What Are Common Crypto Trading Scams

Considering the anonymity of cryptocurrencies and the astronomical prices that come with some of them, it should not be surprising that this market is filled with a large number of scammers. When getting into crypto you will meet different types of crypto scammers who operate in many different ways. As such, you should inform yourself of the potential scams out there.

In this guide, we will be taking a look at some of these scams and telling you how to avoid them.

Impostor Websites

One of the most common scams out there is when scammers create an exact copy of an existing crypto website and try to find unsuspecting victims who don’t pay too much attention to the website URL. Impostor websites are exact copies of original websites, meaning that, for example, a scammer can create a website that looks exactly like Binance but make a slight altercation to the URL and try to get people to visit this website. Once someone visits this website, scammers are counting on the fact that the person does not have a Binance account, and if they create an account and deposit funds, in reality, these people are getting nothing while scammers are taking all the money that you deposit.

This is a common scamming method and avoiding it is really easy. The first piece of advice we would give you is never to create an account on a crypto exchange or even try to log in to your existing account if you arrived at this website through a link placed on another website or sent to you via email. Most of the time you will see links embedded within different articles that take you to different websites, once there, people tend to not pay attention to the URL if everything looks normal, and this is when scammers strike. But of course, not every link is a scam link, and they actually might take you to the real website, therefore, if you visit a website through another website, always double-check the URL and make sure you are on the correct page. Most scammers make very minor changes, such as changing the places of two letters in the site name, replacing the letter “o” with a zero, and so on. Because of this, always read the URL really carefully before taking any actions on these sites.

Fake Trading Tools

Most of the people who join the crypto market are inexperienced traders, so these traders are always looking for different tools that will help them trade more effectively and profitably. Scammers know this very well and they try to take advantage of these people through fake tools. There are plenty of different websites that will try to sell you automated trading robots, signal providers, and other similar tools for very attractive prices. But if these websites are run by scammers, in reality, you will be getting either nothing or a very poorly built tool that will make you lose money instead of gaining anything.

To avoid falling victim to this type of scam, always do some proper research on the company that is selling these tools. If this provider is actually a legitimate company, they will have social media accounts that you can check out, and positive ratings on consumer review sites. But making the decision based on social media and reviews alone is not enough, you should also visit different forums where traders gather and ask if someone has dealt with this company to see if they are legit or fake. Once you get a sufficient answer, then you can go ahead and purchase these tools. You should also look out for fake URLs in this case as well because you might be thinking that you are buying from a real provider following your research, but it could be on a fake website merely posing as the legit one.

Famous people impersonator

If you have been on websites such as Youtube, Facebook, and TikTok throughout the last year, you have probably stumbled upon videos or streams from people such as Elon Musk. In these streams, famous people usually discuss crypto and blockchain technologies, and most of the time they have an ongoing giveaway where they tell you to send us crypto and we will send you back double the amount. While these streams look obviously fake, there are still people who fall victim to these scams, as they see successful people who have managed to make a lot of money giving them advice and opportunities to win something.

In reality, these are pre-recorded videos that are then streamed as live videos trying to fool unsuspecting people who wish to listen to famous investors and traders discussing crypto. In the case of Elon Musk, who is the most commonly used person by scammers, he has discussed crypto and blockchain in many different podcasts, talk shows, events, and more, therefore there are hundreds of hours of materials for scammers to use. Our suggestion to avoid these types of scams is that you should follow the adage, “if it sounds too good to be true, it probably is”. No one is going to give you free money, and if someone was actually to do it, they would not ask you to send them some crypto in the first place. You can still listen to these live streams as sometimes topics that are discussed are actually very interesting, but never believe these giveaways.

Cold Calling

Now, most of you probably know what cold calling is, but for those that don’t know, cold calling is a business strategy where businesses are calling random people who, prior to the call, never had any contacts with the business, and these businesses then try to sell their product to these random people.

As you can see, this is something that scammers can easily exploit, and it is probably the biggest crypto scam out there, with some scam companies having whole buildings under their operation. In case of cold calling scams, you will be called by someone, who most likely will have an accent, or at least will not sound like someone who is a native English speaker. These scammers will then try to convince you that there is a great crypto investment possibility and will try to make you invest money. Another form of this kind of scam involves the caller trying to get you to pay for crypto educational materials, saying that the material is free if you just invest some small amount of cash first. While younger generations might not fall victim to these scams as easily, those that grew up with phone calls rather than texts are prime targets of these scammers. These callers are very experienced and they have scripts that they follow, meaning that even if you don’t believe them at first if you go into a conversation with them, they might persuade you to invest.

