Are crypto scams everywhere? Knowing common tactics is the only way to protect your wallet

The cryptocurrency market has recently seen a surge in popularity, with novice investors continuously pouring in. However, accompanying this trend are lurking scam traps that are watching closely in the shadows. From fake trading platforms and false promises of high returns to various deceptive tactics, it’s hard to guard against all risks. Today, we will take an in-depth look at common scams in the crypto space and how to respond if you fall victim.

Why Are Virtual Currency Scams Particularly Rampant?

Compared to traditional investment tools like stocks and funds, crypto scam cases have increased significantly in recent years. There are several reasons behind this:

First, global banking regulations are becoming increasingly strict. Traditional scam groups relied on bank transfers to launder money, but now financial institutions’ anti-money laundering mechanisms are more comprehensive, forcing scammers to turn to the “regulation vacuum” of cryptocurrencies.

Second, the inherent features of cryptocurrencies make them a shield for scams. Decentralization, irreversible transactions, and difficulty in tracking—these advantages have become tools for scammers, making it hard for victims to recover funds through official channels.

Third, human greed. Faced with stories of rapid appreciation of assets like Bitcoin, many people are easily attracted by promises of high returns and jump into scammers’ traps impulsively.

Common Tactics Used in Cryptocurrency Scams

Based on the nature of scams, they can generally be divided into two categories: traditional financial scams and crypto exchange scams.

Traditional Financial Scam Tactics

Ponzi schemes: Using new money to pay old debts

This is the most classic and common scam model. Scammers claim that a certain investment project can generate “super high returns,” such as 20%, 30% annualized or even higher, enticing you to invest. But in reality, there are no real profits; they are just using new investors’ money to pay early investors’ “interest,” creating an illusion of profit.

When new funds are insufficient to sustain the scheme, the project team will find reasons to run—claiming hacking incidents, system maintenance, withdrawal restrictions, etc.

Real case: The 2022 Luna collapse shocked the industry. A stablecoin launched by a certain ecosystem claimed to offer an annualized return of 20%, attracting investors worldwide. The result? The funds couldn’t hold up, the stablecoin decoupled, and the token eventually went to zero, causing over $40 billion in losses globally.

How to identify and prevent:

• Be cautious of returns exceeding industry norms; don’t hold onto the hope of “lucky wins.”
• If a platform entices you to recruit new investors through rewards, stay far away—this is a typical Ponzi feature.
• Check the project’s real business and revenue sources, rather than just listening to attractive promises.

Phishing scams: Imitating legitimate channels to steal personal info

Scammers impersonate exchange customer service or government agencies, claiming your account is at risk, your wallet has issues, or your computer has vulnerabilities. They lure you to click on links they send, filling in personal information or wallet private keys. Smarter scammers even clone legitimate websites, making it hard to distinguish real from fake.

Some phishing scams have also evolved—posing as well-known media interviewers or industry influencers to gain victims’ trust before attacking.

How to identify and prevent:

• Never click on links from strangers, no matter how official they seem.
• Check if the URL is correct; use browser security prompts.
• Never input passwords, private keys, or sensitive info in pop-ups or third-party links.
• Regularly back up important data so you can recover if compromised.

Airdrops and lottery scams: “Free tokens” falling from the sky

Scammers claim to give away free tokens of popular projects to lure you into connecting your wallet and signing transactions. Unbeknownst to you, signing that transaction grants scammers authorization to transfer your assets.

Common tactics include:

• Setting up fake websites claiming to distribute airdrops.
• Sending phishing emails or texts prompting you to enter seed phrases.
• Claiming that claiming the airdrop requires paying GAS fees or handling charges.
• Impersonating celebrities to post “limited edition airdrop” links.

How to identify and prevent:

• Always verify on the official project website before participating in airdrops; don’t rely solely on social media info.
• If your wallet suddenly receives unfamiliar tokens, do not interact—this is likely a phishing trap.
• Remember: Legitimate airdrops do not require signing transactions or paying fees.

