7000 Americans scammed out of $1900 in cryptocurrency scams

Cryptocurrency scams

If you believe the US Federal Trade Commission, an agency tasked with protecting American consumers, the number of reported cryptocurrency scams is skyrocketing. In a May 2021 post, the FTC reports that cryptocurrency scams have exploded since October 2020 resulting in losses over that period of around $80 million USD. The average loss per reported scam? $1900 USD.

Common cryptocurrency scams

According to the FTC, some of the most commonly perpetrated crypto scams are:

  • giveaway scams where members of particular online crypto communities get free coins if you send your coins to a posted wallet address
  • bogus websites with scam investment opportunities offering block buster returns using fake testimonials
  • Elon Musk impersonators that have duped unsuspecting coin holders out of $2 million collectively
  • Online dating apps used to lure people into cryptocurrency investments (yes, you really did read that!)
Are you being scammed? Ask yourself this before you send your crypto.

So who is getting duped out of their dough?

Apparently, people aged 20 to 49 were 5 times more likely to get caught up in a cryptocurrency scam. But this probably a reflection of the crypto demographic more than anything. Older crypto investors are losing in smaller numbers but their losses are bigger at an average of over $3000.

How to spot cryptocurrency scams

You’ll notice that most the scams above involve some kind of impersonation – of an individual, a Project, a crypto community group. The first thing you need to do is verify who you are dealing with and that they are legit. Before you invest, check them out. Google the name of the company, entity or cryptocurrency, plus words like “review,” “scam,” or “complaint.” See what others are saying.

Another commonality between all of these scams are the claims of big payouts, guaranteed money, and free returns. Scammers prey on greed and ignorance. While crypto markets are know for their incredible market growth rates, these are generally found buying small cap coins and tokens from legitimate exchanges. If you come across an ‘investment opportunity’ that seems too good to be true then it just is.

The third characteristic of scams is the double down investment offer. A request out of the blue that you double your initial investment in order to get the promised returns.

Another common feature of these types of scams is that they are unsolicited. Someone reaches out to you to join a crypto community or promote a killer crypto investment opportunity. If this happens over social media, via email, in Youtube comments or in any message group forums its a scam.

Finally, all of these scams ask you to send your crypto to a public wallet address that they have posted themselves. Don’t do it if you ever want to see your coins again! Instead, leave your crypto in your hardware wallet and only send it to addresses you have verified or have been generated within a secure website or app. NEVER send your crypto to wallet addresses sent to you in unsolicited emails, social media, group chat apps like Telegram and WhatsApp.

And if you do get suckered in by evil scammer and live in the US, you can report the crypto scam here.

Cryptocurrency scam cons millions out of this Telegram community

cryptocurrency scam

If you’re new to the cryptoverse, Telegram is a major community hub for different cryptocurrency communities. It’s how exchanges, projects and developers keep their communities up to date on the latest project partnerships and milestones, as well as incentive and reward offers. It’s no wonder then that it’s also fertile ground for a cryptocurrency scam or two. If you join a crypto community on Telegram, in this article we’ll cover what to look out for so you can keep your crypto safe from scammers.

Wall Street Bets crypto pumps scam

Many of you will have heard of the famous David and Goliath Wall Street Bets Reddit forum short squeeze on GameStop. Well as recently as May 2021 a whole bunch of Wall Street Bets members were parted from their crypto in a nasty Telegram cryptocurrency scam. Here’s what happened.

The scammers targeted the Telegram account ‘Wall Street Bets crypto pumps”, offering members of this group the opportunity to buy a ‘new coin’ WSB Finance before it was to be listed on exchanges. The lure of the so called deal? As soon as the ‘new coin’ WSB Finance was listed on popular exchanges it would skyrocket in price making any early coin holders a bunch of easy money.

Sounds totally fly right?

The scammers borrowed the authority and renown of the Wall Street Bets Reddit group and founders to legitimise their scam and this is a trait of Telegrams cryptocurrency scams. The scammers asked the WSB crypto pumps group members to send BNB (Binance coin) and ETH (Ethereum) to a public wallet address and then to make contact with their ‘token bot’ on Telegram to receive their WSB Finance coins.

The crypto scammers then persuaded these unsuspecting Telegram group members to double their initial BNB and ETH deposits buy sending out a group message that implored members to make a second payment or risk losing everything. The story went that a second deposit was needed due to some technical issues with their ‘token bot’.

How much did people lose?

Now because blockchain is a transparent ledger some clever folk got onto the Binance Smart Chain and found that a cool 3500 BNB tokens were removed from the public wallet address posted by the scammers soon after the Telegram ‘Initial Coin Offering’ was posted. At a price of around $600 USD per BNB at the time, it’s thought that group members were duped out of over $2 million. And that was just the BNB and doesn’t even count the ETH lost to the scam.

cryptocurrency scam

3 Telegram cryptocurrency scams to know about

When it comes down to it, impersonating a person or group in Telegram is super easy. So here are the different types of scams that you’ll need to watch out for on Telegram if you want to keep custody of your crypto assets:

Fake rep scam

This is where you are actively contacted on Telegram by someone claiming to be an Executive or recruitment representative of a known crypto entity like a Project or a crypto exchange. The scammers generally try to convince you that you’ve been offered a job and will groom you into providing your personal and other details so they can steal your coins.

Giveaway scam

Scammers will impersonate known groups, persons or entities on Telegram and set up fake Telegram groups using look-a-like profile logos. The groups appear to have loads of members, but these are all paid bots not real people. The scammers entice people to join these groups and post fake giveaways in the group chat. The ‘giveaways’ are often dressed up in the cloak of a competition to win coins or an Airdrop of tokens associated with a particular coin. This is where the giveaways appear legitimate because crypto exchanges do run these promotions legitimately from time to time. The kicker is, to participate you need to send your coins to a certain address, which is also posted in the chat.

Any crypto exchange will tell you that they never require your coins to be sent to a third party address to join their Airdrops or competitions.

Coin listing and ICO scams

These are laid out in the Wall Street Bets crypto pumps example above and are pretty prolific on Telegram. If you want to find small cap coin gems that are not listed on the big exchanges, better to go somewhere like UniSwap or Kucoin then try to become a millionaire on Telegram.

How to keep your crypto safe from Telegram scams

It’s simple: just don’t send your coins to any public addresses posted on the Telegram app. Full stop, end of story.