How to avoid crypto fraud

According to a June 2022 report from the US Federal Trade Commission (FTC), at least 46,000 people reported losing over $1 billion to crypto scams between January 1, 2021 and March 31, 2022.

In this guide we will walk you through the most common crypto scams. We'll show you how to spot them so you don’t become the next victim. But first, why are scams so prevalent in crypto? There are a few reasons:
1. As a top-performing asset class, people are excited about the potential to make money with crypto. This excitement sometimes obscures seemingly obvious warning signs.
2. Cryptocurrencies works differently than the traditional financial system, which means there is unfamiliar vocabulary associated with it. Scammers may leverage people's lack of knowledge on how crypto works.
3. The irreversible nature of cryptocurrency transactions means that once the bitcoin is sent, there's no way to unsend it.


  1. Phishing scams
  2. Fake Crypto Exchanges
  3. Fake Crypto Wallets
  4. Ponzi Scams
  5. Cloud Mining
  6. Conclusion

Phishing scams

This is a very common scam. Phishing is a type of social engineering attack. Social engineering attacks are a broad range of attacks that exploit human behavior, instead of some kind of technological weakness. Phishing attacks occur when an attacker convinces you they are a trusted representative of some organization, for example your bank, mobile phone company, or crypto exchange. Because you take the attacker to be a true representative, you divulge private information such as passwords, or click on malicious links, which can install malware or other harmful software. This can result in the complete loss of your funds.

Let's look at some common phishing attacks. It should be noted that would-be attackers are always finding new ways to try and gain your trust. After one scam becomes well known, and people become more guarded, attackers will look for another way where your guard is down.


You may receive an email from a wallet or exchange you already use, either by coincidence or through past database hacks. Maybe hackers obtained your email address on the black market; for example from a hack of Yahoo! or other service. Attackers can appear to be people you know, asking or encouraging you to take some action, such as join an exchange. Here’s an example of an phishing email:

Best practice: Do not click on any hyperlinks in an email or open attachments. Go directly to the website if you have to do business there. A common tactic is to make a hyperlink look real, but if you hover over it you will see the fake website URL. Always check the sender email to see where it’s coming from (although this is not 100% reliable as emails can be spoofed).

Fake advertisements

With fake web advertisements, you have to be careful on the site you are visiting. This usually happens when searching on the web for things like “blockchain.” The top result could actually be an advert via Google for example, but may end up being a fake crypto wallet.

Best practice: Do not visit sponsored ad content in search results. It’s better to manually type the real website address directly into your browser. Or better yet, bookmark the website when you join and always use that.

Instagram/Facebook/Social Media

This is newer. People claiming to be representatives from a company you use, such as, might contact you directly via social media. They might say any number of enticing things such as “deposit now and receive $100.” Or, they might warn you of a problem, like, “your account has been hacked, so we’ve reached out to you via social media. Click the link below.”

Best practice: No company will attempt to contact you through social media. Never believe people who attempt to contact you through social media, and immediately report them.

Telegram/Discord/Instant messaging

This is new, and has affected many NFT holders. Many people are receiving direct messages (DMs) from people claiming to be from prominent projects or businesses. Their names can look exactly like the true names of real people. A new scam many are falling for is asking for help in the group chat for projects, and immediately being DM’d by an attacker. Attackers might even help fix the problem, but eventually they will ask for private information, such as passwords, recovery phrases, or to take screenshots that include private information.

Best practice: Attackers will ask for private information, such as passwords, or recovery phrases. Remember, you will never need to reveal this information to anyone. If someone asks for a screenshot, it’s best to decline. And of course, do not click on links or download anything.

In general the best practices are quite simple. If anyone contacts you claiming to be from an organization whether that be through email, social media, or instant messaging, do not click the links they provide. Instead, use your web browser or the companies’ mobile app.

