Cryptocurrency Scam: How to Avoid This 7 Common Scammer’s Trick

There are two types of cryptocurrency Scam where investors lose their fortunes to scammers.

cryptocurrency scam

How do you avoid cryptocurrency scam? The easiest way is just to stay at home and don’t play with your hard-earned cash.

But if you’re determined to invest in the somewhat risky world of cryptocurrency, there are common scams you should be aware of, I will be talking about the Major ones in this post.

They are Two major Ways coin Investor Lose investment fast;

  1. Hackers Targeting the System
  2. Criminals Targeting  Investors Directly

continue reading as we unfold the tricks

Let hit the road and discuss the first one: When Hackers Target the System

Cryptocurrency Scam When Hacker target the System; This is when hackers attack the infrastructure underpinning these coin markets (ex: exchanges, digital wallets, mining companies, web host services, etc.).

Reuters estimates that 980,000 bitcoins have been stolen from cryptocurrency exchanges since 2011, the equivalent of $15 billion to $18 billion at current prices. Recent examples of this include the NiceHash hack in December, which lost $64 million in investors’ money; also, in November, Tether was hacked for $30 million; and someone exploited a software bug in Parity to freeze $160 million in investors’ accounts. And let’s not forget the massive Mt. Gox hack in 2014 — $460 million was lost as a result.

Second way… 

In this Type of Cryptocurrency Scam, criminals target investors directly. There are a variety of these online scams, which often use “social engineering” tactics.

But here are the common and primary  Cryptocurrency Scam to worry about:

  • Initial coin offering (ICO) fraud
  • Phone-porting
  • Fake wallets
  • Malware.
  • Pyramid and Ponzi Schemes
  • Shady Exchanges
  • ICO Ban
  • DAO (decentralized autonomous organization)

While there are not many investors can do to protect themselves against attacks on the cryptocurrency system, they can take measures to lower their own risk of falling for a targeted attack.

Top Cryptocurrency to Invest in 2018

Here is a breakdown of these four attacks and ways to reduce the threat:

1).Initial Coin Offering (ICO) fraud

An ICO is when a newly invented cryptocurrency is launched to investors. Needless to say, this is an unregulated and risky activity all by itself, but it is also plagued by scammers.

There are two ways ICO fraud happens. The first is when criminals create a fake ICO and steal any money that investors give them. This is what happened in December when the SEC shut down the PlexCoin ICO, which it alleges was a $15 million fraud.

The second type of ICO fraud is when hackers “spoof,” or impersonate, a legitimate ICO and trick investors into paying them instead of the real company. This happened recently with messaging giant Kik’s ICO, which goes to show it can affect even well-established companies. Typically, cybercriminals will create a fake website or social media account and use phishing emails to promote a phony “pre-sale” offer or other tricks. Chainalysis recently estimated that ICO spoofing has victimized 30,000 investors this year alone, to the tune of $225 million.

Security tip: Do sufficient research on an ICO before buying in. Check industry sites like CoinDesk to verify the legitimacy of a claimed ICO. Don’t fall for hard sell tactics or too-good-to-be-true offers, especially when received over email or social media messaging, as these are likely phishing attempts. See the SEC’s tips on ICO investments.


This type of cryptocurrency scam is called Cell phone identity theft, also known as “phone-porting,” is when criminals commandeer a person’s phone number by tricking the mobile provider into giving them control of the account. Once they have the phone number, they can reset the password to a digital wallet and drain the account. Since these cryptocurrency transactions can’t be reversed, the investor can lose everything. According to Federal Trade Commission statistics, phone-porting attacks, in general, rose by 256 percent between 2013 and 2016.

Security tip: Mobile providers usually recommend adding a unique PIN and verification question to the account to improve security. However, a better solution is to switch two-factor authentication from SMS to a third-party service like Google Authenticator.


2).Fake digital wallets

Cryptocurrency has to be stored somewhere, and investors often use virtual wallets. The problem is that fake wallets occasionally appear online or in mobile app stores, and they may steal investors’ savings. This happened recently with the bitcoin gold wallet scam, which reportedly stole $3 million. On Dec. 10, the popular service MyEtherWallet warned customers about a fake MyEtherWallet digital wallet app, which had risen to No. 3 in the iOS App Store’s finance category.

Security tip: Before selecting a digital wallet provider, do your homework. Only use services that have a solid track record. Another option is to use an offline hardware wallet.

