these scams:
Much like imposter scams, any strangers who are attempting to entice you to invest money should be approached with caution. Online accounts often use stolen photos and videos to give the illusion they are real people, and it’s often hard to spot these accounts. Images can be back searched on Google to see if they have been taken from somewhere else; for example, the report about ‘Mark’ stated that after research, it was found the scammer was using photos of a popular fitness personality.
A spokesperson from Kryptocasinos.com commented: “In the world of cryptocurrencies, scams are a real threat, so it’s important to stay safe. Always do your research and make sure you’re using trusted platforms and wallets.
“Never share your private keys or personal information with anyone. Be wary of offers that seem too good to be true, and double-check everything before you invest. By staying informed and being careful, you can protect yourself from scams and safely enjoy the benefits of cryptocurrencies.”
