Don’t Fall For These Common Crypto Scams…

Don’t Fall For These Common Crypto Scams…

9 minutes to read | 04.08.2022
TL;DR Don't fall for any of these common crypto scams: Rugpulls and pump and dump scams. This is when certain investors or developers will hype up their coin so that the price goes up rapidly, then sell their large amounts of crypto dropping the price drastically, leaving everyone else with a low valued crypto. The "pig butchering" scam is when someone online talks to you for weeks or months before mentioning that they make a lot of money in crypto. They get you to invest in their project and then once they've squeezed money out of you, take everything and run. You will never see your money again. Another common crypto scam involves fake accounts online. These accounts will shill their coin, post fake links to fake websites where you will accidentally give them sensitive information, or telling you to send them crypto for some purpose.
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It’s a dog eat dog world out there in the crypto space. Not everyone is giving out free NFTs of ice cream, you know. There are some dirty people who are looking to get their hands on your cryptocurrency, and they have some pretty clever ways of doing so. But, you are smart, and you aren’t going to fall for any of these, so make sure that you pay attention to these common crypto scams.

Rug Pulls and Pump and Dumps

Rug pulls and pump and dumps are relatively similar scams, but they do differ slightly.

Rug Pull

A rug pull is when developers raise a lot of money for their project, but have no intention of doing anything with the project. Once they've raised a bunch of money, they'll take as much value as they possibly can, which sends the price down to near nothing, and abandon the project, aka pulling the rug on investors. Remember that crazy Netflix show Squid Game? A good example of a rug pull was a coin named after that show. The coin Squid Game started at $.01 and shot all the way up to $90 per coin. Here's the kicker, no one could sell this cryptocurrency except the developers. And they did, which caused the price to drop straight to zero. Everyone else was left with a useless coin, while the developers got away with all of their money.

Pump and Dump

A pump and dump is when a few people heavily invest in a coin, then hype it up to the point where everyone is jumping in, and then sell while the price is high. This starts with a few whales (people who hold a lot of crypto) investing a bunch of money into a cryptocurrency, and then hyping it up like crazy, usually on social media. As the price starts to skyrocket, more and more people jump in, which causes the price to keep going up. Then when the price is nice and juicy, the whales will sell their massive amounts of crypto, making huge amounts of money. The price starts to sink after the whales are done selling, causing others to start panic selling, lowering the price even more quickly. Then whoever didn't sell is left with a coin that is, usually, worth less than what they bought it at.

How to Avoid Rugpulls and Pump and Dumps

Think of these like rollercoasters. The price goes up, up, up, and then very quickly goes straight down once the scam has been pulled. A good way to avoid rug pulls and pump and dump scams is by checking the price for the last few days. If you see the price suddenly skyrocketing in the last few hours, something is up. Either something really, really great is happening to the project (if this happens you will usually be able to find a good reason), or this crypto may be in the middle of a pump and dump.

Disappearing Exchange/Pig Butchering

This type of scam is an interesting one because it plays such an extremely long game that it’s actually impressive. Here’s how the “pig butchering” scam works: Usually, this will involve males finding the scammer on a dating app like Tinder, or on social media like Twitter or Instagram. Of course, the scammer will use an attractive picture to lure the victim in. Here’s where it gets interesting. They will act like a real person who wants to get to know you. They will talk to you over the course of days, weeks, or months, but eventually, once they get on your good side, will start to mention their investments, and how successful they’ve been in cryptocurrency. They will tell you how they are making thousands of dollars per day, and it really gets your heart pumping. You think you’re in love! Omg! She’s hot and she loves crypto! Now that you've built a connection with this person over the course of time, you are more likely to trust them when they say they can help you invest in cryptocurrency and make money just like them. So when you tell the scammer that you are ready to invest they will bring you to a fake website, which will look like a real exchange, however it’s not. They will tell you to invest in a certain new coin that has been looking good. You invest in the coin, and it really starts to go up! They tell you to put in another investment, and another, and another. You do, and things are looking good! This price isn’t even real. It’s just a website displaying a price. You actually think you’re making a bunch of money, but the sad news is that you lost your money the moment you sent it over to this shady exchange. At this point, you’re ready to sell, but there will always be some kind of problem when you try to withdraw your money. They may even go as far as to say the funds are locked until you pay “taxes” to the exchange. If you send them this payment, you still will not be able to get your funds. That’s because the exchange will take their website down, meaning you can never access it again. And that’s it. They just ran away with your money.

How to Avoid the Disappearing Exchange Scam

If you’re on any social media or any dating sites be careful if they start talking about cryptocurrency investing, especially if you don't actually know the person. If it sounds too good to be true, it almost definitely is. Don’t send your money to any shady exchange, because once you do, it’s gone for good.

Fake Accounts

Fake accounts are a great way to get scammed… but we are looking to do the opposite of that. There are a couple of different ways to fall for fake accounts.

Fake Social Media Accounts/Links

This is the easiest way to get scammed since we are all following crazy amounts of crypto accounts. Crypto is also trending a lot, so looking through those posts can land you in some scams. Or you will see these posts in people’s replies, like Elon Musk. Going back to the “if it’s too good to be true, it probably is” philosophy, if anyone on social media claims they can make you tons of crypto, they are lying. There are other people who might also be shilling you their own coin by hyping it up on social media. This is most likely going to result in a rug pull or pump and dump scam. It’s best to avoid any suspicious links that anyone posts on social media, because it can lead to our next type of fake account, fake websites.

Fake Websites and Mobile Apps

This can go hand in hand with rug pull scams. Fake websites will look like legit projects and show tons of features for their crypto. Of course, this is all just to pump up the price on their coin, so they can make a bunch of money off of people. There are also websites set up to look like other websites and will have extremely similar URLs too. This can trick you into entering payment information into their website instead. Fake mobile apps serve the same purpose as fake websites. You might find fake apps for exchanges or cryptocurrencies. Thousands of people have gotten scammed from fake mobile apps. Most of the time Google and Apple will catch these fake apps before people can download them, but you still should keep an eye out.

Fake Emails

Most of the time these would go to your spam folder, but sometimes they get through and you’ll see one. Fake emails will look like emails sent from a regular cryptocurrency company that you might be a user for. It might include a promotion or whatever might make you click on the link to their website. This will definitely be a fake website set up to look like the real website that you would sign into without thinking twice. The moment you “sign in” this fake website will have the information they need to go log into the actual site. Then they’ll probably send your crypto to themselves. Another one to look for is when scammers send emails for Initial Coin Offerings (ICO). These are like when a company goes public and starts to sell shares to everyone. When the coin first launches to the public the prices usually rises like crazy. So, these can be intriguing. However, most just lead to pump and dumps and rug pulls.

How to Avoid Falling for Fake Accounts

Don’t trust anyone on social media that claims they can get you more crypto. Especially don’t click on any suspicious links people are posting on social media. Double check any website URL or the spelling of any mobile app before you download. This can save you a ton of pain by not giving your payment information to any fake websites. Also double check the address of any emails that you get, especially if it sounds a little too good to be true.

Bonus Tip: Doubling Crypto

Okay, this one is pretty much a meme of those old RuneScape days where people would tell you they could double your gold. All you had to do was trade them your gold and they would work their magic. Oh look, they just disappeared. Hmmm, maybe their internet just went out, they’ll be back soon. *waits forever* I’ve never actually seen this happen in real life with cryptocurrency, but I do see people making sarcastic comments about doubling your crypto. No one can double your crypto. If they could double crypto, they would double their own crypto, and they wouldn’t be talking to you because they’d be too busy chilling on their yacht.

How to Avoid Losing Your Crypto

Don’t send your crypto to anyone who says they can double your crypto. It is impossible to double crypto, so kindly tell them to pound sand. Summary Get familiar with these scams so that you will catch them instead of falling prey to them. They are: Rug pull and pump and dump are very similar crypto scams. They involve getting as much value put into their crypto as possible and right when they hit the top, they sell, make massive amounts of money, and leave people with an almost worthless crypto and a lot of lost money. Don't fall for the "pig butchering" scam. This is where scammers play the long game. They will find you somewhere on the internet, seduce you into investing into their "project", and then once you've put in a bunch of money, completely bail on you, leaving you with nothing. Fake accounts are a common way to get scammed when it comes to crypto. There are so many accounts on social media posting about their fake coin, bots hyping up this crypto or that crypto, and people posting fake links to fake websites. There are fake websites and apps that look exactly like the real thing, but are designed to get your payment information. And finally, there are emails to watch out for as well.
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