Crime in the cryptocurrency arena has increased from 2021 to now. Crypto scams have accounted for over a billion-dollars in losses to more than 46,000 people. Victims are being caught by these scammers through fake ads, posts, or messages on different social media platforms. Knowledge about these scams will help you better protect yourself. Here are 5 crypto scams that have been a major problem in 2022.  

Pump and Dump Scams

Without the regulations used in the stocks traded on major U.S. exchanges, the ‘Pump and Dump” scheme is being used as one of the crypto scams. For this scam, a group owns a specific asset, such as digital currency, that they promote as a great investment. Then, unsuspecting investors begin to buy up the cryptocurrency. The group of scammers then sell off their shares at high prices and the other unknowing investors will be hit by heavy losses. When looking to invest, make sure to do your research and don’t go by a promotion.   

ICO Scams

Investors are looking to get involved with the next big thing. ICO, initial coin offerings, is a way for business projects to acquire funding before hitting it big. The investors are promised returns at a later stage in the business plan. With the ICO scams, the investors send money to the scammers for their business, but it is fake, and their money is lost.  

Romance Scams

Scammers are going straight to the heart with this crypto scam. Fraudsters are setting up fake dating accounts to lure victims and gain their trust through a fake love connection. They build trust through continued communication over online messaging. Once the trust has been solidified, the scammer brings up how to get huge gains through cryptocurrency markets. The mark is convinced to follow the scammer’s investment advice. The victim’s money is lost because the scammer uses phony crypto sites to steal from their victim. When the money dries up, the scammer moves on to their next target.

Airdrop Crypto Scams

This scam is when tokens are dropped into your digital wallet as a reward for taking a specific action with a platform. When you choose to exchange the airdropped token, you give the hacker access to your digital wallet. The scammer then goes into your wallet and steals your information. 

Crypto Giveaway Scams

Another crypto scam causing billions of dollars to be lost is crypto giveaway fraud. In the scam, the fraudster convinces the investor that a major cryptocurrency exchange or celebrity is holding a giveaway. To be a part of this giveaway, you need to send over a specific amount of your own cryptocurrency to verify your digital wallet. The problem is the victim never gets their share of the giveaway. Once a cryptocurrency transaction is made it is irreversible, so the scammer gets away with the victim’s money.

Scammers have tapped into the cryptocurrency craze and are looking for a payout. When trying to decide if something is a scam remember that only scammers will “guarantee” a big payout, don’t invest based on your online dating platform, and do your research on a company when asked to send crypto. The more knowledge you have about scams, the better you will be able to protect your investments.          

Source: FTC, US News