The growth of the cryptocurrency space and blockchain applications have been undeniably exciting. Technological innovations and the fast-paced new trading paradigm continues to attract big crowds; but unfortunately, this also includes a number of bad actors. For the cryptocurrency investor looking to make the most of the new investment opportunities while remaining safe from scams and fraudulent ICOs, the prospect can be quite daunting. That’s why CoinFalcon, your trusted cryptocurrency exchange, has outlined some information to help the community identify and avoid scams this 2019. It’s true that people are generally more aware now than in the past, but new scams are still perpetrated on a daily. What are the top 5 crypto scams? And how can you avoid them?

1. Malware Scams

Many online scams have long revolved around malware. But with cryptocurrency investments, it poses an even greater threat given the nature of the currency in and of itself. A few months back, a tech support site called Bleeping Computer issued a warning about a malware that targets cryptocurrency addresses in order to control its transactions. According to them, this type of malware, known as CryptoCurrency Clipboard Hijackers, works by monitoring a user’s Windows clipboard for cryptocurrency addresses. If one is detected, it will swap it out with an address that they control so that any coins transferred are received by the scammers instead of the rightful recipient.

2. Social Media Giveaway Scams

Image Source: Medium

You’ve probably come across social media groups and users (on Facebook, Telegram and Twitter), sometimes impersonating notable figures in the crypto space that offer giveaways. Whenever you’re scrolling on Twitter and come encounter messages like “send 0.001 BTC or ETH to this address and receive X amount back”, then just know it is a sure scam. Crypto is money and nobody is giving away money for free, especially to a bunch of strangers on the internet.

3. Cloud Mining Scams

Cloud mining has risen in popularity due to the higher costs of mining equipment and electricity for individuals. This has given bad actors another easy way to perform fraudulent activities. One of the more popular cases is South Korean website MiningMax, a cloud-based mining service that asked people to part with $3,200 for daily returns over two years, along with a $200 referral commission for every personally recruited investor. This alone makes it a clear Ponzi scheme, and yet the website was able to scam investors out of as much as $250 million.

4. Cloned Websites

Exact clones of legitimate crypto exchanges or ICO websites have been used to steal funds and personal information. You’d be surprised at how many fake websites and URLs have been set up, so before entering any personal information on the web, always make sure to double-check the URL. Impostor websites will use similar letters and numbers in the URL to make it look like the real one at a quick glance; for instance, the scammers could be using an “n” instead of “m” or swap an o with a 0 instead.

5. Pump and Dump Scam

While this type of scam is certainly not relegated to just crypto investments, a pump-and-dump scam is especially dangerous in the internet space. Here, the basic idea is to manipulate the price and the volume of a generally lesser-known, lower cap coin, hyping it up via investor websites, blogs, or even Reddit. Once the scammers have pumped in enough to skyrocket the value of the coin,  they cash out and "dump" the resulting losses onto the naïve investors who bought into the coin thinking it was the next big thing. It’s basically a pyramid scheme.

How to Avoid Falling Victim to Crypto Scams

With the inevitable rise of Bitcoin, Ethereum, Ripple, and other cryptocurrencies in current and coming years, it has become increasingly important to understand and be on the lookout for scams that could cost you significant losses. As more people become interested in cryptocurrency investments, more people are also likely to try and pull off a scam. While there is no one formula to avoid being scammed, knowing the various red flags remains one of the surefire ways to not fall victim:

  • The promise of astronomical gains -- If you come across an offer, whether on a website, social media, or email, that sounds too good to be true then it probably isn’t true. Simply put, always be wary of any project that offers high returns on your investment.
  • They ask for your private keys -- Never disclose your passwords, private keys or security phrases to anyone. Any individual, project or ICO that asks for your passwords, private keys or security phrases are scams.
  • Insufficient or missing background information - This particularly relates to ICOs, especially those offering unreal returns on investment. You’ll want to practice due diligence and do a background check on the project. Do they have a clear roadmap? How feasible is the project? How detailed is the whitepaper describing the asset? Is there information about the team behind the project?


At the end of the day, while there are numerous scams, schemes, and perpetrators of various fraudulent activities throughout the crypto space, proceeding on your investment with a reasonable degree of scepticism and care is crucial. Despite the number of fraudulent projects, there are countless reputable, and well-run projects, like CoinFalcon that make investing in cryptocurrency worthwhile. Not only are we committed to transparency and top-of-the-line security measures, but we also make it easy for you to own crypto assets. Buy BTC, ETH, LTC, XRP, and other cryptocurrencies with your credit card, enjoy super-fast transactions, and stay on top of your investments anywhere you are in the world.