Cryptocurrencies, such as Bitcoin and Ethereum, have gained popularity in recent years as a means of investment and a way to make online transactions.

However, the cryptocurrency market is not without its risks, and there are many scams out there that prey on unsuspecting investors. Let’s explore some common cryptocurrency scams and what you can do to protect yourself.

Types of cryptocurrency scams

Fake crypto exchange

One common type of cryptocurrency scam involves “fake” or “sham” cryptocurrency exchanges. These exchanges may claim to offer a wide range of cryptocurrencies for trade, but they are not actually legitimate exchanges.

Instead, they are designed to steal the personal and financial information of investors or to defraud them of their money.

For example, a fake cryptocurrency exchange may set up a website that looks legitimate and invite investors to create an account and deposit money.

Once the investor has deposited money, the exchange may either steal the money or use it to trade on behalf of the investor without the investor’s consent.

In some cases, the exchange may even claim to offer “guaranteed” returns on investments, luring investors in with the promise of easy profits.

A Ponzi scheme cryptocurrency

Another common type of cryptocurrency scam involves “Ponzi” or “pyramid” schemes. These schemes may involve the sale of unregistered securities or the promotion of “investment opportunities” that promise high returns with little or no risk. However, these schemes are not legitimate investment opportunities and are designed to defraud investors of their money.

A Ponzi scheme may involve the promotion of a new cryptocurrency or a “mining” operation that claims to generate significant profits for investors.

Investors may be encouraged to recruit others to join the scheme, with the promise of earning a commission on the investments of those they recruit. However, these schemes are not sustainable and will eventually collapse, leaving investors with significant losses.

The most important red flags of cryptocurrency scams

To protect yourself from cryptocurrency scams, it’s important to be aware of the red flags and take precautions. Here are some tips to help you stay safe:

Previous investors were unable to withdraw

Many individuals become aware they have fallen victim to fraud when they are unable to retrieve their funds. They may be informed they have to wait for an extended period of time, invest additional funds to reach a higher level account, pay back loans and matching funds, and continuously pay hidden taxes, fees, or charges. As a result, they eventually give up trying to recoup their money. It is important to note that one should never put in more money in order to get their money back.

Research the company

Before you invest in a cryptocurrency or a cryptocurrency exchange, do your research and make sure the company is legitimate. Look for independent reviews and check with government agencies or consumer organizations to see if there have been any complaints filed against the company. Also, you may want to check what other investors are saying about the project on

No address or phone number

When scams are uncovered, the perpetrators quickly shut down their websites, email accounts, messaging platforms and social media accounts, and vanish. Many of them operate from overseas locations, making it challenging to locate them. To prevent this, it is important to ensure that businesses have a physical address, branch locations and customer service contact information readily available. This enables customers to know where to turn for assistance in case of any issues. It is advisable to avoid businesses that do not provide this information or unregistered entities located outside of the United States. Additionally, one can confirm the address by performing a street-level map search.

Guaranteed returns

Be wary of companies that make unrealistic promises, such as guaranteed returns or easy profits, or that pressure you to make a decision quickly. These are red flags that the company may be a scam.

Don’t give out personal information

Be cautious about giving out your personal and financial information, especially to companies you are not familiar with. Scammers may use this information to steal your identity or defraud you of your money.

Don’t invest more than you can afford to lose

The most crucial advice for investors is to never invest more than what they can afford to lose. This not only helps to avoid losing sleep over financial losses, but also prevents emotions from clouding their judgment.

Investing in cryptocurrencies carries significant risks, and you should only invest money that you can afford to lose. Don’t let the promise of easy profits tempt you into taking on more risk than you can handle.

Our investigations into Common Scams of 2023

ICO (Initial Public Offering) scams:

An Initial Coin Offering (ICO) is a fundraising method used by companies to raise capital by issuing and selling digital tokens, also known as cryptocurrency or tokens. While some ICOs are legitimate, there are many scams out there that prey on unsuspecting investors. In this article, we’ll explore some common ICO scams and what you can do to protect yourself.

Types of ICO scams

No intrinsic value

One common type of ICO scam involves companies issuing and selling tokens that have no intrinsic value. These tokens may be marketed as a way to access certain services or products, but they are not backed by any real assets and are unlikely to increase in value.

For example, a company may claim to be developing a new cryptocurrency or blockchain technology and offer tokens as a way to fund the development. However, the company may not actually have a viable product or business plan, and the tokens may have no real value. Investors who purchase these tokens may be left with significant losses.

Not registered with regulator authorities

Another common type of ICO scam involves companies issuing and selling tokens that are not registered with the appropriate regulatory authorities. These companies may claim to be exempt from registration or may simply ignore the registration requirements altogether. However, investing in unregistered securities carries significant risks, and investors may be left with little recourse if the company fails or is involved in fraudulent activity.

ICO exit scams

An Initial Coin Offering (ICO) exit scam is a fraudulent scheme where the creators of a new cryptocurrency project collect funds from investors and then disappear, leaving the investors with worthless tokens. This type of scam has become increasingly common in the cryptocurrency market, as the vast majority of new coins can be qualified as pumps and dumps.

The creators of these scams often copy the codebase from an existing project, change a few things to set it apart for novice investors, and release it to the public.

They’ll keep a large number of coins to themselves and slowly sell them to the newcomers while hyping up the project and promoting it as a surefire investment.

Once the creators have sold enough of their own coins and the price starts to drop, they will exit their position and disappear, leaving the investors with worthless tokens.

It’s important for investors to be cautious and do their own research before investing in any new cryptocurrency project. It’s also important to be aware that most ICOs do not have any real-world use case and therefore it’s important to be careful when investing in them. You should always be skeptical of claims of guaranteed returns, and be sure to verify the identities of the project’s team members and their track records.

To protect yourself from ICO scams, it’s important to be aware of the red flags and take precautions.

Our investigations into Common Scams of 2023

How to spot NFT (Non-Fungible Tokens) scams:

Non-Fungible Tokens (NFTs) are digital assets that are unique and cannot be exchanged for other assets on a one-to-one basis. NFTs are often used to represent ownership of digital art, music, or other types of content. However, like any other asset, NFTs are vulnerable to scams, and it’s important to be aware of the red flags and take precautions to protect yourself.

Types of NFT scams

Counterfeit NFTs

One common type of NFT scam involves the sale of fake or counterfeit NFTs. These NFTs may be marketed as rare or valuable, but they are not actually genuine and have no real value. For example, a scammer may create and sell an NFT that purports to represent ownership of a famous piece of digital art, but the art may not actually be authentic.

NFT exit scams

An exit scam is a type of scam in which developers promote an NFT (non-fungible token) to attract investment, then disappear with the funds after receiving a substantial amount. They often use social media to generate excitement and trust around their NFT before disappearing.

NFT phishing attempts

Phishing is a common tactic used by hackers to gain access to NFT accounts. They send fake links via email, social media, and forums like Twitter and Discord. When users click the link and enter their account information, hackers use keylogging or spyware to steal the account details and take control of it.

NFT Bidding Scams 

Scammers often target NFT sellers in the secondary market through bidding scams. They place high bids on NFTs for sale and convince the seller to accept their offer. However, these scammers may then change the type of cryptocurrency used for the transaction without the seller’s knowledge.

NFT pump and dumps

A pump-and-dump scam is a tactic used by fraudsters to deceive investors by artificially inflating the value of an NFT. They achieve this by spreading false information and misrepresenting the NFT. Once the price is increased, they sell the NFT and disappear, leaving the investors with valueless assets. These scammers often use social media and celebrity endorsements to generate excitement around the NFT, and may even invest a large amount of money in order to make it more attractive to potential investors.

NFT plagiarism

NFTs are digital tokens that represent unique assets. Unfortunately, plagiarism is a common issue on many NFT platforms, with more than half of all NFTs being copies of existing work and having no real value. This means that there is a significant risk of purchasing a stolen copy of an artist’s work. As soon as it becomes clear that an NFT is counterfeit, its value will drop. To avoid this, it is important to verify an NFT before making a purchase by checking the seller’s history and social media profiles to ensure that the artwork is original and belongs to them.

Like any market, there are always potential risks and scams that can occur. However, it is important to note that NFTs are not inherently scams. It is possible for people to use NFTs to defraud others or to sell low-quality or fake items, just as it is possible for people to do the same with physical goods.

Crypto Scam Blacklist

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Our investigations into Common Scams of 2023