The Most Common Crypto Scams and How to Stay Safe

One famous investing quote is “Invest in what you know.” And that may be wise. Unless you’re very knowledgeable in this relatively new, highly complex market, it might be best to hold off on diving in until you’ve gotten very familiar with the ins and outs of how cryptocurrencies and their underlying blockchain technology work.

Because digital currency operates entirely online without traditional bank protections, corporate safety nets, or central government regulations, tech-savvy scammers find it to be an absolute ideal
playground for separating everyday people from their hard-earned retirement finances and life savings. That leaves you with little to no recourse in the event of fraud, scams, or accidents.

Unlike a standard checking account, credit card, or typical wire transaction, cryptocurrency transfers are completely permanent and entirely irreversible. Once you send digital funds to an anonymous thief, that money is truly gone forever; there’s no sympathetic fraud department to call for assistance or a refund.

Fraudsters heavily exploit this unchangeable technical nature, alongside widespread public lack of knowledge about how blockchain functions, to build highly convincing financial traps. They use advanced psychological manipulation, intense high-pressure deadlines, and professional-looking smartphone applications to mimic legitimate wealth-building investment opportunities.

With these warnings out in the open, here are five prominent crypto scams to watch out for:

• Imposter trading websites. Criminals construct convincing digital clones of legitimate investment platforms or popular digital wallets to steal your private credentials and quickly drain your stored
  funds.
• Fake investment managers. Sophisticated online scammers contact targets completely out of the blue, promising to expertly manage your portfolio while guaranteeing massive, risk-free weekly
  returns.
• Romance investment scams. Bad actors build romantic trust over several weeks through popular dating applications or social media networks, eventually convincing you to invest cash in a fraudulent platform.
• Urgent phishing messages. Deceptive emails or security text alerts claim your financial account is compromised, directing you to link your digital wallet to a highly malicious website.
• Sudden project “rug pulls.” Dishonest developers invent a hyped new digital currency token, artificially drive up the price through aggressive marketing, and then suddenly disappear with all investor capital.

Jeanne D’Arc has resources to keep you in the know to defend your money and data. Visit our Fraud & Theft Protection page and subscribe to the Money Mill Blog for more information and best practices to keep your data and money safe.