April 17, 2024


Anonymity, a lack of regulation, and enforcement all contribute to the widespread unethical activity plagues the crypto asset sector. Major frauds can be divided into two categories: soft scams and hard scams. These include impersonal and indirect rug-pulls, whereas the latter is more direct and targeted.

The majority of cryptocurrency purchasers and traders view shitcoins (1), and meme coins (2) as a joke or a game currency, and they have relatively little experience with the emotional agony that results when the game is over, and the market plummets. Being conned is far from funny when a serious trader or investor considers spending some of their hard-earned money in the cryptocurrency market.

Hard scams have a considerably worse psychological impact since they are direct, prey on the mark’s trust rather than greed, and the money involved isn’t always an amount the victim can afford to lose. Here are four subtle cryptocurrency frauds:

Third-party scam

A third-party scam involves a cybercriminal finding a buyer and a seller, posing as a broker, and making an alluring offer to both parties. The scammer persuades the customer and the seller to meet in person for the transaction after earning their trust and engaging in unique mind tricks.

The buyer shares their address with the broker, who then forwards it to the seller. The seller sends the coins to the address without thinking twice because the cash is directly in front of him, and the coins will end up in the wallet of the cybercriminal.

Fake Crypto Scam

A fake cryptocurrency scam occurs when the con artist sends the buyer a different or typically worthless cryptocurrency coin, which they believe to be the real deal. This might happen by delivering Bitcoin Cash (3) or Ethereum Classic (4) instead of Bitcoin or Ethereum. A new token that appears to be the genuine article when it enters the purchaser’s MetaMask wallet is created.

This is simple to accomplish since Ethereum is an open-source platform that anyone can use to create any coin they desire, such as USDTx in place of USDT. One should check the smart contract to confirm this, as a variation has been seen on the NFT marketplace OpenSea (5), where buyers can bid in Ether or stablecoins USDC or Dai because both are worth $1 each. A novice or exhausted user may accept a hefty bet of 79 Dai (6) on their 80-ETH NFT before realizing they have lost a quarter of a million dollars, similar to how the Dai symbol may be confused for Ether.

As there is no clear misrepresentation and individuals who make such claims in bad faith are unquestionably morally bankrupt, it can’t be claimed that the transaction in question is either illegal or fraudulent.

Transfer recall scam

In a transfer recall scam, a dishonest buyer of cryptocurrencies sends money to the seller as chargebacks, obtains bitcoin, and then files a false complaint with their bank or payment provider, claiming to have been the victim of a scam. Since neither banks nor police is likely to have a thorough understanding of how cryptocurrencies operate, some banks promptly return the money because it is difficult to investigate this scam.

Even if the real victim goes to court, it will still have to pay the government to hire a specialist to ensure that the user transferred cryptocurrency to the other user because the case will be very difficult to prove unless the victim can afford to hire a strong attorney and is prepared to spend money.

Wallet Import Scam

When the cryptocurrency vendor insists that the bitcoin must be imported rather than sent directly to the buyer’s wallet via a public address, this is known as “wallet import fraud. Then, using an option that enables the wallet to mirror an address it does not control, it imports a watch-only address into the wallet.

The unwitting buyer’s Bitcoin wallet must be known to the con artist to pull off the scam effectively. Therefore, consumers must be aware that disclosing their wallet information is risky. Similarly, users must not give their private keys or seed phrases to anybody else or pass them to their wallet for any reason.



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