How to spot crypto scams: 9 common fraud types explained
Crypto fraud is becoming increasingly common and often targets your crypto wallet, your seed phrase, or simply your trust. Scammers use tactics such as crypto phishing through fake websites, bogus investment platforms, giveaway scams, malicious apps, and so-called “asset recovery” services that promise to retrieve your lost crypto.
In this article, we explain what happens in each scam, what is being promised, what the risks are, and what you can do to prevent the loss of your assets.
Pay close attention to these warning signs: unrealistic promises, pressure to act quickly, requests for your seed phrase or password, and additional fees to “release” your funds. If you recognize these signals, there is always a risk.
What is crypto phishing and how to avoid it?
What happens?
Scammers impersonate employees of well-known crypto platforms such as Coinbase, MetaMask or Binance. You receive an email, SMS, or social media message containing an urgent notice about your account.
You are redirected to a fake website that closely resembles the legitimate one.
What do they claim?
They may say your account has been blocked or that you must verify immediately to avoid problems. They often create a sense of urgency to pressure you into acting fast.
What is the risk?
You enter sensitive information such as your seed phrase or password. This gives the scammer immediate access to your wallet. Your funds can disappear permanently, resulting in loss of assets.
Scammers sometimes use personal data obtained from previous data breaches, making their messages appear legitimate. This is always a risk.
What should you do?
• Never share your seed phrase or password.
• Always verify the website address carefully.
• Navigate to the official website yourself instead of clicking links.
How to recognize fake investment platforms
What happens?
You are approached by a so-called crypto investment platform or trading app.
What do they promise?
They make unrealistic promises of high returns. In the beginning, you may even be able to withdraw small amounts to build trust.
What is the risk?
Once you deposit larger sums, withdrawals become difficult. Suddenly, you must pay additional “taxes” or “administration fees.” Your funds can disappear permanently.
This is always a risk with unknown platforms.
What should you do?
• Verify whether the platform is registered and reputable.
• Be cautious of guaranteed profits.
• Never invest under time pressure.
How to recognize a crypto giveaway scam (BTC doubling)
What happens?
Scammers impersonate well-known companies or public figures.
What do they promise?
They claim your contribution will be doubled. For example: “Send 0.05 BTC and receive 0.1 BTC back.” These are unrealistic promises.
What is the risk?
You will not receive the crypto you send. Blockchain transactions are irreversible. Your funds are gone permanently.
This is always a scam.
What should you do?
• Never send crypto to receive more in return.
• Verify official communication channels of companies.
What are malware apps?
What happens?
You download a wallet app from an app store. The app looks like a legitimate wallet but is fake.
What do they claim?
The app appears to function normally and asks for your seed phrase to “restore” your wallet.
What is the risk?
Once you enter your seed phrase, the scammer gains access to your wallet. Your crypto can disappear permanently.
The fact that an app appears in an app store does not automatically mean it is safe. Unknown apps always carry risk.
What should you do?
• Download apps only via official links from the provider.
• Check reviews and verify the developer.
• Never share your seed phrase in an unknown app.
What is job offer fraud?
What happens?
You receive a job offer from a well-known company. You are instructed to download software or pay a fee.
What do they promise?
A good salary, remote work, and a quick start.
What is the risk?
The software turns out to be malware that steals passwords or seed phrases. Or you are asked to pay a training fee or deposit in crypto. After payment, communication stops. This can lead to loss of assets.
What should you do?
• Never pay to get a job.
• Verify the company through official channels.
• Do not download unknown software.
What are review or task scams?
What happens?
You are offered small tasks or review work from home.
What do they promise?
You earn small amounts initially and can “level up” to higher-paying tasks.
What is the risk?
To unlock higher levels, you must deposit crypto. You will not recover these larger amounts. The work turns out to be fake. Your funds can disappear permanently.
What should you do?
• Be cautious with jobs that require upfront payment.
• Never deposit crypto to gain access to work.
Physical extortion or theft
What happens?
Individuals holding large amounts of crypto, often called “whales”, may become targets of physical theft or extortion.
What do they demand?
Criminals attempt to gain access to your wallet’s seed phrase through burglary or threats.
What is the risk?
Access to your seed phrase means full control over your crypto, potentially leading to total loss of assets.
What should you know?
• Do not publicly disclose how much crypto you own.
What is a pig butchering scam (crypto dating scam)?
What happens?
You meet someone online via a dating app, social media, or even through a seemingly misdirected WhatsApp message. Gradually, a relationship of trust is built.
What do they promise?
Your new “partner” talks about successful cryptocurrency investments and shows impressive profits, encouraging you to invest as well.
What is the risk?
You start with small amounts and may even withdraw some funds to build confidence. But once you invest larger sums or take out loans to invest more, withdrawals suddenly become impossible due to additional “taxes,” “fees,” or “penalties.” Contact disappears, and your funds are gone permanently.
What should you do?
• Be extremely cautious if someone you only know online proposes crypto investments.
• Independently verify any investment platform.
• Never share your seed phrase or wallet details.
• Report the fraud to the police and your national fraud reporting center if you become a victim.
What is an asset recovery scam?
What happens?
Someone contacts you claiming they can recover your lost crypto.
What do they promise?
They guarantee that your crypto can be recovered through tracing, legal action, or international cooperation.
What is the risk?
You must pay upfront for the service. After payment, you hear nothing more, and your funds are lost for good.
What should you do?
• Be alert to unrealistic guarantees of success. Crypto recovery is never guaranteed.
• Verify whether the company is properly registered in its jurisdiction.
• Ask which blockchain analytics tools they use and inquire about the investigators’ expertise and certifications.
In conclusion
Scammers use different methods, but the warning signs are clear:
• Unrealistic promises
• Pressure to act quickly
• Requests for your seed phrase or password
• Additional fees to release funds
If something seems too good to be true, there is always a risk. By staying alert and never sharing your sensitive information, you significantly reduce the chance of losing your assets.
If you have become a victim or suspect fraud, feel free to contact us. We may be able to assist you with advice, investigation into possible recovery options, and/or preventing further damage.
Contact us at: crypto@dataexpert.nl