Cryptocurrency scams are more common than ever, and victims are losing billions of dollars every year. In 2021, 81,500 investment and cryptocurrency scams were reported to the government, and those cases cost Americans $1.8 billion.

Some scams are more obvious than others, like pump-and-dump schemes and scam artists who pose as celebrities or love interests on dating apps. But some scams are less clear, and can sneak up on you without you even knowing it.
1. The Ponzi Scam

The crypto industry has seen a rapid growth in recent years. Its popularity has also led to an increase in fraudulent activity. The FBI says cryptocurrency has become a preferred payment method for many scams, including phishing and identity theft.

In a recent survey by The Motley Fool, 47 percent of investors said they’ve been targeted by investment or cryptocurrency scams in the past year. And just 28 percent of people surveyed believe the government or financial institutions have done a good job educating the public about these types of scams.

Scams can happen in any industry, but they tend to be more common in new fields, especially ones with less regulation. This is a big reason why the Federal Trade Commission (FTC) has urged investors to be careful about crypto-related scams.

There are several ways to tell if you’re dealing with a scam. Some of the most obvious are a sudden change in currency exchange rates and the loss of your money. Others are more subtle, such as a promise of a guaranteed return.

A Ponzi scheme is an investment fraud that uses a combination of high returns and trickery to attract new investors. As new participants invest, the promoters use their profits to pay earlier investors. This is a "cascade" effect that causes the scheme to lose money in the long run.

While this type of fraud is most common in the stock market, it’s also found in a variety of other areas. It’s especially dangerous if your broker or firm didn’t properly disclose the risks involved, or the investments they recommended are not registered with the Securities and Exchange Commission. Credit/debit card scams

It’s important to know the difference between a Ponzi scheme and other forms of investment. The SEC says that there are a few key traits that will typically identify a Ponzi scheme.

First, the promoters will usually promise high returns that can’t be matched by other investments. Second, these promotions will often involve complicated terms of art or cite to proprietary strategies that conceal the true nature of the operation.
2. The Scam of the Week

Cryptocurrencies are becoming increasingly popular, and scammers are taking advantage of this nascent technology. They are able to position themselves as leaders in the space and gain trust from unsuspecting people.

As a result, scammers have created a number of new scams to target cryptocurrency users. These scams are all designed to defraud victims out of their money and personal information.

One of the biggest four common cryptocurrency scams is known as the Ponzi Scam. This scam works by promising a high return on investment (ROI) in exchange for investing your money through a fake cryptocurrency platform.

These fraudulent platforms make it appear as though you have access to your funds and can make withdrawals. However, they falsify returns and only allow you to withdraw a small amount of your investment. Once you have exhausted your initial capital, they then restrict your access to your funds and attempt to extort you for more.

Another common crypto scam is the rug pull, or exit scam. This scam involves crypto projects that start out as promising investments but quickly collapse, often because the founders of the project feel the price has reached its peak.

The scam typically starts with a group of investors who are looking to make their first crypto investment. They are usually younger and less knowledgeable about the market, and may be hesitant to do research on the project before investing.

Ultimately, this type of scam can cause huge losses for victims and their families. A recent example involved the ACChain ICO, which raised $80 million from thousands of people before vanishing with all their money.

Other types of scams include phishing, which occurs when you receive an email or text message from someone you don't know asking for sensitive personal or financial information. This is a form of social engineering and is something that cybercriminals are increasingly using as more people use their smartphones.

Scams are a serious concern for everyone, but there are some simple things that you can do to keep yourself and your family safe from scams. These tips will help you avoid falling victim to a scam and protect your money and personal information.
3. The Scam of the Month

Almost one in three American adults lost money from an investment or cryptocurrency scam in 2021, and the numbers are on the rise. According to the Motley Fool's research, crypto scam losses rose by sixty percent in 2021 compared to the previous year.

While there's no single best way to protect yourself from scammers, there are certain tricks and strategies that you can use to avoid them. These include being vigilant on social media, keeping your personal information safe, and avoiding crypto transactions that require you to pay by wire transfer or gift card.

This is because these methods are highly unsecure, and if you lose your money to a scammer, it can be hard or impossible to recover it. Another trick that scammers often employ is phishing, which involves sending emails that appear to come from a trusted source but are actually malicious.

Scams can also take place when you try to make a purchase online, such as using your credit card. Scammers will often pretend to be legitimate companies, and they'll often ask you for your personal information in exchange for a purchase.

In some cases, these scams are even tied to real-life events, such as a celebrity's death or an outbreak of a virus. These are often called "crisis scams," and fraudsters know people are most vulnerable when they're in a state of anxiety or stress.

As cryptocurrencies continue to gain popularity, scammers will continue to find ways to steal your money from you. To stay safe, don't share your crypto assets with anyone and never give out your passwords or security keys.

The biggest four common cryptocurrency scams are:

1. Investment Scams
The most lucrative type of crypto scam is investment scams, which claim to be able to generate outsized returns by making investments in a variety of coins and assets. The scams promise you can't lose, and usually are based on an algorithmic trading strategy.

2. Romance Scams
The second most popular category of cryptocurrency scam is romance scams, which involve shady people trying to lure you into their schemes. These scams often ask for an upfront fee, and they're more likely to target victims who are looking for a long-term relationship or a partner.
4. The Scam of the Year

Cryptocurrency is one of the fastest-growing markets in 2021, but it’s also one of the biggest targets for scammers. Despite the fact that cryptocurrency is relatively new, fraudsters are using it to steal money from investors and consumers alike.

According to the FTC, a record number of Americans have lost money to scams in 2021. From January to March, the FTC reported a total of $680 million in losses to investment-related scams, including cryptocurrency fraud.

The most common type of scam is phishing, which occurs online and involves fraudulent communication purporting to come from a trusted source. The scammer will usually try to gain your personal information or access to your financial accounts.

Another common scam is social engineering, which happens when fraudsters use psychological manipulation and deception to steal your identity. This can take many forms, including a phone call from an unfamiliar person and a fraudulent message claiming to be from a government agency or well-known business.

This kind of scam typically tries to trick you into sending cryptocurrencies to a digital wallet that claims to be affiliated with a trusted business or individual. This can happen on websites or through apps, as well as through text messages and email.

Scammers will often ask for you to send a large upfront payment, followed by high fees. This can be a sign of a pyramid scheme, which is when people are rewarded for recruiting more victims into the scam.

If you’re unsure whether you’ve been scammed, contact your local police department or the FTC for help. They can provide advice on how to report and file a complaint.

In some cases, you can sue the scammer in court for damages. These lawsuits can be costly, but they may be your only recourse if you’ve been scammed out of your crypto.

The best way to avoid losing your crypto is to learn as much as you can about cryptocurrencies. That means reading up on what they are, how they work, and who to avoid.

While there are many ways to protect yourself from scams, a combination of the tips above can help you stay ahead of the game and keep your finances in good standing.