Cryptocurrency has been a new avenue for investors to achieve financial prosperity. They promise quick transactions and potentially large profits. Although the excitement for this digital currency is growing, scammers are reaping the benefit of its popularity leading to the spread of crypto scams
Scammers have turned it into a playground where they may prey on innocent and unprepared investors. Scammers often design and operate such scams to look like legitimate and popular investment platforms to investors.
Over 9 lakh scams were reported in just four months in 2024. Between January and April of this year, India lost ₹1,420 crore to 62,587 investment scams, ₹222 crore to 20,043 trading scams and over ₹100 crores in different types of investment scams. Most of these scams originated in Southeast Asia, according to the Indian Cyber Crime Coordination Centre (I4C).
Now how these scams work and how you can protect yourself from such scams. Let’s get into the detail to understand this.
How Does Crypto Scams Work?
Sana, a Delhi-based girl, received a message on WhatsApp a few months ago to post simple online hotel reviews and, in return, get quick rewards for reviewing websites.
Scammers used screenshots and fake certificates to make bank payments appear official, and the presence of others in WhatsApp and Telegram groups added to the system’s credibility.
Sana joined a review program and initially received money for reviews. After completing reviews, she was suggested was suggested to download an app using the link. By then the scammer had gained Sana’s trust.
Without any second thought, Sana downloaded the app, not having an idea that it was a clone app. The scammer then guided her to invest in cryptocurrency to get good returns on her investment.
Sana initially invested ₹20,000 which in no time grew to ₹50,000. Seeing her profits grow drastically, the greed in Sana made her invest more and eventually, she ended up investing in lakhs.
However, when she tried to withdraw, the transaction failed. She was asked to deposit more money to pay commission and platform charges. To her surprise, that amount was more than her initial investment.
She found it suspicious and finally realized she had been scammed and nearly lost 12 lakhs.
Sana is not alone who got scammed. Many other people must have been victims of such scammers and lost a huge sum of their hard-earned money.
So, such scams start from WhatsApp or Telegram where scammers add you to the group, and create inducement by showing fake profit screenshots.
Seeing the right time, he then contacts you personally and shares a link to download the clone crypto investment app which opens the gateway for losing your money.
Knowing the common types of crypto scams, recognizing red flags, and understanding how to protect yourself from such scams have become essential in this new era of digital finance.
Different Types of Crypto Scams
Here is the list of some common types of crypto scams scammers are using these days to scam naive investors:
- Phishing scams: In phishing scams, scammers generally create fake websites or send emails to trick users into providing their sensitive information by clicking on the links. Once they have access to the victim’s login details, they drain the account.
- Fake exchanges and wallets: Scammers create fake exchanges and wallet apps that look similar to legitimate ones. They even advertise these on social media and search engines to gain visibility. Once a significant amount of users deposit their funds into these exchanges and wallets, the platform disappears.
- Romance Scams: Fraudsters build online relationships with victims, through various dating apps and social media. Once the trust of the victim is gained they will introduce them to a profitable crypto investment scheme or ask for help to pay on fake crypto platforms. Victim driven by emotions and feelings, transfers funds to the scammer’s wallet ending up losing his money.
- Giveaway scams: This is where scammers claim to give away free cryptocurrency, asking users to send a small amount to verify their wallet address. But once funds are transferred, they disappear.
How to Identify Crypto Scams?
It didn’t take long for Sana to sense that something was off after depositing so much money. Unfortunately by the time she realized it, her money was already lost. Here are some red flags and hints if you face a similar situation:
- Guaranteed High Returns: No legitimate expert will ever promise you 10x, 20x or so on returns.
- Pressure to Act Quickly: In crypto scams, scammers will keep on pushing to “act now” reminding limited-time offers.
- Fake Endorsements and Testimonials: Create fake reviews on websites or even use fake videos of celebrities. Share screenshots as proof.
- Request for extra fees: Asking to pay withdrawal fees or processing charges to withdraw the profits.
How to Avoid Crypto Scams?
To protect yourself from being a victim of crypto scams, you can following steps:
- Do Thorough Research: Take time and do extensive research about credentials and public profiles.
- Use Reputable Exchanges and Wallets: Always use well-known and established exchanges and wallets with a good security track record. Avoid unknown and new exchanges.
- Verify URLs and Links: Type the website URL directly into your browser rather than clicking on links in emails or messages.
- Avoid Unknown Investment Opportunities: Verify every platform’s legitimacy and don’t fall trap of high-return schemes.
- Enable Two-Factor Authentication: This extra layer of security makes it hard for hackers to access your accounts.
How to Report Crypto Scams?
Since crypto scams are not regulated, hence you cannot report a complaint in SEBI. However, one can file an FIR against the suspect and can file a complaint in Cyber Crime.
Taking quick action helps you to get crypto scams recovery. Here are the steps you can follow to raise the concern.
- Set a password to complete the registration process.
- Log in using your username and registration.
- Choose the type of scam.
- Enter details of the scam and suspect
- Upload documents & submit.
Conclusion
In summary, scammers very cleverly try to deceive innocent and new victims who are carried away easily by such fake promises. The appeal for easy and quick money is undeniable, but one should be aware of the risk associated with such scams.
In short, be skeptical, do extensive research, and trust your instincts. Stay vigilant and cautious about sharing your bank details, passwords, OTPs, and clicking random shared links. One-click on such links can cost you in loss of all your money.
Remember the golden rule,” If something sounds too good to be true, it likely is.”
For any services related to fraud, please feel free to reach out to our fraud-free assistance services at our website.