The best way to avoid this type of scam is to never go into communication with them, and as soon as you hear some random caller offering you a good investment opportunity over the phone, just hang up. These scammers are usually from third-world countries and make international calls using fake numbers, so the likelihood that they will call you from a foreign number is high.

Help providers

Help providers are scammers who create services where they try to help you return crypto that was stolen from you by someone else. These scammers know that if you were scammed once, there is always a possibility that you can be scammed a second time, especially when you are desperate to return your previously stolen funds, and might not pay attention to some details. These scammers sometimes work with other types of scammers, where they are provided with information about someone who was scammed and then tries to randomly offer their services to them. They also go through different social media websites and are looking for people complaining that they have been scammed. But avoiding these scammers is pretty easy. Firstly, if this helper is a person and not a company, listen to what he has to say, and if he asks you for your security phrase, asks to access your computer, to send him something, or anything of that sort, just block him. If it is a company, do a background check, and ask around if someone had ever dealt with them before, and only after you are sure that they are legit, it might be safe to start working with them.

All-in-all it’s best just to avoid these types of companies and people altogether. Cryptocurrency transactions are pretty much impossible to reverse, meaning that if someone scammed you, the only way to get the money back is to file a police report and hope for a miracle that this person will actually get arrested. Other than this, there are pretty much zero chances of returning stolen tokens.

Fake Tokens

This scam will not affect you if you are trading on big crypto exchanges, but if you use decentralized exchanges or exchanges that have thousands of tokens available for trading, fake cryptocurrencies are something to look out for. As we know there are more than 20,000 cryptocurrencies out there, with the majority of them being worthless small tokens that people have created just for fun. But there are also cryptocurrencies that try to show themselves as different cryptocurrencies and trick people into believing that they are purchasing a legit and desirable token.

Every major crypto exchange such as Binance and Coinbase doesn’t add any cryptocurrency to their exchange without having them screened and evaluated, to make sure that they are worth adding to their trading platforms. But there are a bunch of small centralized and decentralized exchanges that don’t take this much care with this subject and they add almost any crypto submitted to the exchange, with some exchanges even giving people the ability to straight up add any crypto they create to the exchange. Because of this, scammers started to create fake cryptocurrencies and these tokens have the same icons as real ones and have very similar names. Considering that cryptocurrencies are volatile assets, whenever an unsuspecting victim sees BNB selling for a fraction of the price they might think they hit a gold mine and prices are messed up for a short period of time. Since there is a fear that this will get fixed soon, some don’t pay attention to what they are buying and end up purchasing fake cryptos thinking that they are buying real ones. This is one of the easiest scams to avoid, by simply trading on big crypto exchanges. If you prefer to trade on exchanges that have thousands of cryptocurrencies, then follow a simple logic, if it looks too good to be true, it probably is. Whenever you are buying a cryptocurrency from these types of exchanges, always double-check that you are buying a legit crypto, by looking at the name of the token and the trading volume it has.

Final thoughts on crypto trading scams

Cryptocurrencies have become a hotbed for scammers who want to make a lot of money. Being largely unregulated and with a good level of anonymity, cryptocurrencies are one of the easiest assets that scammers can use to gain enormous wealth. There are many different types of scammers using a wide range of different scams. Because of this, it is important to be on the alert when trading with cryptocurrencies, and for that, always trade on a reputable crypto trading platform, keep an eye on the links and make sure you are on the correct website. It is also crucial to never believe anyone blindly, and if something seems too good to be true, it probably is.

As we mentioned, cryptocurrencies carry a certain level of anonymity, so if you were to be scammed the possibility of you getting your funds back is very slim. These changes become even lower if you were using a non-custodial wallet and someone gained access to your private key. Because of this, always double and even triple-check everything before making any crypto transactions or giving someone any sort of information relating to your wallet.

FAQs on common crypto trading scams

What is the most common crypto trading scam?

The most common crypto trading scam out there is fake websites and trading tools. The internet is filled with fake crypto exchanges, some showing themselves as other reputable exchanges, so be careful. Cold calls also play a big part in the crypto scamming industry, so never do any business over the phone when it comes to crypto.

How to avoid crypto scams

The best way to avoid being scammed when trading crypto is to double-check everything and don’t believe strangers on the internet or the phone. Every time you visit an exchange, double-check the URL and make sure you are on the real one. Also, if someone offers a good investment opportunity, never believe them, as no one will give out that kind of information for free. Simply learn how the crypto market works and trade with a reputable exchange on your own, or with some trading tools acquired from a reputable provider.