How to spot them and protect your money

It is estimated that investors will lose around $2 billion to scams, fraud, and attacks in 2023. While technology has become more secure and stable, and many users are more aware of the tricks used to steal assets, there are still ways for thieves to get their hands on your crypto if you’re not careful.

Kryptocasinos.com experts have compiled a list of the most common scams used in 2024 and how you can spot and avoid them. The data was collected from the Department of Financial Protection and Innovation’s (DFPI) ‘Crypto Scam Tracker’, which has up-to-date scams as they are reported, including descriptions of the scams and the names of the scam sites.

Most common crypto scams

Fraud

% of reports containing fraud

Fake trading platform

87%

Pig Slaughter

58%

Fake

%27

Romantic

%11th

Fraudulent Trading Platforms

Of all scams reported by DFPI, 87% involved the use of a fake site or trading platform. These scams involve a fake website or app that tricks victims into depositing money into the platform under the guise of providing access to a unique investment opportunity or being a trusted site. Fake platforms appear legitimate, even going so far as to mimic price action and generate artificial profits. These platforms are often advertised online and may appear identical at first glance.

How to avoid these scams:

To avoid these scams, investors should only deposit funds on trusted exchanges or move their cryptocurrencies to trusted wallets. By sticking to these, you can be sure that your funds are safe and protected. If you are unsure whether the website is legitimate or not, double-check the URL to make sure it is the official website, there are many sites online that can check URLs for you and let you know if they are scams, also if a website’s URL starts with HTTP instead of HTTPS, this can also indicate that the site is not secure.

If it’s an app, double-check the developer and app details. This can be done on your device’s app store, trusted apps will have more information like developer names and download counts, which can be another good indicator of a platform’s legitimacy. You can also follow links to a platform’s official website. If a stranger is trying to get you to sign up and deposit money for an unknown platform, that should be a red flag and you should proceed with extreme caution.

Pig Slaughter Scam

The pig slaughtering scam is a long-term fraud and investment scam in which the victim is tricked into contributing to an increasingly fraudulent cryptocurrency scheme. It is called a “pig slaughtering” scheme because the perpetrators “fatten” the victim up in order to gain their trust before “slaughtering” them.

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These are often conducted via social media platforms and attempt to trick the victim into transferring money to a fraudulent platform. The fraudulent platform often appears legitimate and offers fake profits to encourage the victim to continue using the platform and perhaps deposit more money. However, the victim is never allowed to withdraw their money from the website and may be required to send more money for various reasons (such as service fees or IRS taxes) before any money can be withdrawn, adding to the already potentially significant financial losses. This scam was seen in 58% of reports to the DFPI.

How to avoid these scams:

This is another scam that can be avoided by being careful online; criminals can also contact victims via WhatsApp and text messages. The best way to stay safe is to completely ignore and block messages from strangers. Some scammers are now even trying to impersonate family and friends, so it’s even more important to double-check that you know who you’re talking to. Scammers never want to meet up, and if they’re pretending to be someone else, they may not want to talk on the phone as this would reveal their true identity or they’re not who they say they are and therefore are being overly avoidant, this is a clear red flag.

Fraud Scams

Impersonation Scams occur when a fraudster pretends to be a reputable company, government representative, or public figure to gain access to a user’s systems and personal data in order to profit financially. The fraudster may also use other fraudulent techniques and attempt to get victims to deposit money into fraudulent platforms.

Many scammers use social media to find their victims, starting conversations on platforms like Facebook, Instagram and LinkedIn, and some try to take conversations to WhatsApp. This scam was reported in 27% of all reports to the DFPI. One example reported by the DFPI was a scam where people impersonated the legitimate investment firm BlackRock on Facebook and WhatsApp, encouraging victims to trade crypto options and promising high daily returns. However, the links were later found to be fake, meaning any money invested would have been stolen.

How to avoid these scams:

If you are contacted by strangers on social media, it is important to be careful; any message trying to convince you to invest in crypto should be considered a red flag. If someone asks to take the conversation to WhatsApp, this can also be a big indicator that someone is trying to scam you, so it is best to block and report the account. Companies like BlackRock mentioned above will never reach out to you and ask you to invest in person; these can also be checked to make sure that the links to these websites are legitimate and not scams.

Romance Scam

Romance scams are a very popular type of scam that uses the popularity of social media and dating platforms to manipulate and/or steal from a victim by using a fake online profile and then using the illusion of a romantic or intimate relationship to manipulate and/or steal from the victim. The DFPI crypto scam tracker reported one case involving a California resident who reported meeting “Mark” on the dating app Bumble. Mark asked the victim to shift the conversation to WhatsApp. They continued to communicate, and at one point Mark suggested that he could teach the victim how to trade cryptocurrencies. Mark convinced the victim to invest their money on a fake platform that was eventually stolen, resulting in a loss of over $50,000. This scam was featured in 11% of reports.

How to avoid these scams:

As with spoofing scams, be wary of strangers trying to trick you into depositing money. Online accounts often use stolen photos and videos to create the illusion that they are real people, and these accounts are often difficult to identify. Images can be reverse-searched on Google to see if they were taken from somewhere else; for example, the report on ‘Mark’ stated that after investigation, the scammer was found to be using photos of a popular fitness personality.

A spokesperson from Kryptocasinos.com said: “Scams are a real threat in the cryptocurrency world, so it’s important to stay safe. Always do your research and make sure you’re using trusted platforms and wallets.

“Never share your private keys or personal information with anyone. Be wary of offers that seem too good to be true and double-check everything before investing. By staying informed and careful, you can protect yourself from scams and safely enjoy the benefits of cryptocurrencies.”

The article, “The Most Common Crypto Scams of 2024: How to Spot Them and Protect Your Money,” was originally created and published by International Accounting Bulletin, a brand owned by GlobalData.

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