We see so many people experiencing similar scams that we put together a list of the top 5 of 2022.

The social engineering scam 

Social engineering is a general term used by most cryptocurrency investigators today. This is a scam right out of the gate, however, the victim does not believe it to be true, since the scammer has spent so much time developing the trust of the victim. Social engineering is when a person operates under a fake persona in order to scam an individual out of their money.

This scammer creates a fake profile(s), oftentimes portraying a well-known individual or providing a false online identity to the victim. This entices the victim to develop an online relationship with the scammer. These online relationships are socially engineered to develop trust; sometimes using romance, but oftentimes end with the victim sending money to the scammer for some reason, whether it is for help, investment opportunities or business ideas.

The social engineering scam also includes the scammer sending fake links to people who are interested in investing in crypto. Oftentimes, these fake links make a false promise sending a victim to a fake crypto opportunity. It is important to remember that not everyone with an online profile is real. And not every link can be trusted. Please, do your due diligence research and only use a valid, well known exchange, directly from the source.

The romance scam

Much like the social engineering scam, the scammer gains the trust of the victim; however, under the romance scam, the scammer uses the language of “love” to build trust in a relationship. This can be done through a dating website or even a social media site. Once this is accomplished, the scammer will then fabricate financial hardship situations or investment opportunities.

The victim believes their online “newfound love” and sends crypto or dollars to the scammer, thinking they are increasing their net worth or helping someone in a desperate situation. This romance scam can even go so far as to steal the inheritances of families and ruin a person's life by taking their life savings. It is an unfortunate situation, but when it starts with flirting on a platform, usually the scammer's goal is to win over the heart and take advantage of someone who is a very kind, trusting person. 

Recovery scams

As a company that guides individuals on cryptocurrency recovery, we hear about a lot of companies that advertise 100% recovery of cryptocurrency. These companies charge a lump sum amount and claim they can “hack” a wallet or recover all of your crypto funds. First of all, if someone is telling you they can hack a scammer's wallet, they are playing into the fact that the victim doesn't know about the security of blockchain technology and that it cannot be hacked. The very reason for this decentralized technology is to prevent transactions from being compromised. 

The only way to recover crypto is through the proper recovery process with law enforcement involved. Also, reaching out to the proper financial crime channels not only locally, but statewide and nationally. If any tech company claims they can recover your crypto 100%, then chances are it is a scam in which some victims pay upward of $2,500 to $10,000 only to find out they have been scammed once again by these fake recovery companies. Remember, only law enforcement can subpoena a crypto account, but only after proving it is a scammer's account.

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SIM swap scams 

Otherwise known as cell phone identity theft, the SIM card swap involves scammers who have stolen the identity of a consumer in order to gain access to the financial technology apps on their phone. The scammer can then talk to your cell phone carrier/service provider or — believe it or not — is an employee of your service provider, who knows about the crypto on your phone.

The scammer uses the consumer's cell phone information to request a new sim card/phone from the telecom provider. With this new sim card, the scammer can download consumer information, including the already downloaded apps. A cryptocurrency transaction cannot be reversed once the money is sent. So, if your digital wallet is stolen, so are your funds. 

There is good news about SIM SWAPS; cell phone carriers have a vested interest in keeping you as a customer, so we do see cooperation with these providers helping victims recover from SIM swap theft.

The fake exchange scam

This scam is similiar to social engineering and romance scams. In these instances, scammers will send a fake exchange link,  telling the potential victim that when they sign up and create an account using this "exchange link", they will have a phenomenal opportunity to make some really good returns. They come to find out that once the victim opens an account through the link provided by the scammer, they have been led to a fake exchange and the scammer has taken the victim's funds.

The scammer may say, “I can help you by attaching your wallet to your exchange,” or perhaps, the potential victim sends money directly to the fake exchange either in cryptocurrency or dollars. Either scenario is not a pleasant one as, oftentimes, victims will wake up one day to see their funds completely gone and their balance is at zero. Many times, the fake exchange account is then closed. We see this scam every week and new fake links are being created and sent to potential victims. Understanding who is real and who is not is a huge responsibility of those working in the cryptocurrency industry. Our clients often don't know where to turn until it is too late or they lose their funds.

As we know, these scams are very serious in a DeFi world where crypto transactions are irreversible. As more and more people begin to see crypto as an alternative financial system, it is the responsibility of those who work in this industry to educate individuals on the safety precautions of money handling in a DeFi world. It is a whole new level of fiscal responsibility, including understanding the mind of the crypto scammer. 

Chris Groshong, President of CoinStructive, offering compliance services and fraud investigations for crypto businesses and transactions.


This article was published through Cointelegraph Innovation Circle, a vetted organization of senior executives and experts in the blockchain technology industry who are building the future through the power of connections, collaboration and thought leadership. Opinions expressed do not necessarily reflect those of Cointelegraph.

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