Cryptocurrency scams have become more prevalent in recent years as the popularity of bitcoin and other cryptocurrencies has increased. Scammers use a variety of methods to trick people into giving away their cryptocurrency, including fake celebrity giveaways, apps that steal personal information, and fraudulent bitcoin investment schemes.
The malicious intent behind a cryptocurrency scam is to defraud potential investors and users out of their assets, just like any other scam. No matter the plan of attack, these approaches take advantage of crypto’s unique capabilities.
Types of Crypto Scams
The types of cryptocurrency scams run the gauntlet. Some exploit the hype culture surrounding crypto, while others use more typical cyberattack approaches to exploit the human element. Others go old-school, using techniques that existed even before the invention of the first computer.
Ponzi Schemes
Ponzi schemes, impersonation scams, and fake giveaways are some of the top types of cryptocurrency scams that continue to lure unsuspecting victims. Ponzi schemes attract investors by promising unrealistically high returns on bitcoin investment schemes.
Impersonation Scams
Impersonation scams often use celebrities or celebrity endorsements to trick users into downloading malicious apps or providing personal information. Fake giveaway scams offer attractive rewards for participating in contests but require payment first, which is a red flag.
Exit Scams
Exit scams take advantage of hype by promising significant returns and sky-high profits, but the creators of these cryptocurrency scams take the money and run, and because crypto functions in an anonymous space, they can hide with the money forever.
Initial Coin Offering Scams (ICOs)
Here, creators gather up investments and use the excitement to inflate purchases to sky-high prices. Then, they sell all their coins to enthusiastic buyers — dumping the coins — and disappear. Meanwhile, the new holders end up with a currency whose value plummets as buyers realize they’ve been duped.
Rug Pulls
describe any exciting tech or investment opportunity where the scammers attract major investors and then bail. The investors gain nothing, and they have no recourse, given that crypto transfers are permanent. These scams can also include Ponzi schemes, in which scammers promise additional rewards in exchange for more recruitment. In either case, fraudsters can use celebrity endorsements to drum up hype and maximize the number of victims.
Phishing Scams
Crypto phishing scams work the same way as other cyberattacks. The scammer impersonates a legitimate website or service and requests account information. The request often uses a pretense, such as security updates or a fee request from a common service, to encourage the victim to comply.
False Pretense
Criminals who operate under false pretenses claim to sell goods or services online and accept crypto as payment, and after the payment is sent, they take it and bolt. Most cut off communication afterward unless they believe they can extract more money from the victim.
Crypto Variants
Should all else fail, scammers can still use tried-and-true techniques and require payment in irreversible and anonymous crypto transactions to better cover their tracks. These scams include classic romance and employment scams.
How Bolster Can Help Combat Cryptocurrency Scams
Bolster’s phishing detection and takedown solution and other defensive strategies will ensure your company helps protect your network of employees, customers, and prospects from cryptocurrency scams. Bolster balances domain acquisition with monitoring to reduce the likelihood of cyberattacks, combat fraudulent domains and cryptocurrency scammers, and manage security costs.
Additionally, Bolster will remain proactive and monitor the security threat landscape to keep your domain safeguarded. With Bolster’s help, your brand’s reputation will remain protected.
Request a demo of our phishing detection software today to see what phishing attacks we detect for your organization.
Also, check out our community tool CheckPhish
