The rise of crypto scams and how to avoid being fooled

Everyone seems to be talking about crypto.

It is marketed as a fast, modern and secure way to move money. Bitcoin has been around long enough that many people feel they can trust it, and almost everyone knows someone who claims to be making impressive returns from trading coins or tokens.

That fear of missing out drives people toward the latest coin launch that promises to go from almost zero to life changing value. Whenever there is a gold rush, criminals are close behind. Crypto is no different.

How crypto scams typically work

Many scams focus on Initial Coin Offerings. An ICO is the crypto world’s version of an Initial Public Offering, but it often happens much earlier in the life of the project. Investors are encouraged to get in at the ground floor before a huge price rise.

The problem is that in many cases there is no real product, no real team and no plan other than to collect money and disappear. Other scams target exchanges or wallets and steal funds directly, then try to launder stolen coins through other platforms.

Examples of notable crypto scams

Sofia illegal trading

A network of fake binary options and crypto exchanges operating in Eastern Europe ran bogus trading platforms and persuaded people to deposit funds.

• Impact: losses of around 115 million dollars

Mt Gox hack

Mt Gox was once the largest Bitcoin exchange. Attackers exploited weaknesses in the platform, manipulated prices down to almost zero then drained coins from the exchange.

• Impact: around 850,000 Bitcoin lost and the company went into liquidation in 2014

Indian ICO fraud

Amit Lakhanpal, founder of Money Trade Coin, promoted a coin that was never properly listed on major exchanges and made misleading claims about backing and regulation. Investors were left with worthless tokens.

• Impact: losses of more than 70 million dollars

These are only a few examples. New scams and variations appear constantly, especially during periods when crypto prices are rising and more casual investors enter the market.

How to protect yourself against crypto scams

Crypto investing carries risk even when you are dealing with legitimate projects. Scams add another layer of danger. Simple checks can dramatically reduce your chances of being fooled.

Do your research before you invest

Look up the company, the project and the people behind it. Search for the name of the coin or platform along with terms like review, complaint or scam.

Be cautious if

• You cannot find independent information beyond marketing material
• The white paper is vague, copied from another project or full of buzzwords
• The team members have no verifiable history or use stock photos

Be wary of guarantees and big promises

Scammers often promise fast profits, guaranteed returns or risk free rewards. Common red flags include

• Claims that you cannot lose
• Pressure to invest quickly before an offer expires
• Free money offers that require you to send some crypto first
• Heavy use of celebrity endorsements or influencer hype with no substance

In reality there are no guaranteed profits. You only make money if you can sell your crypto for more than you paid.

Be careful how you pay

Fraudsters prefer payment methods that are hard to reverse. Be extremely suspicious if you are told you must pay using

• Cryptocurrency only
• Wire transfer
• Gift cards or vouchers

Once money has been sent through these channels it is usually impossible to recover. Legitimate companies typically offer multiple, regulated payment options.

Watch for social engineering around crypto

Crypto scams are not limited to fake projects. Criminals also use email, social media and messaging apps to trick people into

• Sharing wallet seed phrases
• Installing malicious wallet software
• Clicking links to fake exchanges or login pages

Treat unexpected messages about investments, prizes or urgent account problems with caution, especially if they ask you to click a link or share sensitive information.

How resilient are your users against evolving cyber threats

Crypto scams are just one example of how cyber criminals adapt old tricks to new trends. The core tactic is the same as in many other attacks: use urgency, greed or fear to push people into hasty decisions.

That is why understanding, tackling and monitoring human cyber risk inside your business is critical.

Launch a free phishing simulation

Employee phishing remains a primary route for attackers who want to steal credentials, hijack payments or plant malware. Running regular phishing simulations helps you identify who is most at risk and where training is needed.

With an internal phishing test you can

• Launch an employee phishing campaign in minutes
• Use a library of proven email and landing page templates
• Get a full report of opens, clicks and compromises
• See which users are most susceptible to phishing attacks

Use these insights to target awareness training and strengthen your first line of defence before criminals exploit the same weaknesses in real attacks.

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