To be sure you are going to a real Bitcoin wallet, visit our wallet portal on

Fake Crypto Exchanges

Fake Bitcoin Exchange Often on social media you'll see a link saying something like “Buy bitcoin for 5% under market value. Save big!” This is a marketing trick to get you to visit and use their fake exchange. If you visit any exchange site the very first thing you want to do is make sure it’s HTTPS secured and not HTTP. This means that the web traffic is encrypted and secured; if it’s just HTTP without the “S” that is a big red flag and means stay away. Another red flag to look out for are fake exchanges that offer selling BTC for PayPal. On these sites you'll see a web form to enter your PayPal email and amount to sell. After submitting, you will be presented with a QR code to send your BTC to. But the money never arrives. Most of these fake exchanges are here one day and gone the next. You will see them pop up but will quickly disappear, and then re-emerge with a different domain name later. *To be sure you are going to a real crypto exchange, visit our exchange portal on to ensure you aren’t being scammed.*

Fake Crypto Wallets

Spotting fake crypto wallets is a bit tougher, because wallets primarily are about storing cryptoassets and not buying or selling them. It has less to do with money than it does with the software you may use. Typically, fake crypto wallets are just scams for malware to infect your machine in order to steal your passwords or private keys. To ensure security, recommends our official Bitcoin Wallet for desktop and mobile users. To browse all of the wallets offered through, check out our wallets page.

Just like with fake crypto exchange sites, you should trust your instincts and look for red flags. Does the wallet site use HTTPS? Is the name of the wallet site trying to resemble another reputable crypto wallet by impersonating it? Outside of the obvious, it may be hard to tell if a wallet is fake. A good practice is to ask your peers if someone has used the wallet before. You can do this on the Forum or Cryptocurrency subreddit. If the wallet is a downloadable client, another good practice is to check the site for malware. Sites like VirusTotal are a great resource for checking executables to see if they contain viruses. To avoid scams and to be sure you are getting a real crypto wallet, visit our wallet portal on or directly download's official wallet.

Ponzi Scams

Bitcoin Ponzi Scams Ponzi scams are promises from websites that you will, for example, “double your bitcoin” overnight, or some similar outlandish claim. Ponzi sites may be harder to spot, but they're easy to figure out once you understand this: the only way to double your money is to first send it to them. Ponzi sites also typically have referral programs, so if you get others to sign up for the site by visiting your affiliate link, you may make a few cents. This is another red flag, as many times you will see on social media shared links with referrals within the URL. Usually it will look something like this (referral link is in bold):

If you’re unsure whether this Bitcoin site is a scam, visit our Scam thread on the Bitcoin Forum to see if others have used it before.

Cloud Mining

This can be a bit tricky because not all cloud mining operations are scams. Some are completely legitimate, however many are scams, so it’s best to warn people (especially newcomers) to be careful when looking into cloud mining. For the uninformed, cloud mining is shared mining hashpower, where people pool their funds together to rent crypto mining machines. For legitimate operations, this works and can be profitable. For scams, returns may be low or non-existent. As we’ve previously established, it’s best to trust your instincts and look for red flags. Does the site use HTTPS? Did you find the site from a referral link on social media? Does the cloud mining operation not give any insight into what pool they use to mine, or let you select the pool you want to direct your hashrate to?

These are just a few things to look for; you can read some other tips here. We recommend the Mining Pool, which is a legitimate cloud mining pool that offers the highest block rewards in the space with 0% fees. The pool also has very competitive hashrate plans that you can buy. The pool is completely transparent on how it's run, by whom, and how much return on your investment you will gain. Additionally on your account dashboard you will see charts and information with exact details on any mining contract you purchase. *If you’re unsure about cloud mining, visit our Bitcoin Mining Forum and ask someone for help*.


“Bitcoin is a remarkable cryptographic achievement. The ability to create something which is not duplicable in the digital world has enormous value. The Bitcoin architecture, literally the ability to having these ledgers that can’t be replicated is an amazing advancement.” - Eric Schmidt, Executive Chairman of Google, March 2014.

While scams involving crypto are unfortunately common, they shouldn't dissuade from you from benefitting from this empowering technology. Armed with knowledge and powerful tools like the multicoin Wallet, it's easy to take control of your money and expand your economic freedom.




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