Crypto Scammer: Everything to Know

By  Beluga Research October 12, 2023

Image for Crypto Scammer: Everything to Know


  • Crypto scammers are individuals or groups who deceive and defraud people in the cryptocurrency space, often by using fraudulent schemes or fake investments
  • These scammers use deceptive tactics to trick people into giving them money, taking advantage of the anonymity and irreversibility of cryptocurrency transactions
  • Common types of crypto scams include phishing scams, Ponzi schemes, fake ICOs and pump and dump schemes
  • Potential red flags to watch out for include unrealistic promises, lack of transparency, pressure to act quickly and unsolicited communication


Crypto scammers are individuals or groups who deceive and defraud people in the cryptocurrency space, often by using fraudulent schemes or fake investments. These scammers exploit several unique aspects of the cryptocurrency industry. One is the lack of regulation in many jurisdictions. Governments and regulatory bodies have made efforts to establish frameworks, but the landscape remains largely unregulated. This allows scammers to operate with relative impunity, making it difficult for victims to seek legal recourse or recover their funds.

A Brief History

Crypto scams have existed since the early days of Bitcoin. Scammers targeted inexperienced users. The Mt. Gox exchange incident in 2014 was a notable crypto scam. The exchange collapsed after a massive hack, resulting in the loss of millions of dollars worth of Bitcoin. This incident highlighted the need for improved security and regulation.

Crypto Scammer: Everything to Know

Types of Crypto Scams

Crypto scammers use various tactics:

a. Phishing Scams: Scammers create fake websites or send fraudulent emails that imitate legitimate platforms. They trick users into providing login credentials or private keys, gaining unauthorized access to funds.

b. Ponzi Schemes: Scammers promise high returns to attract new investors. They use new investors' funds to pay existing investors until the scheme collapses.

c. Fake Initial Coin Offerings (ICOs): Scammers create fake ICOs, offering non-existent or worthless tokens. They lure investors with the promise of huge returns and disappear after collecting funds.

d. Pump and Dump Schemes: Scammers inflate the price of a low-volume cryptocurrency with false information. They sell their holdings, causing the price to drop and leaving other investors with losses.

Red Flags to Watch Out For

There are common red flags to identify potential scams:

a. Unrealistic Promises: Scammers guarantee high returns or risk-free investments. However, investing in cryptocurrencies carries risks, and anything that sounds too good to be true likely is.

b. Lack of Transparency: Legitimate projects have transparent teams, clear whitepapers, and well-defined roadmaps. Lack of these elements or vague/inconsistent information may indicate a scam.

c. Pressure to Act Quickly: Scammers create urgency, pressuring individuals to make hasty decisions without proper due diligence. They claim limited-time opportunities or imminent price increases.

d. Unsolicited Communication: Be cautious of unsolicited messages or emails offering investment advice or exclusive opportunities. Legitimate projects typically don't approach investors in this manner.

Getting Started

To understand crypto scammers, it's important to know the basics of cryptocurrencies. They are digital or virtual currencies that use cryptography for security. Unlike traditional currencies issued by central banks, cryptocurrencies operate on decentralized networks called blockchains. Blockchain technology ensures transparency, immutability, and eliminates the need for intermediaries like banks in financial transactions.

Unique Aspects

Another unique aspect is the pseudonymous nature of transactions. While blockchain transactions are visible, the identities of the individuals involved are often concealed behind cryptographic addresses. This anonymity makes it difficult for victims to identify and hold scammers accountable.

Furthermore, the global reach and borderless nature of cryptocurrencies make it easier for scammers to target victims worldwide. With just an internet connection, scammers can reach potential victims across different countries and continents. They exploit the lack of physical presence and jurisdictional limitations to evade law enforcement.

Crypto scammers also take advantage of the limited knowledge many individuals have about cryptocurrencies. The complex nature of blockchain technology and associated terminology can be overwhelming for newcomers. Scammers exploit this knowledge gap by presenting themselves as knowledgeable experts and offering enticing investment opportunities that seem legitimate to the uninformed.


  • Anonymity - Cryptocurrency scams take advantage of the pseudonymous nature of blockchain transactions, allowing scammers to hide their identities and operate without fear of being traced.
  • Global Reach - The internet enables scammers to target victims worldwide, making cryptocurrency scams a global concern.
  • Lack of Regulation - The decentralized nature of cryptocurrencies means there is no central authority overseeing transactions, providing scammers with opportunities to exploit loopholes and carry out fraudulent activities.
  • High Potential Returns - Scammers lure victims with unrealistically high profits in a short time, appealing to those seeking quick financial gains and making them vulnerable to the scam.
  • Psychological Manipulation - Crypto scammers use psychological tactics, such as greed, fear of missing out (FOMO), and the desire for financial stability, to manipulate their victims and make it difficult for them to resist the scam.


  • Financial Loss - Falling victim to a cryptocurrency scam can result in significant financial losses. Scammers may trick individuals into investing in fake projects or steal their cryptocurrency holdings.
  • Irreversibility of Transactions - Cryptocurrency transactions are typically irreversible, making it challenging for victims to recover their funds after falling for a scam.
  • Lack of Legal Recourse - Due to the decentralized nature of cryptocurrencies, it can be difficult to track down and hold crypto scammers accountable. Victims may struggle to seek legal recourse or recover their stolen funds.
  • Damage to Trust - Cryptocurrency scams erode trust in the overall cryptocurrency ecosystem. When individuals are scammed, it creates a negative perception of cryptocurrencies, hindering their widespread adoption and potential benefits.
  • Time and Emotional Stress - Recovering from a cryptocurrency scam is a time-consuming and emotionally draining process. Victims often experience anger, frustration, and betrayal while investing significant effort into reclaiming their stolen funds.