How To Identify And Avoid Cryptocurrency Scams

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Cryptocurrency can be complicated, and scammers love to take advantage of “complicated”. If you’ve heard of common tax scams where a person posing as the tax collector calls you up and threatens you, you’ll notice that it preys on people’s lack of knowledge about tax payment procedures.

Cryptocurrency transactions are similar, and by educating yourself to identify the telltale signs of a scam, you can protect yourself and your loved ones from being victims. Below we take a look at the three most common scams across the industry.

Giveaway Scams

The most common type of scam is a giveaway scam. These are usually in the form of forged Twitter posts, fake screenshots and doctored messages that purportedly show big companies and famous people offering to give BTC away for free.

The catch? In order for you to reserve your place or “secure” the giveaway, you have to first send them cryptocurrency! They will usually provide a wallet address where you will have to send your crypto to, and they promise to “double” it.

Even on Twitter itself, scammers are using bots to continually post fake giveaway messages under multiple Twitter profiles, usually imitating the profile picture and name of a verified account. The issue was so prevalent that Vitalik Buterin, the founder of Ethereum, had his profile name as “Vitalik NOT GIVING AWAY ETH Buterin” for the longest time.

Ways To Identify Giveaway Scams:

  • It sounds too good to be true
  • It requires you to send something first (crypto, or personal information)
  • It appears outside of the intended platform as a screenshot
  • It’s a giveaway

Investment Scams

Under the guise of an ICO, new projects or any number of trending fundraising terms, scammers have set up entire websites and communities. The scams can even be fairly difficult to detect without appropriate knowledge of cryptocurrencies - some of the websites can look even more professional than real projects.

Sometimes, these projects are run as ponzi schemes, returning real money and interest to early investors in order to build up interest and community around their scam. Typically, these scams come in the form of high-yield returns, claiming to have exclusive technology such as “cloud mining” or “trading bots”.

Ways To Identify Investment Scams:

  • It promises high yields or doubling your investment or more in weeks
  • It is not covered by any major cryptocurrency news sites
  • It is not listed as a token for trade on any major exchanges
  • It has no contact details or way to prove the people are real
  • It emphasizes technology that is too good to be true, yet has no major details

Phishing scams

Phishing scams are extremely common and often catch a user unaware. They come in the form of websites that look, feel and act like the actual website it is imitating, often to get users to key in passwords, personal details or other information that would then be used to gain access to real accounts.

In cryptocurrency, where private keys and wallets have no way to be changed or recovered, these phishing sites can cause immense damage. Once you are phished, the wallet is compromised and will likely lose all its funds in a matter of minutes.

This is why it is recommended to access websites and services through verified links, bookmarks, and always double-checking to make sure the website is secure (you can do this by checking the URL is correct with no typos or additional punctuation).

It is also advised to top of these security practices with setting up 2FA and other account protection and security mechanisms offered by the platform.

Ways To Identify Phishing Scams:

  • It’s a link you clicked from anywhere but your own bookmarks or keyed in via your address bar. Accessing important links through clicking on emails, social media and third-party websites is always a bad idea!

Third Party Scams

Be aware of scams that act as "middlemen" falsely representing a company. There are several crypto scams out there that claim to be an exchange, with similar interfaces, and allow users to create a credit/debit transaction in order to buy Bitcoin (or other cryptocurrencies). They then send the BTC to their address, leaving the client out of pocket. ExpressFX is an example of a scam broker.

Always ensure that you direct to Oobit's platform through a bookmark or your browser and do not follow any links emailed, no matter how legitimate they might appear. Please note that all credit and debit card transactions are conducted by MoonPay and there are several verification processes integrated into the action to ensure your safety on the Oobit platform.

Stay Secure, Stay With Oobit

It’s always a good idea to exercise caution when doing anything online involving personal data (from fiat banking to crypto trading). If you’d like to learn more about scams in the crypto space, see our guide on Bitcoin scams here. While most people are likely to be unaffected by these scams, it's always better to rather be safe than sorry (and educated).

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