As with any industry, there are a number of scams and unfortunately no lack of individuals who want to take advantage of someone in some way. While each scam is different, ultimately, they do have a couple of things in common – a convincing story, and an even more convincing representative.
Most common scams we encounter
- Investment scams
- Romance scams
- Social media scams
- Technical support/remote access scams
- Account manager and broker scams
Other types of scams
| Mining scams |
| Crypto mining can still be lucrative but it’s also very complicated. If you found a mining service that asks you to simply send BTC (or other coins) to start earning, it’s most likely a scam. You don’t need to have crypto in one wallet to “start mining” and if they ask you to pay for a private key. Don’t. There should be no reason to buy a private key.Look out for being promised a high return with minimal risk, and being charged fees for blockchain, wallet, or mining “activation”. |
| Merchant scams |
| All e-commerce unfortunately comes with at least some risk of fraud or scam. Sadly with cryptocurrency, it is easier for merchants to get away with it.You can check the business is registered and notice whether the website has a lock symbol or ‘https://’ at the beginning of the URL. |
| Coinmama employee impersonators |
| Coinmama is not affiliated with any 3rd party investment services, ICO’s, or the like. We do not, and have never had or maintained investment portfolios for our users. We do not have brokers, miners, account managers or sales agents.We will never ask for your login credentials, passwords, private keys, payment details, or remote access to your device. If in doubt, submit a request to our Support team. |
| Initial Coin Offering (ICO) scams |
| ICOs are a method used for fundraising. An ICO scam occurs when unethical promoters perform a “rug pull”, disappearing off the face of the planet with investors funds.Look out for when the White Paper lacks sufficient information, or the team members have no online presence. |
| Employee and business scams |
| Another scenario we have seen pop-up recently are jobs which require employees to either pay for the employment, or to allow use of their bank accounts (money laundering).Be sure to do your own research (DYOR) on the company. |
| Money mule scams |
| Money mule scams are generally used in combination with romance or investment scams. This occurs when you are sent money or coins, and asked to deposit/withdraw on the person’s behalf. If successfully prosecuted, mules can receive fines or sentenced to jail time.Be aware of individuals/companies wanting to send you money to carry out an action on their behalf. |
General tips to protect yourself from scams
✔ Ask yourself “is this too good to be true?”
✔ Watch out for guaranteed profits
✔ Do Your Own Research (DYOR) e.g. read white papers, check information is correct
✔ Ask for references
✔ Notice spelling/grammar mistakes from a business/individual
✔ Look for negative reviews on websites such as Facebook and TrustPilot
✔ Check how long the website has been around on SimilarWeb*
✔ Determine the location of the website owners using WhoIs
✔ Ensure the business is registered
✔ Look out for photoshopped images
✔ Pay attention to additional fees e.g. “courier” or “withdrawal” fees
✔ Make sure there are no warnings about the business on Investor Alerts Portal & Bitcoin Abuse Database
*we strongly discourage engaging with websites that have been around less than a year
Additional resources
- What to Know About Cryptocurrency and Scams
- Crypto Scams Are on the Rise – Here’s How Investors Can Protect Their Coins
Check out this video from our friends over at Crypto Fire:
