Stay alert to crypto scams with our guide to 2024’s top threats, including phishing, malware, Ponzi schemes, and fake wallets. Learn how to protect your assets today!
With the increasing adoption and user base of cryptocurrencies and crypto markets also comes a growing number of scammers and frauds. There are many ways in which conmen and hackers can exploit your trust, data, and wallets. To help you prevent any threat to your privacy and finances, we have looked into the most widely used crypto scam tactics of 2024.
Before diving into the meat of the matter, it is important to note that prevention is the key to your personal and digital currency security especially those on Android devices due to the surge in malware attacks even through the Play Store. Whether you are trading daily or just keeping some crypto as an investment, take steps to prevent any possible scam. Using 2-factor authentication is crucial, and having a secure crypto wallet Android app you can trust will keep your keys safe. Keep your tech up to date, and keep yourself educated and well informed.
1. Rug Pulls and Deceptive Tech
Unfortunately, rug pulls have become somewhat of a deception standard in the crypto world. These scam projects very often come in the form of different memecoins, like Froggy Coin earlier this year. Lately, the viral attraction Hawk Tuah Girl has been accused of a cash grab after her own memecoin crashed in one day. The best way to protect yourself and your wallet from potential scams like these is to get to know the developers and their history and check if there is a liquidity lock or a sell limit. High yields are also a common red flag.
The pump and dump method is similarly very popular for frauds. This October, the game studio Fracture Labs sued their market maker Jump Trading for fraud. Jump is suspected to have used a pump-and-dump scheme to drastically devalue their DIO gaming crypto token. The good thing is, these frauds are easily recognized through copy-pasted templates hyping them up on social media, fast and exponential growth, and usually anonymous founders.
Technology can be utilized for high-level scams as well. This September there was an attack that utilized malicious packages to extract private keys from wallet services. The researchers found that this was a PyPI malware posing as a crypto wallet and stole users’ private keys.
These kinds of hi-tech scams can be very dangerous if you are keeping large amounts of cryptocurrency but can be prevented if you utilize basic cybersecurity methods and common sense with a healthy dose of suspicion.
2. Phishing and Social Engineering
Using AI to construct a just plausibly acceptable deception used for social media is another method scammers add to their arsenals. In January 2024, you might have seen ads for XRP airdrops on X or YouTube. It was very quickly confirmed by Ripple Labs’ CEO that the whole thing was a scam using deepfake videos.
The scammers were promising generous XRP drops if users would first send their own XRP “for verification”, going as far as to ask people to connect their wallets so they could empty them. The lesson here is never to trust any offers that ask you to send currency to gain more of it.
Crypto World is by no means immune to Ponzi schemes either. This year the SEC accused brothers Jonathan and Tanner Adam of organizing one such operation that ended with them misappropriating $53.9 million out of the $61.5 million they raised from 80 investors. The brothers claimed they can secure high returns for investments using their crypto trading bot which scanned for smart contracts. In reality, such a bot never existed, and the brothers used new investments to pay earlier investors, thus creating an illusion that there is money being earned.
Similarly, scammers will work hard on social engineering scams, posing as job recruiters or customer support. There has been an increase in such phishing scams lately, as Binance saw around $46 million stolen through fake support this year. Job hunters are similarly targeted, usually through upfront fees from their “employers” that start small but get bigger as time goes on. Vigilant checks and verifications that you are talking with real people representing real companies are the key to safety with scams like these.
3. Ponzi and Pyramid Schemes
These scams promise ridiculously high returns with little effort. You’re encouraged to “invest” in a project and recruit others to do the same. The money paid to early participants usually comes from new investors, not actual profits. Once recruitment slows, the scheme collapses, and the scammers vanish with your money. If you hear words like “guaranteed returns” or “recruit your friends,” run the other way.
4. Fake Initial Coin Offerings (ICOs)
Scammers often create flashy websites and whitepapers to hype up fake crypto projects, luring investors with the promise of a “groundbreaking” cryptocurrency. People invest, and once enough funds are collected, the scammers disappear without a trace. Always research the team, verify project details, and be careful of projects that offer little more than some trendy words.
5. Pump-and-Dump Schemes
Here, scammers spread hype about obscure tokens, artificially driving up the price. Once the value spikes, they sell off their holdings, leaving unsuspecting investors with worthless tokens. If you see a sudden price surge accompanied by over-the-top promotions on social media or group chats, be sceptical, it’s probably too good to be true.
6. Impersonation of Celebrities or Influencers
Fake accounts of celebrities or influencers often pop up with crypto “giveaways” that ask you to send tokens with a promise to double your returns. Spoiler alert: you won’t get anything back. Always check for verified accounts, and remember, Elon Musk isn’t doubling Bitcoin just because he said so on a fake Twitter post.
7. Fake Wallet Apps
Scammers create apps that look like legitimate crypto wallets. Once you deposit your tokens or enter your private keys, they steal your funds. Always download wallet apps directly from official websites or trusted app stores, and double-check reviews to ensure it’s legitimate.
8. Malware Attacks
Malicious software can be hidden in downloads or fake crypto tools, quietly stealing your wallet information or mining cryptocurrency using your devices. If your computer starts slowing down for no reason, malware could be the culprit. Avoid downloading random files or apps from untrusted sources, your crypto is worth the extra caution.
9. Fake Airdrops
Who doesn’t love free crypto? Scammers exploit this by promoting fake “airdrops” that ask for your private keys or require you to send a small payment to “verify” your wallet. Legitimate airdrops don’t ask for private keys or upfront payments, if they do, it’s a scam.
10. Cryptojacking
With cryptojacking, scammers secretly use your computer or smartphone to mine cryptocurrency without your knowledge. You might notice slower performance, higher energy bills, or your device overheating. Keep antivirus software up to date, and avoid sketchy websites or downloads.
11. Romance Scams
Scammers take advantage of people emotionally by building fake relationships online. Once trust is gained, they’ll convince you to invest in a “lucrative” crypto opportunity or send funds for a made-up emergency. If a new online “love interest” suddenly talks about crypto investments, stay alert, it might not be love.
10. Exchange and Account Hacks
Unsecured exchanges and accounts are prime targets for hackers. If an exchange lacks strong security protocols, funds can be stolen overnight. Protect your investments by choosing reputable exchanges, enabling two-factor authentication (2FA), and never reusing passwords.
12. Fake Customer Support Scams
Scammers impersonate support staff from well-known exchanges or wallets, claiming they need access to your account to “fix” an issue. Real support teams never ask for your passwords or private keys. Always contact customer support directly through verified channels.
13. “Exit Scams” by Exchanges
Some shady exchanges lure users with attractive offers, only to shut down unexpectedly and disappear with all deposited funds. Always use established, reputable platforms with strong reviews. If an exchange is offering deals that sound too good to pass up, it might be planning to exit, along with your money.
14. Scam Tokens
Scammers create tokens that look promising but serve no real purpose. They manipulate the market to attract buyers and then sell off their holdings, tanking the price. Research the team behind the token, its use case, and whether it has been audited, don’t buy based on hype alone.
Simple Yet Vital Tips to Protect Yourself:
- Always research before investing.
- Use reputable platforms and wallets.
- Never share private keys or passwords.
- If it sounds too good to be true, it probably is.