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June 15, 2024
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Top 5 Crypto Scams, How to Avoid Them

Crypto scams are something to consider before investing in any cryptocurrency. Market manipulation is more likely to happen in crypto marketplaces since they are still emerging and unmanaged. Many retail investors and institutions see cryptos as investments rather than means of exchange, purchasing certain coins to sell them for a profit later.

However, investors should tread cautiously before investing in these commonly misunderstood assets. Even those who market these coins advise you to invest wisely and cautiously:

Cryptocurrencies are by their very nature speculative. They do not even have standard fundamentals that investors can examine and assess. As a result, cryptos are very volatile assets, with prices fluctuating dramatically daily, and also cryptocurrency markets are less regulated. This makes it simpler for malicious actors to manipulate prices and take advantage of naive investors.

Anne-Marie M., Hack-growth specialist at Crypto Marketing Center

What we are witnessing on the cryptomarkets, the crypto crash, is just a consequence of the volatility of the crypto coins and tokens offered to investors worldwide.

Before investing in cryptocurrency, investors should be aware of the following crypto frauds:

Market manipulation

The purposeful attempt to artificially affect or influence asset prices is known as market manipulation. Scammers typically manipulate markets to quickly shift the balances in their favour and profit. This umbrella phrase encompasses various illegal trade practices, including spoofing, front-running and churning.


This technique provides a sense of continuity by creating fictitious buy or sell orders that are cancelled before they are actually paid. Scammers regularly use dummy accounts and bot scammers to conduct huge deals, giving other investors the appearance that demand is rising or declining.


The method of making deals based on upcoming transactions is known as front-running. Miners and node operators, for example, may have access to pending deals. They might then use their insider knowledge trade ahead of significant price profitably fluctuations.


This is when a broker trades excessively in a client’s crypto account to make higher commissions. For managing crypto assets, asset management firms may be paid. As a result, unscrupulous brokers might take advantage of a commission-based payment system to benefit from naive clients. Churning may result in unjustified costs as well as unneeded tax liabilities for the affected persons.

How to avoid market manipulation?

Adopting a long-term view, sometimes known as “HODL-ing,” can help insulate you against price swings. This acronym translates as “hang on for dear life,” promoting a buy-and-hold approach.

Pump-and-dump schemes

A pump-and-dump plan is an attempt by a person or group to artificially increase the price of an asset so that they may profitably liquidate their interests.

The “pump” is the first step. Crypto scammers use social media, forums, and online groups to promote incorrect or misleading information about minimally traded currencies to persuade people to invest. These publications frequently include inflated due diligence (“DD”) and forecast a spike.

As the price rises due to increased momentum, additional investors pay in, driving the price higher while the schemers cash out and make a quick profit. When investors discover the hoopla is false, they scramble to limit their losses, and the coin’s price plummets.

Look out for anonymous accounts with little posting history — or a history of spurious pumping — if you utilize social media platforms like Reddit and Twitter to watch bitcoin movements. These are most likely scammers.

Rug pulls

When crypto developers quit a project but grab the capital obtained from investors, this is known as a rug pull. Bad actors can issue a new token on a decentralized exchange to attract investors, couple it with a real cryptocurrency, and generate buzz on social media. The creators scrap the project and flee with investor cash once enough money has flowed into their token.

This scam targets early investors who believe they are obtaining early access to new cryptos when, in reality, they are being defrauded of their funds.

You should pay close attention to the websites and third parties involved and not rely on comments from anyone on social media, no matter what people are saying or how many positive reviews there are. If you can’t find verifiable reviews, the chances of the opportunity being a scam are higher.

How to avoid rug pulls?

You have a higher chance of avoiding illicit projects if you stick to centralized cryptocurrency exchanges, which often have more robust control and restrictions.

Traditional’ hacking and theft

However, traditional frauds like account hacking and identity theft continue to threaten investors.

Keep your private keys in a secure location, just as you wouldn’t divulge your credit card number to a stranger. Fraudsters can use this information to breach accounts and take cash, and they’ll use various techniques to get investors to give their data.

Crypto phishing emails posing as a crypto exchange or wallet provider should be avoided. Unexpected and uninvited advertisements from questionable websites and fake accounts are the same. Scammers frequently impersonate celebrities or huge corporation affiliations, offering specific and quick profits if you respond promptly.

How to avoid traditional hacking and theft?

Verify if the sender’s email address is accurate and recognizable to prevent falling for phishing emails. Scammers frequently utilize generic domains and strange characters in their addresses.

ICO scams

The crypto counterpart of a stock’s first public offering (IPO) is an initial coin offering (ICO). Companies can use an ICO to obtain funds for a crypto project, such as a coin, software, or relevant service. The investor receives a new issue of coins in exchange for pledging cash.

While IPOs are traditionally reserved for well-established private corporations, companies who seek ICOs aren’t in the same boat. They might be brand-new businesses with no track record, making it impossible to distinguish between a legitimate service and a scam. ICO scams, like rug pulls, take money from early investors only to quit the enterprise soon after.

Examining the company’s whitepaper is a simple method to spot an ICO fraud — or just an unprepared management team. This document outlines the project’s specifics, including the strategy, goals, and market analysis. It’s a red signal if the corporation doesn’t produce a whitepaper.

How to avoid ICO scams?

You may look at the ICO’s developers and management team’s backgrounds. If the company’s founders are unknown or have a shaky track record in the crypto industry, this should raise red flags.

Final thoughts on crypto scams

In the absence of uniform monitoring, unscrupulous actors can conduct fraud and fool unwary investors in several ways.

Crypto traders may reduce their chance of falling victim to market manipulation by being vigilant of these scams and taking proactive precautions. This involves using recognized exchanges and conducting extensive research before making any investing selections.

This section is powered by Crypto Marketing Center – Crypto Marketing Agency.

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