Shearing the wolves: popular cryptocurrency scams and how to spot them.

Cryptocurrency Scripts
7 min readDec 16, 2020

I first heard about bitcoin and cryptocurrencies right on the internet, 90% of my cryptocurrency knowledge comes from news and articles on the internet…and lessons from mistakes too. Regardless of where you first knew about cryptocurrency and where most of your knowledge about it comes from, a common slogan is that ‘the crypto space is a wild wild west’. Your friend who first told you about cryptocurrencies must have told you this too.

Apart from price fluctuations steaming from cryptocurrencies’ volatility, the crypto space is home to many financial threats…well, just like any other financial setting. Cryptocurrency’s technology unfortunately makes it harder to manage some of these risks.

‘Not your keys, not your wallet’, but wherever your cryptocurrencies are stored, you stand a chance of losing them. Cryptocurrency scams ranges from the popular exchange and wallet hacks to cryptocurrency ponzi schemes, exchange scams and identity theft. In any of these, the perpetrators earn a fortune, leaving their victims with huge losses of up to millions of dollars worth of cryptocurrency. Wallowing in pain, these victims seek means to recover their lost funds/token, but this is always a huge nut to crack; if that was anything near ‘easy’, victims of popular exchange hacks should have gotten their cryptocurrencies back, but those assets are still ‘on the move’.

I got scammed over a couple of times as a newbie. Regardless of your expertise, getting scammed is a general threat. Each loss thought me a lesson, any security breach or poor security practice makes you more vulnerable to technological scams. Hasty actions might expose you to socially engineered scams.

Electronic security is always breakable, smart technologies also have their own downsides. Security threats are ever evolving and scammers are constantly developing their craft. Means of breaking electronic securities are growing by the day, but socially engineered hacks are more frequent. Majority of cryptocurrency investors are here for the riches. The ‘quick money’ orientation will hardly leave the crypto space. Scammers know about this and the fact that the crypto space is home to greed.

Cryptocurrency millionaires often tell stories of how they got rich through the easiest means, “if you bought nano as railblocks, you probably made over a hundred times your investment”; statements like this gives away cryptocurrency as a ‘get rich quick’ scheme. New and even veteran investments believe in this easy money. Having such orientation and being careless with it makes one prey to scammers in the crypto space.

Here’s an insight into the most popular cryptocurrency scam and how you can spot them. Note that this is not exhaustive neither are the strategies mentioned here ‘absolute’. There are chances of exceptions…which are (very) rare.



“Hello, John Doe, I am Changpeng Zhao from Binance jersey…” Well, I guess I used a very prominent name, it is unusual for scammers to impersonate prominent names in the crypto space. But depending on their ambition, this can be possible. Impersonation scams takes a similar forms whichever way. Shady figures pretending to be a more important personnel offering you a ‘life changing opportunity’. The first scam I suffered is a similar one. A mining pool administrator…lol. I guess I was too dumb, but he was going to turn my $300 into $10,000 in just three months. I doubt if any newbie will survive such scam, lol. I fell for it, it was too good to believe, but for me ‘anything is possible in the crypto space’.

A more experienced investor will ask a few questions. If it was so easy to turn $300 into $10,000 in just ninety days, we’d have few broke people around. Impersonation scams can come in other forms. Another very popular type is scammers impersonating admins of cryptocurrency communities. For project a manager, it could be a fake listing operator, a fake partner or otherwise. Their offers are hardly unenticing and just like a smart young man, it sweeps you off your feet. The fantasies of getting rich with a little effort and the orientation that anything is possible in the crypto space leads one into this hole.

Ponzi schemes

In the earlier days of cryptocurrency, pyramid schemes were very popular, you only need to invest, make referrals and get a multiple of your initial investment. Sounds easy right and …easy does it! Pyramid schemes are a sort of unhealthy peer-to-peer donation program. The chain often breaks off on the long run and participants lose a lot. The lucky ones and the perpetrators would go on to earn multiples of their ‘investment’ while the rest nurse their loss.

Contemporary ponzi schemes are hardly pyramid schemes. Pyramid schemes are easily avoided by the prey. Most ponzi schemes disguise themselves as staking pools with very high APR, say 500% annual ROI. Tasty, huh? Legitimate projects hardly boasts of 50% APR. Any shady staking or mining pool promising anything higher than this needs more scrutiny before putting your money on the road. Well, risks and rewards are brothers; but their relationship is a toxic one.

’Money doublers’

Even outside the crypto space, money doubling is a common scam. But, not to worry, just send me 0.5btc and I will send 5btc back…
Sometimes I find it hard to believe that anyone actually fall for scams like this. Unfortunately scams like this are one of the top earners. In reported cases, the perpetrators combine impersonation and money doubling promises to lure their victims. Most popular example is the most recent twitter hack that razed the cryptocurrency community. The hackers who managed to get access to twitter profiles of some popular personalities made money doubling promises which surely got the attention of many ‘gullible ones’. I’ll hardly call them gullible, I mean, that was Jeff Bezos making those promises…lol

Phishing Attacks


Your email spam folder is probably filled with some automatically sorted emails, your email service provider might have just protected you from a phishing scam. The internet is filled with phishing links, in the guise of website links. Hackers are also able to obtain details stored on your device through special links which breaks through your device permissions and gives away vital details stored on your device. Most phishing links redirects to websites requiring some personal details. To stay safer, always determine the authenticity of links presented to you. If looks fishy, then you are about to get Phished…lol.

Shady projects

Bitcoin maximalists would argue that most altcoin projects, especially ICOs and Pre-mines are scams. Depending on the context, they are right. On a frank review, they are not absolutely right. While a good number of altcoin projects have displayed unhealthy behaviours and played on their investors’ trust; decent altcoin projects have done very differently.

Well, in this case, it is not just altcoin projects. A lot of shady projects fill up the crypto space. These projects are dern and suspicious with majority of their actions. An ambiguous whitepaper, a hardly feasible use-case and so much hype marketing. A good project easily sells itself; inferior projects spend much time on marketing. Investors buying into this fall into their bull-trap and hardly survives without a loss. As an investor it is hard to spot and avoid projects like this, but a good research keeps you ‘safer’.

Aforementioned, this list is not exhaustive. Hundreds of cryptocurrency scam targeted at holders and investors as well as traders exists and grows every day. ‘Don’t trust, verify’; authenticity first. Spend a few minutes to ask yourself how feasible these promises are. If they look feasible to you, why not ask others, they should say the same thing if it really sounds feasible to them.


Strategies used to break into user accounts and exploit the innate greed are ever evolving, everyday births a new way to get to break into ‘secured’ profiles, looking out for existing and emerging means of scamming investors, taking precautions to stay safe from them by applying advised security measures is the most effective way to protect your funds and stay safer in the internet.

Follow me for more!

Well, you can just catch my tweets!