3). Bitcoin-stealing malware

This is one of the most common cryptocurrency scam, It’s estimated that nearly one-third of all home computers are infected with some type of malware. Recently, a new category of malware has emerged that specializes in one activity — stealing bitcoins. It can do this in a few different ways, such as stealing log-in credentials or the wallet itself or getting in the middle of a transaction. Dell SecureWorks estimates this malware increased 11-fold between 2012 and 2014.

Security tip: Use a robust antivirus program and an inbound/outbound firewall to protect your computer. Use two-factor authentication and a password manager to protect the log-in.

4). Pyramid and Ponzi Schemes

In the spring of 2017, a Mumbai-based company called OneCoin was delivering a sales pitch to a room of investors. Indian financial enforcement officers raided the meeting, ultimately jailing 18 OneCoin representatives for operating a cryptocurrency Ponzi scheme. At the time of their arrest, OneCoin had already moved over $350 million through a payment processor.

Investors had been duped through a combination of enthusiastic upselling, lack of knowledge of the technology in front of them, and a lot of positive media coverage (of both the project and booming cryptocurrency prices).

A lot of people lost a lot of money. And we like to think we’re clever enough to spot a scam when it is front of us. But cryptocurrency is creating new scams, using jargon and technology most people have never heard of, let alone truly understand. Even grasping the basics of blockchain technology and smart contracts is difficult for the layman.

5). ICO Ban

ICOs have also made the (cryptocurrency) news after both China and South Korea took steps to ban them. The South Korean Financial Services Commission said that institutions and individuals conducting business relating to an ICO would face “stern penalties.”

This move comes after the Chinese government banned all ICOs, calling them “illegal fundraising.” China is also worried about the power cryptocurrency gives its citizens. Decentralized anonymous currency in the form of ICOs (and other altcoins) could easily “disrupt their social order.” China has previously banned Bitcoin and cryptocurrency related activity, each time causing a slump in global markets.

6). The DAO

When The DAO (a decentralized autonomous organization named for the acronym) completed their 2016 ICO, raising over $34 million, it was considered a success. That was until some users exploited a vulnerability in the DAO code, and siphoned one-third of The DAO’s funds to another account. To return the funds to the original account, the Ethereum community had to agree to a hard fork, tearing the cryptocurrency in half.

DAO is now delisted from major exchanges and is seen as a major factor in the (much needed) close scrutiny of the SEC in cryptocurrency ICOs.

7). Shady Exchanges

and other altcoins has seen a huge rise in cryptocurrency exchanges. They all want your attention and the transaction fees that come with handling your purchases.

However, there aren’t many completely trustworthy cryptocurrency exchanges. Popular exchanges have been known to completely disappear overnight, taking all the cryptocurrency with them. At other times, you’ll encounter extremely unhelpful customer service. Sent your Bitcoin to a Bitcoin Cash wallet? Bad luck (although this particular transaction issue can be fixed).

If you’re entirely new to cryptocurrency, you might not have heard of Mt. Gox. This was an early cryptocurrency exchange that at one point accounted for over 70 percent of all Bitcoin transactions worldwide. One morning, in February 2014, Mt. Gox suspended trading. It later emerged that 850,000 Bitcoins had been stolen (valued at $450 million at the time, over $3.5 billion as of this writing — yeah, you read that right!) over a period time. Some 200,000 were recovered and returned to the site and some users.


Cryptocurrency investors face a lot of risks, not the least of which is scamming. Since this market is largely unregulated and unprotected, it is up to individual investors to account for their own security. Follow the above tips, and also take additional measures, such as encrypting the internet connection with a VPN (virtual private network). It’s also not a bad idea to consider using a dedicated computer (i.e., it does nothing else but log in to your bitcoin account) to be safer when performing these transactions.

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Written by pajon

Hello Every one,
My Name is Paul Ajonye AKA “PAJON” Academically am an Industrial Physicist (A Die Hard Tech Lover) , I Have an undying love for wealth creation and success, most importantly solution driven with the infinite passion to see people grow their businesses online/offline this is Exactly how I found myself become a Pro-Business Development Strategist (Tech approach) I have proficiency in the following areas; Sales & Marketing strategy for small business, Lead creation, Digital Marketing and Hospitality solutions (with over Six years Proven Practical Experience) that works.

I went into blogging in a quest to solve problems, provide useful information and show my proficiency to the world at large.


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