With Bitcoin, the leading cryptocurrency, trading around $100,000 (approximately ₱5,800,000) and many other coins experiencing significant surges, scammers are taking advantage of the growing interest in crypto to defraud new investors.
In November 2024, when the price of Bitcoin surged from $68,000 to almost $100,000, the Cybercrime Investigation and Coordinating Center warned the public about a rise in crypto and dollar investment scams urging vigilance, due diligence, and verification of offers to protect against fraudulent schemes exploiting the growing interest in cryptocurrency investments.
Moreover, in the first half of 2024, over 50,000 investment scams were reported, totaling nearly $2.5 billion in losses having already collected $679 million in cryptocurrency, according to data from the Federal Trade Commission.
Accordingly, data from the 2023 and 2024 “A Global Survey on Crypto and Web3” by Consensys and YouGov show that one of Filipinos’ biggest concerns about entering the web3 space over the past two years has been fear of scams.
In this article, BitPinas highlights some of the latest schemes used by fraudsters and provides tips on how to avoid falling victim.
What’s the significance? This article could serve as a crucial resource for the local crypto community, raising awareness about emerging scams and providing practical guidance to protect investors amid the growing popularity of cryptocurrencies.
Types of Crypto Scams and How to Avoid Them
Romance/Love Scams
A romance scam is a fraudulent scheme where scammers pose as romantic partners to emotionally manipulate victims into sending money, often using fake identities, love-bombing, and fabricated financial emergencies to exploit trust for financial gain.
Related Reports:
- In October last year, the National Bureau of Investigation arrested seven individuals in Angeles City, Pampanga, for their involvement in global cryptocurrency scams targeting Americans, Middle Easterns, and Europeans, employing tactics like phishing, love scams, and impersonation, with investigations ongoing to uncover broader networks.
- In August, the Philippine National Police also raided an unregistered crypto scam hub in Parañaque City, arresting over 400 workers, including foreign nationals, involved in fraudulent investment and romance scams.
Fake Mining Scheme
Certain companies falsely claim to offer Bitcoin cloud mining services, taking money from users without ever mining $BTC. Many fall victim to these scams due to their eagerness to acquire cryptocurrency, despite the presence of legitimate services alongside fraudulent ones.
Related Reports:
- In the Philippines, the Securities and Exchange Commission has been regularly issuing advisories to alert the public about unregistered platforms and unauthorized investment schemes that may be fraudulent, including:
- Check more entities here: https://bitpinas.com/tag/sec-advisory/
Pump and Dump Scheme
Pump and dump schemes usually involve an individual or group investing in a token, aggressively promoting it to drive up its price, and then selling off their holdings for a large profit. This often leads to a sharp drop or complete collapse in the token’s price, affecting unsuspecting investors.
Related Report:
- Last September 19, 2024, multiple local X accounts, including accounts of mainstream media publications GMA Network and ABS-CBN News were hacked to promote the $HACKED token in a pump-and-dump scheme, misleading followers and manipulating the token’s market value.
Fake Cryptocurrency Exchanges
Another form of crypto investing fraud involves convincing investors to transfer cryptocurrency to a new exchange or platform, promising exceptionally high returns. Scammers build trust by showcasing false profits on the platform, allowing partial withdrawals to encourage further investment.
- Eventually, they lock the investor’s account, demanding taxes or fees. Once those are paid, they abscond with the cryptocurrency and shut down the platform.
Related Reports:
- On January 5, 2025, Vietnamese authorities arrested four suspects for running a crypto scam through a fake mining website, BitMiner, defrauding over 200 victims of $157,300, part of a broader global crackdown on crypto-linked fraud schemes.
- In 2023, a Filipino investor lost ₱1.4 million after being scammed by a Singaporean national who convinced him to invest in a fraudulent cryptocurrency exchange promising quick high returns.
AI Deepfake Fraud
AI deepfake fraud refers to the use of artificial intelligence (AI) and machine learning to create convincing yet fake media, such as videos, audio, and images. Deepfakes manipulate the visual and auditory features of a person to impersonate them, making it difficult for humans to distinguish between real and fake content.
- Fraudsters leverage deepfake technology for malicious purposes, such as creating synthetic identities for fraudulent account openings, phishing scams, account takeover fraud, and even extortion.
Related report:
- While the year is just starting, a Hong Kong crime syndicate was dismantled after defrauding over $4.37 million through deepfake romance scams, where they used AI-generated images of attractive women to lure victims into investing in fake virtual assets across Taiwan, Singapore, and Malaysia.
Pig Butchering Scam
The pig-butchering scam is a deceptive cryptocurrency investment fraud where scammers build trust with victims through fake investments, often beginning with seemingly innocent chat conversations.
- The scammers promise high returns and create fake brokerage platforms, encouraging victims to invest large sums. Once victims invest, the scammers disappear, leaving them with significant financial losses.
Related Report:
- Last year, Indonesia’s Criminal Investigation Agency (Bareskrim), with assistance from Binance and Tokocrypto, dismantled a major crypto scam involving fraudulent trading, seizing $200,000 in stolen funds, underscoring the critical role of public-private collaboration in combating financial fraud and enhancing crypto security.
Clipper Malware
Clipper malware is a type of malicious software that targets cryptocurrency users by intercepting and altering wallet addresses copied to a user’s clipboard during transactions.
- When a victim copies and pastes a wallet address for a crypto transfer, the malware replaces it with the attacker’s address, leading to funds being sent to the hacker’s wallet instead of the intended recipient’s.
- This malware is often distributed through unofficial apps and plugins, particularly on Android devices, though iOS users are also at risk.
Related Reports:
- In 2023, a malware disguised as Tor browser installers stole $400,000 in cryptocurrency from nearly 16,000 users worldwide, primarily affecting Russia, Ukraine, and the U.S., with the malware silently replacing wallet addresses copied to the clipboard.
- Binance also recently warned of the rising threat of “clipper” malware urging users to avoid unofficial apps and verify addresses to prevent theft.
Impersonation Scheme
Scammers pretend to be trusted individuals or organizations, such as customer support representatives from cryptocurrency exchanges. They deceive victims into disclosing sensitive information or sending funds or buying crypto assets.
Related Reports:
- In December, the official X account of Coins.ph was hacked to promote a fake $COINSPH token on the Solana blockchain.
- Last July, the YouTube account of Filipino band Ben&Ben, along with those of other OPM artists like SB19 and Rico Blanco, was hacked to promote an $XRP-related crypto scam.
- Also Read: Top Crypto Exploitation Methods in 2022
How to Avoid These Schemes:
Do Thorough Research
- Always research any platform, investment opportunity, or individual being considered. Look for reviews, ratings, and information from trusted sources.
- Remember the industry’s golden rule: DYOR (Do Your Own Research).
Use Trusted and Official Sources
- Only download apps, wallets, and software from official sources such as the Google Play Store, Apple App Store, or trusted websites.
- Avoid third-party downloads and unverified platforms.
Verify Identities
- When communicating with someone online, especially if they request money or propose investments, confirm their identity through video calls or trusted verification methods.
Be Skeptical of Unrealistic Promises
- Avoid schemes that promise high returns with little risk. If it sounds too good to be true, it probably is.
Never Send Money to Strangers
- Be wary of requests for money, especially from individuals who have not been met in person.
- Avoid sending cryptocurrencies or funds unless complete trust has been established.
Check for Red Flags
- Watch out for high-pressure tactics, unsolicited messages, and sudden investment offers. Take a step back and reconsider if rushed to make decisions.
Double-Check Transactions
- Always manually verify wallet addresses before confirming a transaction to ensure they have not been altered by malware or other schemes.
Stay Updated on Threats
- Keep informed about common scams, malware threats, and fraudulent tactics.
- Regularly review news and advisories from trusted authorities such as local governments or cybersecurity firms.
Enable Security Features
- Use two-factor authentication and strong, unique passwords on all accounts.
- Secure devices with antivirus software and avoid clicking on suspicious links or opening untrusted attachments.
Use Reputable Exchanges
- Stick to well-known, regulated cryptocurrency exchanges with strong security measures and positive reviews.
- Always verify that an exchange is legitimate before depositing funds.
Avoid Giving Out Personal Information
- Be cautious about sharing personal, financial, or cryptocurrency-related information. Scammers often use this to exploit your trust.
Zoom Out: Check out these other BitPinas articles on how to protect Bitcoin and other digital assets:
This article is published on BitPinas: Be Alert: Types of Crypto Scams and How to Avoid Them
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