Be careful of Cryptocurrency Scams


The digital currency that is Bitcoin has taken the world by storm. While it might not be the best investment engine around, it has enough people riding this bandwagon to make a profit or two. If you are in the financial market for any reason, Bitcoin would surely have crossed your mind.

Is it all good?

Too much has been said about Bitcoin. Some call it a scam, some said it is a bubble while others have claimed that it is the best investment option around. This digital currency has influenced all types of economic-driven people across the world and because it is money involved, there would be certain things that you need to be cautious about.

How big is this wave?

Because of all the hype that has been happening, there are now people going all out to buy them. In fact, reports have already surfaced that people are taking up loans to buy Bitcoins. Not long ago, the CBOE (Chicago Board Options Exchange) had to stop trading in Bitcoin because it was so volatile.

Cryptocurrency– Is it even safe?

A lot has been said about cryptocurrency. Analysts have already foretold that cryptography is not a safe investment because it is too volatile. But then again, when prices surge to a record high, it is difficult to keep the investors away.

With such an open concept, it will therefore come with some risks. When there is risk and money, there will surely be scammers. In fact, the volatility only makes it riskier. Cyber attacks are quite common in the Bitcoin market. This is because cryptocurrency is not protected by anybody which means there is no certain protection.

How can cryptocurrency be breached?

Typically, there are 2 major ways by which this can be done.

  1. Infrastructure – Hackers can attack the underlying infrastructure of the coin markets. In a recent report, it was stated that almost a million bitcoins were stolen since it started trading back in 2011. At the current rate, this would be around $15 billion.
  2. Investors – This is where the criminals directly aim their attacks at the investors. In fact, they will get involved with scams and some tactics that are not ethical. This is where social engineering happens. The most common types of fraud of this kind are like fake wallets, ICO (initial coin offering) fraud and others

Types of attacks you must be mindful of

Below are the few types of attacks that you should be aware of:

Initial Coin Offering (ICO) fraud

This occurs during the launch of a newly invented cryptocurrency. It is the most popular hunting ground for scammers because of its nature of being unregulated. This makes it extremely high risk. How it works here is that the criminals will create a fake ICO and outright take your money. Another way that this might happen is when they impersonate a legitimate ICO and take your money. Simple as that!


This is otherwise known as cell phone identity theft. How it works is that someone tricks the mobile phone provider into giving them control of your account. What they want here really is to gain access to your digital wallet in Malaysia. Once they have access, they will then take out all your money. If you are the one who is losing your money, there is no way you can reverse this. This has been one of the fastest growing cases in the past 5 years or so.

Fake digital wallets

As an investor, you will need to store your bitcoin in a place. Criminals will start by creating fake wallets. Many times, investors are not aware if the wallet is legitimate. A lot of homework needs to be done before you invest. Hence, checking thoroughly makes a lot of difference. Use an offline hardware wallet if possible or you might fall victim to this.


There is very specific malware in the market designed to steal Bitcoin. As about 1/3 of all computers at home across the world are installed with malware of one kind, this will surely be at the top of the minds of criminals. Malware can be designed to steal log-in information which is the most common. However, more powerful ones will involve stealing the wallet itself especially when you are carrying out some form of transaction. This has been one of the top problems with Bitcoin scams in the last 5 years.

Cryptocurrency Hacking

It is no surprise that there when you have a business online, it is bound to attract hackers. This is the very reason why there have been reports of hacking in terms of cryptocurrency exchanges. This has been happening for at least 10 years now where the millions worth of bitcoin tokens have been siphoned off by hackers. No matter how secure an exchange claims to be, they are always open to attacks. If it is tokens being siphoned or stolen, it might not affect the user. But when it devalues the tokens, the effects will be very damaging.

Cryptocurrency Phishing

Phishing is not a new form of attack. It has been one of the most prominent problems in the digital financial realm. In fact, it is still among the highest threats, especially in internet banking. In 2017 alone, 2 of the biggest stories of the tech industry had something to do with Phishing. This came from the Lazarus Group who has been known to run spear-phishing campaigns. This is the very group that hacked into Sony’s so-called ‘unbreakable’ network. In their most recent attack, it had to do with phishing in the bitcoin network. As the name implies, it is where the attacker aims to ‘fish’ information through the use of bogus websites or links.

Like any other form of attack, it will be impossible to totally evade such attacks as the will always evolve. You can, however, take note of the following:

  1. Your wallet provider usually does not send you emails. In fact, they seldom ask for your email at all
  2. Always check the spelling of the URL you are clicking into when you are visiting your exchange.
  3. There is NEVER any type of errors in the URL
  4. If you have any doubt about the spelling of the link, visit EtherScamDB to double confirm
  5. Use Etherscan or similar sites to check a token wallet address when you are sending you coins or participating in any ICO
  6. Use blockers to phase out the Phishers
  7. Wallet providers never ask you for your private key at any time. If any of them do, then it is suspicious already

So what does all this mean?

You really need a strong antivirus program installed when you are using Bitcoin. 2-factor authentication is just one of the many ways to overcome this problem. After all, the risks are all there for everyone to see. Even if there is no one trying to scam you, there will always be someone ready to cheat you. Bitcoin is big business and because it involves money, you must be extremely cautious.

Cryptocurrency Scams – 2021 Update

As we become more aware and less ignorant about what is going on in the cryptocurrency markets, the perpetrators to are becoming more creative. Reports of recent incidents have shown that scammers are upping their games since 2020 and well into 2021. In fact, they have become more intelligent and scams have already reached an all-time high since 2021 started. As at the end of April 2021, the total amount laundered through cryptocurrency scams has reached more than US$400 million. More than half of this came from DeFi scams.

For comparison, the total amount laundered in 2020 was US$1.9 billion while 2019 saw some US$4.5 billion losses reported. If the trend continues, it would not be surprising to see 2021 ending with a record surpassing these figures. Among those that have taken place in recent months include:

  • Impersonation – A group of impersonators launched a cryptocurrency scam where they posed as celebrities like Elon Musk’s firms and dishing out giveaways through telephone calls. Such scams have since embezzled close to US$2 million.
  • DeFi Scams – DeFi is short for decentralized finance where users can stake their cryptocurrencies to get better returns through a decentralized platform. Such engines have the reputation of giving very good returns while many have since used them as scams. Investors have been enjoying good success and profit return rates but this meant that scammers are also luring them into lending money and then promising high returns. They then close the accounts and keep the money.
  • NFT Scams – Non-Fungible Tokens have been extremely popular in 2020 leading into 2021. The biggest risk with NFTs is that they can be easily duplicated which means investors can be easily cheated into believing that they are paying for a genuine NFT. 
  • Altcoin Scams – this usually involves pumping and dumping of altcoins as they are cheap and easy. Like penny stocks, scammers use Altcoin by manipulating their prices.

Scammers will surely continue to use innovative ways leading into the next few years as more traders are getting into the cryptocurrency markets. This list will be updated as more scams come to light.

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