How To Avoid Cryptocurrency Scams
There are several actions you can take to avoid being scammed. If you notice any of the signs, you shouldn't click on any links, dial a phone number, contact them in any way, or send them money. Additionally:
Ignore requests to give out your private cryptocurrency keys. Those keys control your crypto and wallet access, and no one needs them in a legitimate cryptocurrency transaction.
Ignore promises that you'll make lots of money.
Ignore investment managers who contact you and say they can grow your money quickly.
Ignore celebrities—a celebrity will not contact people about buying cryptocurrency.
Meet your romantic interests in person before giving them money if you're using an online dating website or app.
Ignore text messages and emails from well-known or new companies, saying your account is frozen or they are worried about it.
If you receive an email, text, or social media message from a government, law enforcement agency, or utility company stating your accounts or assets are frozen, and you'll need to send crypto or money, contact the agency and ignore the message.
Ignore job listings to be a cash-to-crypto converter or crypto miner.
Do not fall for claims about explicit material they have of you that they will post unless you send cryptocurrency, and report it.
Don't accept "free" money or crypto.
How To Report Cryptocurrency Scams
Several organizations exist that can help you if you're a victim of a cryptocurrency scam or suspect one. Use their online complaint forms to seek help:
FTC fraud report
Commodities Futures Trading Commission complaints and tips
U.S. Securities and Exchange Commission fraud reporting
FBI Internet Crime Complaint Center complaint
You can also contact the crypto exchange you use. They might have fraud prevention or other measures in place to protect your crypto assets and money.
What Are Common Bitcoin Scams?
The most common scams are rug pulls, romance, phishing, and investment schemes.
Can You Get Scammed If Someone Sends You Bitcoin?
You shouldn't accept transactions you don't know about. With that in mind, the only way someone can steal your crypto is if you give it to them in a well-planned scam, you give them the keys, or if they hack your wallet and steal your keys.
How Do I Avoid Getting Scammed With Bitcoin?
The best way to avoid being scammed is to be aware of scammers' techniques and remain alert. Know the signs of the scams, and secure your keys outside your wallet in cold storage.
The Bottom Line
For many people, the mad rush into cryptocurrencies has evoked feelings of the Wild West. As the crypto ecosystem gains scale and complexity, it will undoubtedly remain a focal point for scammers.
Crypto scams generally fall into two categories: socially engineered initiatives to obtain account or security information, and having a target send cryptocurrency to a comprised digital wallet.
By understanding the common ways that scammers try to steal your information (and ultimately your money), you should be able to spot a crypto-related scam early and prevent it from happening to you.
Investing in cryptocurrencies and other Initial Coin Offerings (“ICOs”) is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or other ICOs. Because each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein.