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Cryptocurrency Fraud


The growing popularity of cryptocurrencies has led to the fact that not only enthusiasts and ordinary users, but also criminals have become interested in them. Unfortunately, a variety of fraudsters will happily use some characteristics of the cryptocurrencies, such as irreversibility of transactions, difficulty in tracking and anonymity. So many of the usual schemes have been converted to use cryptocurrency. And we would like to tell you about them.

Social media fraud

Social networks have taken a rather important role in the life of our society, so no one is particularly surprised by the fact that many people are willing to pay real money for likes and reposts. Or, for example, arrange distribution of money or other resources to attract popularity to themselves. And one of the fraudulent schemes with use of cryptocurrencies was created exactly for this kind of cases.

The purpose is simple - a so-called "giveaway" is announced from a seemingly well-known account. But only among those who send 1 BTC / BCH / ETH / LTC to a specific number. But as a result, he is almost guaranteed to receive 10 times more! The guarantee of this is the good name and respect of the distributor.

Only on closer inspection it becomes clear that the "distribution" is carried out not from the original account, but from its exact copy. Is it worth clarifying that you won't receive anything and will loose your money? The Internet scheme, old as the network itself, used in the "Nigerian letters", has been adapted to modern realities.

The easiest way to get around this scam is not to participate in giveaways, which require an initial transfer of money to some unknown account. Just don't become a victim of your own greed.

Financial pyramids and Ponzi scheme

These techniques are similar to each other, but there are some differences between them, so it is worth describing them separately.

Ponzi sheme. The point is simple. There is a certain system that offer users a guaranteed return on investment. You can deposit, for example, 100 Litecoins, and in a month you get 110. It seems to be an excellent investment. Yes, but only for old members of this scheme.

The fact is that the only money this project has at its disposal is investments from interested parties. In order to fulfill the promise, the organizer of the Ponzi scheme must constantly attract new investors. Positive feedback from old investors contributes to this. But at a certain moment, when there are too many new participants, the project simply disappears with all the money.

Financial pyramid. An advanced version of the Ponzi scheme, since it is not the organizer who is looking for new investors, but the participants themselves. Each element of such a pyramid will receive money for each new participant attracted. Part of the amount, in this case, is transferred to the top. Therefore, those at the top of the pyramid have a steady stream of income. And those who are in the base are forced to look for new customers themselves, in order to, at least, recapture the initial investments.

Due to the exponential growth of participants, such a system cannot exist for a long time. A third-party inflow of resources makes it a little more stable - for example, attracting new participants gives them the right to sell something relatively useful - cosmetics, household appliances, etc. But this is the so-called "multi-level network marketing", which, although it resembles a financial pyramid, but unlike it, is not prohibited.

So, in the field of blockchain technologies projects that are very reminiscent of similar pyramids are already appearing - OneCoin, Bitconnect and PlusToken. Lawsuits have already been filed against them, but the case is moving slowly.

Fake mobile apps

Inattentive users can download fake applications that imitate the original ones, which are necessary to access various cryptocurrency exchanges or similar services. However, instead of real work, they collect personal data and supply fake addresses for transferring funds.

The problem is aggravated by the fact that some of these apps have a fairly high rating in the Apple Store or Google Play, as well as a lot of positive reviews. Alas, these platforms are not always responsible for the quality and legality of the product posted on them. Therefore, the easiest way to bypass this scam is to download mobile applications only from official and secure sites.


Pulling personal information from users using social engineering methods. There are many options here - from letters supposedly from real people and companies leading to a fake site that thoroughly copies the real one, to personal messages in telegram channels from people pretending to be technical support representatives of various services working with cryptocurrency. The bottom line is that you will be required to enter personal data that provides access to your account, mail or cryptocurrency wallet.

To avoid the problems associated with phishing, there are a few important things to remember.

  • Always check the URLs of the sites you visit. And for the presence of secure data transfer protocols there.
  • Use bookmarks to access your most frequently used sites. Search by words can display fake, but actively paid ones.
  • If you have any suspicions about the messages, ignore them. Or contact the contact information provided on the official and protected resources.
  • If someone asks for your private key or seed phrase, it's most likely a scammer.

Imitation of famous personalities and projects

Fraudsters can pretend to be famous people or representatives of well-known organizations in order to agitate on their behalf to invest in their fraudulent projects. And in some cases, they just pay such people for recommendations, which, however, does not make projects more reliable.

The tactic "Do your own research" helps to protect yourself from such exposure. Literally - "Do your personal research" or "think with your own head." The point is simple - do not take the word of authorities, no matter how convincing they may be. Always check what they say. In the context of projects related to cryptocurrencies, special attention should be paid to the following points:

  • How and by whom exactly is the distribution of coins carried out?
  • Whether the vast majority of tokens or coins are in the hands of one or more large organizations.
  • Is the project unique, and if so, what exactly is the uniqueness? If not, how is it superior to its counterparts?
  • Who is implementing this project? Are there really experienced developers on the team? Specific names, titles, projects created.
  • Why do we need tokens or coins in this project at all?


There are many fraud tactics out there. From simple ones based on user carelessness to more complex ones using software. And the only way to somehow protect yourself from all this is to know about such criminal schemes. And worry about your own digital security by yourself.