Common Scams
Pig Butchering Scams
Pig butchering scams are very prevalent in the crypto space, in these scams a victim is approached online by a scammer who build a long-term relationship with the victim. These can often be romantic in nature and commonly start on dating and messaging apps. After establishing trust, the scammers will either claim to need money, or they’ll present the victim with an investment opportunity. These usually entail fradulent investment platforms which don’t allow users to withdraw their funds after depositing them.
Rug Pulls
A rug pull is one of the most common scams within the crypto community. These scams involve creating a lot of hype around a new project, developers will advertise the project heavily leveraging marketing tactics to entice early investors. Initially this can result in skyrocketing prices for a new token, but the project organizers will abrubtly abandon the project selling their supply. This causes the priced to tank, leaving those who bought in with useless assets. These scams are rampant on platforms such as pump.fun, and ape.store, it’s important to only deal with coins listed on reputable exchanges.
Ponzi Schemes
Ponzi schemes are a classic scam that’s seen resurgence in the crypto field. In a Ponzi Scheme, a business will promise outlandish returns and seek to consistently bring in new investors. The business will use the funds brought in from new investors to pay out existing ones creating a continuous cycle. When they’re no longer able to bring in new investors the model falls apart, and the business becomes insolvent.
Impersonation Scams
Many crypto scams involve fake platforms that impersonate an existing exchange or project. These can include phishing scams designed to steal your credentials, private keys, or seed phrases. Alternatively, these may be fake platforms that entice victims into depositing funds. If you suspect that an opportunity may be an impersonation scam, research the project and ensure that you only interact with its official domain.
Fake Projects
Another common scam is the fake wallet, exchange, or project. Malicious developers will create promising looking projects and promote them on popular forums and social media platforms. These fake projects will either be abandoned and funds siphoned, or simply serve as a method to drain funds from victims who interact with the project.