How to Protect Yourself from Crypto Scams

Almost 50,000 people reported losing a total of over $1 billion in crypto scams in 2022 – with the real figures likely much higher, as these numbers only represent reported crypto crimes.¹

Because crypto is a new type of currency and not well understood — and because it’s quick to transfer and hide — it presents a unique risk to consumers and is especially attractive to scammers.

The good news is that you can protect yourself by learning about the 5 most common variations of crypto scams.

And if you already own crypto, understanding scam text messages — also known as “smishing” — can also help keep you safe from inadvertently divulging your private crypto wallet keys or other information that could lead to your crypto being stolen.

1. Investment scams

“Incredible” investment opportunities are perhaps the most common crypto scam, and they play on your fear of missing out, and the desire to get rich quick.

In many cases, scammers will create legitimate-looking websites. These can be used to steal your personal information, or your cash. Sometimes, sophisticated scammers will also do monthslong or yearslong scams, and may even initially pay you money that is “profit” from your investment – before eventually disappearing with all your cash.

The bottom line? If it sounds too good to be true, it is.

2. The classic pump and dump scam

This scam is a variation on what’s been done in the stock market for decades: a person or group convinces others to invest into a particular crypto coin, often through posts on social media. Once the crypto price is driven up sufficiently, all the scammers simultaneously cash out – leaving you with a worthless investment (or an investment worth much less than what you paid in).

3. Blackmail and extortion scams

In this variation of crypto scams, scammers send out messages claiming they have embarrassing personal information, photos, or videos of you. They typically threaten to make this information public unless you send them crypto right away.

If you ever receive a message like this, the likelihood is that you’re not being personally targeted – it’s the identical message that’s been sent out to thousands of other people, who have never had any contact with the criminals. You should report this type of message to the FBI.

4. Job scams involving crypto

Job scams have many varieties. In this version, scammers create fake job listings or send unsolicited job offers, including via email, social media, and legitimate job websites.

The nonexistent “jobs” are often in the crypto field, including things like crypto mining, recruiting crypto investors, or receiving cash in return for crypto. You may be asked to make a payment in crypto to get started. Or scammers may send you crypto, make a deposit to your bank account, or send you a check — and then ask you to send them cash or crypto back. Their transfer, crypto or check will turn out to be worthless, leaving you on the hook for the cash or crypto you sent them.

5. Romance scams

Similar to peer-to-peer payment apps and wire transfers, crypto is a very quick way to transfer money – and it’s especially easy to hide once it’s gone.

That’s why crypto is attractive to romance scammers as a payment method. In this scam, someone pretends to become your love interest online, usually by appealing to a shared interest or some need or want they perceive you have. They are often willing to spend months or even a year building up your “relationship.”

Once you trust your online friend, they’ll ask for crypto to pay for an “emergency” or ask you to invest crypto with them. In the end, your money as well as your relationship will disappear.

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