Crypto Exchange-Related Scams

Fake exchanges: The true face of impostor platforms

Scammers create fake exchanges that look almost identical to real trading platforms, only altering the domain name—such as changing “abc.com” to “abcc.com” or “abb.com.” Most users cannot tell the difference.

They promote heavily through social groups, ads, and influencer recommendations to attract beginners. Once you deposit funds, all your “trades” and “profits” are just digital illusions; the goal is to keep scamming you for more money. When you try to withdraw, the platform will give various excuses—freezing accounts, requiring deposits, system maintenance, etc.—and eventually disappear.

How to identify and prevent:

• Check the URL carefully and compare it with official channels.
• Verify the exchange’s regulatory licenses and company registration info.
• Avoid downloading apps from unknown sources; be cautious even in app stores.
• Be wary of platforms with dedicated personnel offering one-on-one sales services.
• Prefer large, well-established, reputable exchanges with long operating histories.

Issuing new cryptocurrencies (ICO) scams

ICOs are a legitimate way for blockchain projects to raise funds, but they have also become tools for scammers. They produce polished whitepapers, recruit celebrities, and release exaggerated promotions, claiming to be the next “lucrative opportunity,” attracting investors to buy new tokens. After raising funds, the team disbands, the project collapses, and investors lose everything.

How to identify and prevent:

• Be especially cautious with new ICO projects; wait until they have a certain scale before investing.
• Check the team’s background and the authenticity of the whitepaper.
• Don’t be fooled by promises of “limited issuance” or “early investment yields 10x.”
• Do thorough research before making decisions.

Collusion among whales to trap retail investors

This is one of the most covert and hardest scams to detect. Large holders (whales), in collusion with KOLs and communities, create false positive news—claiming “a certain token will be listed on a major exchange” or “major partnership announced”—while secretly accumulating low-priced tokens. When retail investors are attracted to chase high prices, whales start selling off in batches, causing the price to plummet and trapping retail investors.

Because this manipulation operates in a legal gray area, it’s difficult to classify as a scam, but its destructive power is significant.

How to identify and prevent:

• Check token distribution; if most tokens are concentrated in a few accounts, be cautious.
• Monitor large deposits; sudden influxes of funds often indicate impending dumps.
• Learn to verify news authenticity; don’t blindly follow hype on social media.
• Develop on-chain investigation skills; pay attention to large holders’ activities.

What to Do If You Are Scammed?

If you realize you’ve been duped, quick action is crucial:

Stop losses immediately:

• If scammed on an exchange, log in and cancel pending transactions, contact customer service to freeze your account.
• If bank transfer was involved, call the bank’s customer service immediately to freeze the recipient’s account (if funds are not yet withdrawn).
• If your wallet authorization was stolen, use tools like Revoke to cancel malicious contract permissions to prevent further asset theft.
• Transfer remaining funds to a new wallet; the old wallet is no longer secure.

Gather evidence:

• Save all chat records, recipient info, transfer records, and platform screenshots.
• These are important for future responsibility claims and compensation.

Report promptly:

• If scammed in Taiwan, call the 165 Anti-Fraud Hotline.
• Report to local police stations, prioritizing those experienced in cyber fraud.
• Cross-border investigations are difficult, but some recovery of funds may still be possible.

Beware of secondary scams:

• After reporting or sharing your experience, you may receive private messages from “fake lawyers” or “professionals” claiming they can help recover your funds—these are typical secondary scam traps requiring upfront payments.

Summary

Crypto scams are diverse and ruthless, but by remembering a few key points, you can greatly reduce your risk:

✓ Use only legitimate, large-scale, well-regulated trading platforms. ✓ Never click on links from strangers, and don’t trust strangers’ promises. ✓ Don’t believe in “free lunches” falling from the sky; super high returns are always traps. ✓ Do thorough research before investing; fully understand the project. ✓ Diversify your investments; don’t put all your chips into one project.

The crypto market offers both opportunities and risks. Choosing trustworthy trading platforms, staying vigilant, and continuous learning are the best ways to protect yourself.