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What Is A Scammer?

A scammer usually comes across as the opposite of a fraudster: a legitimate entrepreneur with a great product. Their business may even offer a piece of the cryptocurrency boom that’s taking place, although they often send a little extra cash if you’re in need. They’re driven by their passion, which makes you feel like they really want to help you succeed. So, they’re hard to spot until you put in some effort. Here’s how to be aware of a scammer and how to avoid them altogether.

First, their behavior is subtle. While they may take a little time to get to know you, they do so with the intention of furthering their goals, which are usually to take your money.

How to Identify A Crypto Scammer

Here are four ways cryptocurrency scammers trick their victims into giving their crypto away.

Coinbase scam

This scam is unique among crypto scams in that it exploits the founder’s celebrity. A victim might get a friend to ask the founder, Brian Armstrong, for help. A common method is for the friend to follow Armstrong’s footsteps on social media, posting messages of gratitude and support. Armstrong may even send flowers.

Lucky Miner scam

This scam is designed to look like a legitimate company offering mining services. The scammer will announce that they’ve uncovered a Bitcoin fortune. The scammer will ask you to help them claim their prize by buying mining contracts with a huge mark-up.

How To Avoid Being Scammed

With that in mind, here are four best practices that can help protect you from being scammed when looking into the cryptocurrency world.

First, start with news stories and trusted sources. The more you read about crypto, the better your chances of staying away from scammers.

“The No. 1 thing to do is to be aware of what’s happening,” said Vitalik Buterin, co-founder of Ethereum, in an interview with CNN. “The second is to know where these things are happening. The third is to know who’s engaging in these scams. And the fourth is to follow the regulations.”

In other words, don’t follow a scammer blindly. Follow all the red flags. Only investigate an ICO and company if you can figure out how it works. Make sure that the founders’ backgrounds are legitimate, or at least transparent.

How To Report A Crypto Scammer

If you’ve come across a fraudulent crypto investment opportunity that you think is fraudulent, tell your story to a cryptocurrency startup expert. Report your scammer to the site you got scammed from, or go directly to the government agency responsible for investigating fraud.

[Read: Best VPNs for Private Internet Access.]

Signs You’re Getting A Cryptocurrency Investment Scam

Here are some telltale signs that you’re getting scammed:

No company or person can contact you.

The business address given doesn’t exist.

The name of the company is generic, like Crypt-X.

The company asks for your passport, driver’s license or other identifying information.

The company is missing important information, such as a telephone number and an address.

Your money is nonrefundable.


Overall, crypto scams are incredibly rare and perhaps nonexistent. But if something sounds too good to be true, it probably is. Keep in mind that it’s difficult to independently verify all claims. Even in the crypto community, you should carefully consider claims that seem off the wall or outlandish. We don’t know the crypto landscape well enough to give you the green light on every startup.