Understanding Crypto - Recognizing scams

It would be fair to compare crypto assets with real-life coins made of metal - neither of them have your name written on them. The one who has the coin in his wallet is the one who owns it. That is why scammers absolutely love crypto assets, creating many creative ways to steal them. In this article we will examine those scams that the average crypto owner is most likely to experience.

The “Giveaway” scam

In 2020 hackers gained access to a large number of popular Twitter accounts. Among the hacked were Bill Gates, Elon Musk, Warren Buffett and many more. All of these accounts then tweeted something along the lines of “I am giving back to society! If you send me 1000 dollars in 30 minutes, I will send you 2000 dollars back!” Many people sent their funds, thinking that these wealthy men have suddenly decided that they hate money. Many transactions were stopped by the exchanges, but many, sadly, got through.

What should you do?

First, be more suspicious. Why is a billionaire suddenly giving away money? Why do they need you to send 1000 dollars to them first? Why is it so urgent? Understand that if a billionaire would ever do that, not only would all the tax agencies hold an audit of their accounts, but their Twitter feed would forever be clogged with beggars wanting more “free” money. They know that and would never do this. Whenever a rich person decides to give money away, he does it through charity organizations with an army of lawyers, not through their Twitter accounts.

The “cloned account” scam

This scam is only really possible in the digital age. A scammer enters a Facebook or Telegram group the victim is in and looks at the profiles of administrators. They take their name, their picture and everything else to clone the profile. Now, when the victim asks a question in the group, the scammer enters their private window and offers help. Each scammer has their own style, but the goal is always the same - to either get the victim’s private information or to convince them to transfer money.

They can pretend that, to solve the issue, they need to know the victim's full name, email and account password. They can demand 20 dollars to “prove your identity”. They can even pretend to be a close friend who needs an urgent surgery.

What should you do?

Always check the username. The name “Jeremy” looks really similar to “Jerermy”, depending on the font. Or even better, just ask another administrator in the group who is an active participant in discussions. And they will always tell you: “We will never ask you for your password or to send money. Never.” If anyone ever asks for your personal information, you can always say “I do not trust you enough to share it with you.” That is a completely normal answer and no one will be insulted.

If your friend suddenly sends you a message asking for money, call him on his phone. Demand a voice call or a video chat. If a CEO of a company asks you for your password, tell him you do not trust him enough and send a message to someone else in the company or to the email placed on their webpage. If your favorite company does something strange on Facebook, check if it is a cloned profile or if the account has been hacked. And always report these scammers so they can get banned.


A blackmail scam usually starts with the scammer claiming that he has obtained some compromising material about the victim. As these emails are being sent to a lot of people at the same time, they have to contain something that most people are guilty of and would like to keep as a secret. So they will claim that they know which pornographic websites the victim has visited or that they have their nude pictures. Then they threaten to send these materials to all the contacts in their email and Facebook account, unless the victim sends them money.

What should you do?

If you have already opened an unknown email, read it carefully. See how many of the things stated would apply to everyone in the world, not just you. See that the email has no specific details and avoids mentioning the names of the websites or the nature of pictures they claim to have. They just throw out a wide net and hope that the victims will scare themselves into a panic and then send money.

This is another reason why you should be careful with your personal information. If you publish a lot about your life, it is easier to create a targeted email just for you. Mentioning the name of your spouse or where you were on a vacation last year. In the end, it doesn’t even matter if the blackmail is real or just a spam email. Always contact the police and let them sort it out.

Malicious software

Very often various links are spammed in various groups. Some of them are shortened urls, some are descriptive like “Cryptocoinsfortrade.net”. Some even pretend to be well-known websites, misspelled like “Facbook” or “Gooogle”. Now, you might immediately recognize that it is a scam, but still enter the link out of curiosity. Just to know how the scam works. You look at the website, see nothing interesting and leave.

The problem is that your computer might now be infected with malicious software. A program that runs in the background and reads everything that you do. Sometimes it writes down all your login information and sends it to scammers. Sometimes it changes all the wallet addresses you copy to the address of the scammers. So that whenever you send someone coins, the scammers get them instead.

What should you do?

First things first - use an antivirus. This is one of the times when simple caution will not save anyone. Sometimes a person misclicks and enters the site, sometimes a link gets sent from a trusted person whose account has been hacked. There are even cases when hackers crack open a reputable website and insert their malicious code without the website owners even knowing. Even if you are careful with links, you still need a good antivirus and regular virus scans.

Modified hardware wallets

So you probably know by now that hardware wallets are safer, we already wrote about it. What you might not know is that you have to be careful when buying a hardware wallet. Scammers are selling modified wallets to unsuspecting customers. They either know the password of the wallet and can use it when it is connected to your computer, or they have actually installed tools on it that automatically send your cryptocurrency to their own wallet.

What should you do?

Never buy a wallet from a lesser known company. Scammers can afford to sell it to you for such a low price, as they will steal much more from your account. And never buy used wallets. That means that the previous owner already knows the secret passcode. Maybe he won’t use it instantly, but change his mind in 2 years, you can never know. Only buy wallets from reputable companies.

Just like real life

In the end, all these scams seem rather silly if you imagine them happening on the street. How often does someone approach you and say that they will give you 10 dollars right now if you give them 5? Would you do it? If someone invited you to a suspicious address, because there is money lying on the ground, would you go there just to see what is going on? And if a person told you that he knows “an unspecified secret” about you, wouldn’t you demand more details?

The scammers know you know all this. That is why they will always create a false sense of urgency and a need to act. But there is rarely anything that is so urgent and can be solved by sending cryptocurrencies. So keep that in mind and always ask other people if unsure what is going on.

If you have any questions about the topic or want to suggest a new one, please write an email to [email protected].