crypto scam

The crypto scam landscape: What to look out for?


The world of crypto moves at a lightning-fast pace. New coins, projects, and faces come and go just as quickly as you can say “Satoshi Nakamoto.” But the fast-paced, world-changing innovation that crypto brings has a dark side that moves just as fast (the world of cryptocurrency scams). So how to avoid crypto scams?

Things to look out for (Red flags)

The following features might indicate that there’s something suspicious with the crypto transactions you are planning:

  • You are contacted by unknown persons through Whatsapp, Telegram, or suspicious e-mail addresses, especially from abroad, and these encounters lead to making crypto transfers for different purposes. An e-mail address could be from a Hotmail, Outlook, or Gmail account. Phone calls could be from a mobile or overseas number.
  • You can not find information about your new investment advisor on the internet (but be aware that many fraudulent actors have created websites that look very creditable: website addresses and social media accounts may contain very small changes or extra punctuation, etc. Communications may contain spelling mistakes and poor grammar.
  • Your contact (investment advisor, friends, etc.) advises you to open a crypto account and asks you to give the user ids to the contacts’ possession, or the cooperation works so that you do not have access to the service you are opening by yourself.
  • You are promised surreally high returns.
  • You are asked for additional payments or high percentage compensation for returning your funds: sometimes by a service in which you have not even invested.
  • Your contact person changes several times during the process of returning your funds. The person contacting you is in a hurry, and you have limited time to act on your transfer.
  • The contact may want you to install something on your computer, a program by which they then take control over your computer and accounts, including your bank account, because they then have visibility to everything on your computer. The most commonly used program is called “Anydesk,” but other similar programs are also available. 

These are just some features familiar with different crypto scams. You should bear in mind that new kinds of scams are detected all the time.

Types of Crypto Scams

Here are today’s most common crypto scams and how to identify and avoid them.

Investment scams

If you’re ever unsure whether an offer is too good to be true, it probably is. When making an investment decision, learn as much as possible about what you’re about to buy into.

When you consider investing through a new investment service provider, it is recommended to check that your service provider is licensed by its local supervisory authority. The list of entities supervised by the Finnish Financial Supervisory Authority FIN-FSA can be found here.

Also, you can check your new service provider’s name from warning lists that different supervisory authorities maintain, like the FIN-FSA’s list of Warnings concerning unauthorized service providers and the United Kingdom’s FCA’s list of warnings here. However, please note that the scam landscape changes so rapidly that not all suspicious service providers are listed on these lists maintained by supervisory authorities. And on the other hand, scams are also made by fraudulent operators in the name of licensed service providers. That’s why you should not base your trust in a new service provider solely on the fact that the operator seems to have a license or that the operator’s name is not listed in the supervisory authorities’ warning lists.

Fake Cryptocoins

With the rising popularity of DogeCoin, Shiba Inu, and other “meme coins,” it’s not exactly shocking to see new cryptocurrencies popping up with ridiculous names and themes all the time: for example, TrumpCoin (TRUMP), PutinCoin (PUT), Unobtanium (UNO), Useless Ethereum Token (UET), and Mooncoin (MOON) are all real tokens. And because many legitimate coins have playful names, it can be challenging to determine whether or not the coins are genuine. 

The best way to avoid fake coins is to do plenty of research. If you’re interested in investing in a project, make sure it’s been created by real, identifiable people. And be aware that fraudsters take advantage of what’s trending: for instance, in early November, Twitter flagged accounts that appeared to be associated with a Squid Game-themed coin that cheated buyers out of more than $2 million by exploiting enthusiasm for the Netflix phenomenon. 

Romance Scams

Financial scams involving fake romances have been around for a long time. Everyone’s heard of the person who fell for a prince in some faraway land who only needed $45,000 to rescue his kingdom and come to marry his “beloved.” But the story doesn’t have a happy ending: after the scammer gets the cash they need, they grab the bag and run. Or worse, stick around to see how much more they can squeeze out of their victims. 

The scammers who engage are particularly malicious because they tend to target vulnerable people. People who may be elderly, lonely, or unwell. Adding cryptocurrency into the mix can make this type of scam especially tricky. While bitcoin’s pseudonymous nature can make it easy to trace, privacy-oriented coins can make it particularly difficult to discover who’s “behind the mask.” 

Hopefully, you haven’t encountered this type of scam. However, scammers tend to target the elderly—check in on your elderly friends and neighbors to ensure that no one asks them to send crypto online. 

We’ve also seen cases that have taken advantage of the current situation in specific war zones or asking for help to save a child in need of an operation and other “urgent help requests.” 

What to do if you suspect you are a victim of a crypto scam

If you suspect that you have made crypto transfers to a fraudster, you should contact your licensed crypto exchange immediately and inform them about your suspicions and give details about the suspected fraudulent transactions in order for the exchange to be able to react if there is still something they can do to prevent damages. 

After informing your crypto exchange about your suspicions, you should contact the Police and report your suspicions to them.

Coinmotion fights against scams together with our clients, authorities, and other financial institutions. The information you can give us regarding your suspicions is essential for your own safety but also for us to be able to prevent other clients from falling for similar scams. 

You might feel ashamed, embarrassed, or guilty after realizing you have been scammed. Please recognize that scams are often executed very professionally and usually take advantage of our generosity, financial situation, or need for affection. AN ONLINE SCAM CAN HAPPEN TO ANYONE.

You can find more information about scams on the Finnish Financial Supervisory Authority’s website and on The Police’s website.

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