Crypto scams.
You’ve just been promised the chance to strike it rich with crypto – to-the-moon profits, no risk, and the chance to get in on ‘next big thing’ in digital currency. Sounds tempting, right? Well, that’s exactly what scammers are counting on.
Cryptocurrency scams prey on the hype and excitement around cryptocurrencies, tricking you into becoming the bottom layer of a pyramid scheme-style con or shelling out hard-earned cash for phony, even non-existent digital shamcoins.
They’ll throw around more buzzwords than you can count, let alone understand – but in the end, it’s pretty simple: they want your cash.{sub-heading}
How do crypto scams work?
Crypto fraudsters thrive on urgency and pressure, getting you to act before you have a chance to think ‘could something named Poodlecoin really make me millions?’ The goal? To get you to trust them quickly and throw money into a digital abyss. Once you’re invested, they pull the rug, leaving you scrambling like eggs.
The trick is simple: they promise you the world, then vanish without a trace. And with crypto transactions being largely anonymous, it’s like chasing a ghost.
What do crypto scams look like?
So, how do these crypto scams actually play out? Picture this:
The ‘millionaire in the making’ scam.
You get a message about a ‘guaranteed’ crypto investment that’s making people rich overnight. The charts look legit, the success stories are glowing – but the moment you send your money, the scammer leaves you on read.
The vanishing crypto exchange.
You find a trading platform with slick branding and juicy returns. Everything seems fine – until you try to withdraw your funds. Suddenly, the website is gone, customer support is MIA, and so is your money.
The crypto pyramid trap.
A friend (or someone who swears they’re making a killing) convinces you to invest in a crypto fund that pays out big – if you bring in new investors. You bite. But when the money stops flowing, the whole thing crumbles, and you’re left holding the bag
Celebrity endorsements (fake, of course).
You see an ad with a big-name celeb backing a crypto project – maybe they even reach out to you personally. It looks legit, so you invest…only to realise the endorsement was fake, and the scammers just cashed in on your trust.
Spot the crypto scam red flags.
Crypto scams are sneaky and ever-changing, but there are always signs.
Here’s how to spot the red flags:
Unsolicited contact.
Did they reach out to you first? Red flag.
Unrealistic returns.
Are they promising mouth-watering wealth? Red flag.
Pressure tactics.
‘Act now to get in on the ground floor!’ Ground floor of a pyramid scheme, maybe. Red flag.
Unverifiable credentials.
Can’t find any real, verifiable information about the person, website or crypto they’re shilling for? Red flag.
Crypto jargon overload.
Don’t understand what they’re talking about? Scammers love to send your logic systems on a wild goose chase. Red flag.
Know the game.
Getting to know how they move can greatly increase your chances of getting out scot-free.
What crypto scams are out there?
Here are a few types of crypto scams that could be lurking around the corner:
And remember what your mum told you. If it sounds too good to be true, it probably is.
Crypto Ponzi schemes.
New investors’ money is used to pay off earlier investors – until it all comes crashing down.
Pump-and-dump schemes.
Scammers hype up a cryptocurrency, inflate the price, then dump their holdings, leaving you stuck with worthless coins.
Fake wallets and exchanges.
You’re lured to a website that looks real, only to discover your funds have disappeared when you try to withdraw.
Romance crypto scams.
They trick you into thinking you’ve found love, then get you to send money for a fake or phony crypto ‘opportunity’.
Protect yourself from crypto fraud.
Now that you know how crypto scams work, let’s talk about how to protect yourself:
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Research first.
Always do your research on any crypto investment. We recommend searching for the name of the crypto plus the word ‘scam’ or ‘fraud’. Any dodgy experiences from others are bound to pop up.
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Use trusted platforms.
Stick to well-known, established exchanges. All digital currency exchanges in Australia are registered with AUSTRAC, so if the AUSTRAC registration number is not listed on the exchange website, tread carefully.
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Keep your crypto private.
Don’t share your wallet keys or passwords. Never. Ever. For extra points use a private Wi-Fi network to connect to your crypto wallet.
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Get independent advice.
Before jumping into any crypto investments, speak to a financial advisor. Real advice beats a fake promise, any day.
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Don’t fall for hype.
No one can know what the ‘next big thing’ is.
At ME, we know how slick and convincing scams can be, and we’re committed to keeping
you one step ahead of fraudsters.
We keep you in the loop with up-to-date alerts on the latest scams making the rounds.
Check out our latest scam alerts to stay informed.
Knowledge is mightier than the keyboard. Something feeling a bit shady?
Visit our Protect yourself page and shine a light on it.
Have you been the target of a crypto scam?
Realising you’ve been the target of a crypto scam can be scary – but don’t panic, you’ve still got options:
Here's what to do.
Cut contact immediately
Cut ties with the scammer. Do not send any more money or share more personal details.
Report it.
Let the right people know.
ASIC (Australian Securities and Investments Commission) If the scam involved financial services.
Scamwatch To help track and prevent future scams.
Talk to usWe may be able to stop or recover transactions.
Secure your accounts.
Change passwords for all your accounts, especially those related to crypto and banking.
Stay alert.
Scammers may try again with follow-up scams. Be cautious and report any suspicious activity.