How To Spot A Crypto Scammer

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Crypto scams are all too common and unsuspecting investors lose millions to them each year.

Questions that I frequently get asked are ‘How can you tell if someone is a crypto scammer?’ or ‘How do you spot a crypto scammer?’.

While fraudsters employ a range of tactics to appear convincing, there are often certain giveaways that reveal the true nature of who they are and what they’re up to.

So, if you’re worried about being scammed and unsure who to trust, this guide will help you spot a crypto scammer and take steps to avoid them.

You may also like: The ultimate guide to spotting a crypto scam

Crypto scammers on social media and dating apps

Scammers can be very convincing and often target people who are emotionally vulnerable.

This is why they’re often found lurking online on dating websites where there’s a steady stream of people looking for relationships and an emotional connection. These types of scams are often referred to as pig-butchering scams.

Another fertile hunting ground is social media platforms, with Telegram and WhatsApp being particularly popular among scammers.

Time and time again I hear about scams that have started with an unsolicited approach on a dating or social media platform.

It’s usually by someone who’s eager to develop a friendship quickly before mentioning that they’re involved in crypto investing and that they’re plugged into an incredible investment opportunity that offers huge returns with no risk.

Therefore, you need to be especially cautious when someone new mentions an investment scheme to you. Ask yourself what this person’s motivations are and whether you trust them.

Even if you’re convinced they’re genuine, don’t be afraid to ask lots of questions, and research the investment they’re recommending thoroughly.

For more tips about spotting scams follow our how to spot a scam crypto platform or exchange checklist.

How can you tell if someone is a crypto scammer?

If a person you’ve met recently online starts encouraging you to invest in a crypto money-making scheme, it’s highly likely to be a scam.

They may be overly friendly to start with and become quite pushy later on when they’re trying to get you to invest, especially if you seem unconvinced.

It’s not uncommon for the scammer to try emotional blackmail, especially if they’re engaging with someone looking for a romantic relationship.

They might use tactics such as ‘How can we move our relationship forward if you don’t trust me’ to get their victim to invest. This is particularly successful when the victim is worried about their new ‘love interest’ walking away.

Another sign that someone is not who they say they are is the profile picture they’re using. It may be a glamorous shot that looks like it’s come from a catalogue rather than an iPhone. They may also be unwilling to connect via video call.

It’s highly likely that all the details they’ve given you are fake, and they are a completely different person to the one you think you’re talking to.

Crypto scam ‘managers’ will take over

If someone has been lured into investing, it’s likely they’ll be passed to a ‘financial adviser’ or ‘investment manager’ who’ll control their account and ‘investments’.

This scammer will guide you through the process of sending funds to a fake investment platform.

This often involves setting up an account on a legitimate crypto exchange, depositing cash, then converting into a cryptocurrency, often the USDT (Tether) stablecoin.

The ‘manager’ will be confident and persuasive, while reassuring you that your deposits and investments are safe and that the profits you’re making are genuine.

They may direct you to a WhatsApp group that purports to show other investors discussing how much money they’re making through the scheme, but these will be other scammers or bots.

The ‘managers’ are often keen to secure all your contact details and will use these to pressure you into investing increasingly large amounts of crypto.

Spotting a scam crypto ‘investment manager’

Most crypto investment/exchange scams begin to unravel when the victim decides they want to realise their profits and transfer their new-found wealth to their bank account.

At this point the ‘manager’ will either try to dissuade you by claiming you’ll miss out on bigger profits, and they might even try to get you to invest more.

Alternatively, they’ll present you with a barrier or unexpected problem as to why you can’t access your funds.

This might be:

• Claims there’s a technical problem with the platform.
• Demands for a tax to be paid before the funds can be released.
• A requirement for ‘matching funds’ or a significant sum to be deposited before the funds can be sent.
• A bill for a large ‘commission’ that can’t be paid from the existing pot, so a further deposit is required.

In each of these cases the fraudster is trying to lure you into transferring more funds part of the scam.

They might phone you repeatedly and appear convincing when giving you the reasons as to why you can’t get your money and should pay the fee.

In some cases, scammers have allowed worried victims to make a small withdrawal as part of the process of conning them into investing more.

Fake taxes, organisations and mining fees

As I’ve said already, crypto scammers will often demand ‘taxes’ or other payments in order to release your funds.

These can take many forms but are sometimes related to legitimate organisations to make them seem more plausible.

For example, I’ve spoken to a person who was told they needed to pay Capital Gains Tax to HM Revenue and Customs (HMRC) in the UK, but that the money must go via the ‘manager’s’ account.

Unfortunately, they paid the money – a substantial sum – only to realise later that any tax payment should go directly to HMRC and never via a third party.

Scammers will sometimes claim that ‘mining fees’ are due on the profits, often amounting to thousands of pounds/dollars.

Crypto transactions do involve charges, often called ‘mining’ or ‘gas’ fees, but these are small sums of a few pounds or dollars and nothing remotely close to what scammers demand.

Spoofing genuine crypto companies

Another tactic that scammers use which often convinces people, especially those who don’t know much about crypto, that they’re part of a real compay is to claim to represent official sounding organisations which are actually complete nonsense.

I’ve seen scammers using phrases such as the ‘Withdrawal Department of Blockchain’ and ‘Central Blockchain Treasury’ to legitimise their demands, but they are obviously made up.

A more convincing modus operandi that scammers employ is mimicking genuine companies, especially those involved in the crypto space.

For example, they might use a domain name that closely resembles a real crypto business with just a letter or two changed.

They’ll use this on their email footer, or even the real company’s name, but the link directs the victim to somewhere completely different instead.

Dismissing scam reports online

Some scam victims call out the scammers when they realise they’ve been conned.

This might include showing them reviews online highlighting the investment platform as a scam.

A scammer may dismiss these reports, claiming a variety of reasons as to why the negative review exists, including that it’s a competitor trying to discredit them.

Genuine crypto investment platforms will have a large online presence, including reviews on multiple sites plus chatter across social media platforms.

If the only mention of a crypto investment platform is that it’s a scam, you can be pretty certain that it is.

Final thoughts

Spotting a crypto scammer can be difficult, especially if you want to believe that a person is who they say they are for romantic reasons.

Unfortunately, any sector involving money and investment attracts criminal elements looking to steal your hard-earned cash, and the cryptosphere is no different.

You should always be suspicious of anyone who you’ve recently met asking you to invest in a get-rich-quick scheme offering large returns, especially if it’s in a sector you don’t understand.

Ask yourself why this person is offering you this opportunity and not keeping all the riches for themselves.

Also, consider if the claimed returns are attainable or not? If they seem much higher than what’s achievable elsewhere, this is a red flag that you’re dealing with a scammer.

Research and education are crucial when it comes to investing, so do your homework before parting with your cash, and always think: ‘If something seems too good to be true, it probably is.’

For more details and to contact us, see our Advice Services page.

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