Most common crypto scams in 2024

It is estimated that around $2 billion was lost by investors due to scams, rug pulls, and hacks in 2023. Although the technology is becoming more robust and secure, and many users are more aware of the tactics used to steal digital assets, scammers still find ways to steal your crypto if you’re not vigilant.

Experts at Kryptocasinos.com have curated a list of the most common scams occurring in 2024, along with tips on how to recognize and avoid them. This data was gathered from the Department of Financial Protection and Innovation (DFPI) ‘Crypto Scam Tracker,’ which keeps an updated record of scams as they are reported, including descriptions of fraudulent schemes and the names of scam websites.

Most Common Crypto Scams:

1. Fraudulent Trading Platforms

According to reports from the DFPI, 87% of scams involved the use of fake websites or trading platforms. These scams use fraudulent sites or applications that convince victims to deposit funds, claiming they offer access to exclusive investment opportunities or that they are reputable platforms. These fake platforms often appear legitimate, replicating real-time price movements and generating fake profits. Many of these platforms are advertised online and can look nearly identical to genuine ones.

How to Avoid These Scams:
To avoid these types of fraud, investors should stick to trusted exchanges or transfer their funds to reliable wallets. Double-check the URL to ensure it’s the official website—there are many online tools that can verify URLs and alert you if they’re suspicious. Additionally, websites that begin with "HTTP" instead of "HTTPS" may indicate that the site is not secure.

If it’s an app, check the developer and app details within your device’s app store. Reputable apps usually display the developer’s name, additional details, and download numbers—indicators of the app’s legitimacy. Also, follow links directly from the platform's official website. If someone you don’t know is urging you to sign up and deposit funds into an unfamiliar platform, take it as a red flag and proceed with caution.

2. Pig Butchering Scams

A pig butchering scam is a long-term investment fraud where the victim is slowly manipulated into contributing increasingly larger amounts to a fraudulent cryptocurrency scheme. The term "pig butchering" refers to the process of “fattening up” the victim by gaining their trust before "slaughtering" them.

These scams often operate through social media platforms, attempting to persuade the victim to transfer funds to a fake platform. Fraudulent platforms may pose as legitimate sites and even generate artificial profits to encourage victims to make further deposits. Victims are usually unable to withdraw their funds and are sometimes asked to pay additional fees (such as service charges or taxes) before being able to withdraw, resulting in even larger financial losses. This scam accounted for 58% of reports made to the DFPI.

How to Avoid These Scams:
Remain cautious online. Scammers may reach out via WhatsApp and text messages. The safest course of action is to block messages from unknown contacts. Some fraudsters may even impersonate family members or friends, making it crucial to verify the person’s identity. Scammers often avoid phone calls or in-person meetings to hide their true identity—if someone is being evasive, it’s a clear red flag.

3. Imposter Scams

Imposter scams occur when fraudsters pretend to be representatives of reputable companies, government officials, or well-known figures to gain access to personal information or cryptocurrency accounts. Scammers often combine these tactics with other schemes to persuade victims to transfer funds to fake platforms.

Many scammers initiate contact through social media platforms such as Facebook, Instagram, or LinkedIn and attempt to move the conversation to messaging apps like WhatsApp. One example reported by the DFPI involved fraudsters impersonating BlackRock, a legitimate investment firm, on Facebook and WhatsApp. They lured victims into crypto trading schemes by promising high daily returns. However, the provided links were fraudulent, resulting in the victims losing their deposits.

How to Avoid These Scams:
Remain wary of messages from unknown users on social media. Any message encouraging you to invest in cryptocurrency should be treated with skepticism. If someone insists on moving the conversation to WhatsApp, it could be a warning sign. Legitimate companies, such as BlackRock, do not personally reach out to individuals asking them to invest. Always verify links to ensure they lead to the official site and are not fraudulent.

4. Romance Scams

Romance scams involve creating fake online profiles on dating apps or social media to build trust and form an emotional connection before manipulating the victim into transferring cryptocurrency.

One report in the DFPI's tracker described a California resident who met "Mark" on the dating app Bumble. Mark convinced the victim to continue the conversation on WhatsApp and later claimed he could teach them how to trade cryptocurrency. Eventually, the victim deposited funds into a fraudulent platform, resulting in a loss of over $50,000. Romance scams made up 11% of reported cases.

How to Avoid These Scams:
Be cautious when someone online encourages you to invest money. Fraudulent accounts often use stolen photos and videos to appear genuine. You can use Google reverse image search to check if the photos have been taken from elsewhere. In the report about "Mark," the scammer was found to be using images of a popular fitness influencer.

Expert Advice:

A spokesperson from Kryptocasinos.com stated:
"Cryptocurrency scams are a serious threat, so it’s essential to stay vigilant. Always research and use trusted platforms and wallets. Never share your private keys or sensitive information. Be cautious of offers that seem too good to be true, and double-check everything before making an investment. By staying informed and careful, you can protect yourself and enjoy the benefits of cryptocurrency safely."