Types of scams in the cryptocurrency market

Rug pull

This kind of scam has become one of the most common scams that people who make crypto projects like the most. Chainalysis says that more than a third of the $7.7 billion in cryptocurrencies stolen from users in 2021 was due to “rug pull” projects.

To “pull the rug out from under” someone is to “rug pull.” The plan is for project developers to attract investors with a popular and trending projects like NFT and “pump up” the value of the cryptocurrency, making it worth a lot more. After getting enough money, the company goes away, the website stops working, social media accounts are deleted, and the token’s value drops to almost nothing.

The Dragoma project was an example of a rug pull. It was supposed to be a Web3 adventure game that used NFT and social media. The people who made Dragoma stole about $3.5 million, which caused the project’s DMA token to drop by 99.9%.

Ponzi scheme

A Ponzi scheme is when a crypto project doesn’t have any assets to back it up. At first, the people who make the project find investors. They then use the money from the new investors to pay other investors, Like most other scams, people who run Ponzi schemes promise big profits with little risk, but in the end, only the people who started the crypto scheme make a lot of money.

Voyager Digital, a cryptocurrency broker, filed for bankruptcy on July 5 and stopped accepting deposits, trading, and withdrawals on its platform on July 1. More than 100,000 lost their money. High-interest rates and easy access to credit that people couldn’t get from traditional banks drew people to the platform. The company went bankrupt because of the collapse of the cryptocurrency market in May, when TerraUSD got de-pegged from the U.S. dollar.

Mark Cuban, the billionaire owner of the Dallas Mavericks and a Shark Tank investor, was accused by investors in the middle of August of working with Voyager Digital. In the lawsuit, it is said that Cuban and Voyager CEO Steven Ehrlich talked to investors directly, including through the Dallas Mavericks, to get money for the platform. Americans lost more than $5 billion because of what these people did.

Phishing Attack

Phishing is one of the oldest ways to steal money in the cryptocurrency market. Users of a platform get emails with malicious links, and when clicked, give away their personal information, including information about their cryptocurrency.

A recent example of a phishing attack was a fake uniswap website made to look like Uniswap V3. Users wallets were filled with fake UniswapLP tokens. Then, they had to click a link to trade them for tokens made by the protocol. The thieves were able to get away with $4.7 million.

This could also involve giving something away. This is another easy way to get information about investors who own cryptocurrency wallets. This kind of scam is common on social media networks, where people promise to give away cryptocurrency for free. You have to click on a link and enter your information on a fake site to get the coins (of course, those who want to get free cryptocurrency do not know about it). Scammers might also ask for money to verify the account.

Scammers often use fake celebrity accounts to draw more attention to giveaways.

As an example, there was a scam on the cryptocurrency platform TON that tried to trick people into buying Pavel Durov’s Gram coin. There were many companies around it that wanted to make money from the coin’s growing popularity. Before the official start of sales at ton-ico.com, a mail was sent to people who were interested that they could buy GRAMs for $0.15 if they bought at least 50,000 GRAMs. The site had all the bio of the real project team.

The people who owned ton-gram.io also used a similar scheme to make $30,000. And $5 million was stolen from Gramtoken.io users. It had paid ads on Facebook and secret documents from the official TON project.

Crypto Investment schemes

One of the easiest ways to trick people is to tell them to invest in cryptocurrencies. Scammers say they are investment managers with a lot of experience and profits, and they convince potential investors that their money will earn a lot of money. Fraudsters ask for personal identification information to steal deposited funds and sometimes even get access to an investor’s cryptocurrency.

Also, it’s interesting that con artists often manage to get more than just a one-time payment and keep fooling investors who don’t know much about business.

Crypto exchange scam

It is well known that trading conditions on popular centralised crypto exchanges are far from ideal because they charge high commissions for reliability and a wide range of services. Because of this, many traders and investors who are just starting out look for better deals and end up in scams. Some scammers also try to get people to sign up for an exchange by saying they will give them free cryptocurrency if they do so.

ICO Crypto scam

Today, almost anyone can start their own project with a native token and hold an initial coin offering (ICO). So, there are a lot of fake ICOs than there used to be. Team members and technical documents can be made up or taken from other projects that are doing things right.

In ICOs crypto scams, the “Pump and Dump” scheme is often used. Cryptocurrency owners raise the price artificially so they can sell the coin at its highest point. This is done with the help of false claims and hot topics. For example, the pay-to-play token Squid Game (SQUID) came out when the South Korean TV show “Squid Game” was at its most popular. The people in charge of the project gave token holders the chance to play an online game. Fraudsters made $3 million in less than two weeks. In one day, the people who made the project sold everything they had, and the value of SQUID went down to zero.

Cloud mining Scam

It’s important to know that cloud mining is not a scam itself. But there are scammers who bring investors to the platform and convince them to pay money upfront to ensure a steady flow of power and mining rewards. As you might have guessed, these sites don’t offer bonuses after the first deposit.

Geniuses at Work Corporation Miners was a big mining project (GAW Miners). The company rented out and sold Hashlet miners that were only digital. At first, investors got a lot of money back from their investments. So, the company got a loyal following.

At the height of its popularity, the platform made the PayCoin altcoin (XPY) and the PayBase service, which was meant to be the cryptocurrency equivalent of Visa/MasterCard. Because customers were loyal, the token started to grow steadily. But investors’ hopes were not met because the price of altcoins did not reach the $20 that was promised. The PayBase payment service also failed, and PayCoin’s creator, Joshua Garza, went to jail for almost two years.

Social engineering Attack


With this kind of scam, stealing money takes longer. Fraudsters have to earn the trust of the person who owns the cryptocurrency. To do this, they often pretend to be a government agency, a well-known company, a technical support service, or even a friend or colleague. The goal is to get the “victim” to give personal information so that the scammer can steal money from them or get them to send money to their wallet.

Dating sites scam

Surprisingly, you can also get ripped off on dating sites. If you like someone and he says he can help you invest but you have to send him money or cryptocurrency first, he is probably trying to scam you. Even if you love someone, don’t send them money.

https://altcoin.ng/most-common-scams-in-the-cryptocurrency-market/

Such an educative write up. Everyone sure needs that trading platform that gives peace of mind, and yellow card app is up to the task.

Thank you the information
I should apply this in crypto dealings going forward.

That crypto exchange scams in popular on many platforms. That’s why I advice everyone to always use trusted crypto exchange for your trade since they use escrow.

Kayconcept2:
Such an educative write up. Everyone sure needs that trading platform that gives peace of mind, and yellow card app is up to the task.

pls how does this yellow card work