10 Things You Need to Know About Crypto Scams in 2024

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Last year, almost $2 bil­lion was lost in cryp­to. The very decen­tral­ized nature and irre­versible trans­ac­tions of cryp­tocur­ren­cies expose the land­scape to sig­nif­i­cant vul­ner­a­bil­i­ties. Retriev­ing funds post-cryp­to scam becomes an insur­mount­able chal­lenge, neces­si­tat­ing vig­i­lance, ear­ly detec­tion and cau­tious engage­ment as para­mount defens­es. Here are the top 10 things you need to know about cryp­to scams in 2024. 

As market rises, more scams appear

Cryp­to scams cor­re­late with mar­ket trends. In bull­ish mar­kets, unqual­i­fied traders rush in, while scams gen­er­ate less rev­enue dur­ing declines. Over­all, cryp­to scam­ming and hack­ing rev­enue have been steadi­ly declin­ing since 2021, but scam­mers get more inventive.

Pump-and-dump is here to stay

Mar­ket sen­ti­ment dri­ves pump-and-dump scams. Scam­mers inflate a new cryp­to’s price through hype, entic­ing investors to lat­er sell and prof­it. In 2022, 24% of new tokens were pump-and-dump schemes, illus­trat­ing their prevalence.

AI scams gaining momentum

AI advances equip scam­mers with decep­tive tools, such as AI-pow­ered chat­bots. Recent­ly, the CFTC warned of scams using AI promis­es, exploit­ing its grow­ing use for false claims. Sev­er­al fraud schemes were iden­ti­fied, includ­ing one caus­ing a loss of 30,000 Bit­coins ($1.7 billion).

Deepfake vieos spreading

Last year saw a grow­ing num­ber of deep­fake video ads, and the trend con­tin­ues into 2024. Fraud­sters often exploit high-pro­file fig­ures’ images and AI-gen­er­at­ed videos to endorse fraud­u­lent cryp­to projects uti­liz­ing deep­fake technology.

X is vulnerable to attacks

The infa­mous SEC’s offi­cial account is mere­ly one, although mem­o­rable, event in the series of recent X hacks. Appar­ent­ly, the cryp­to com­mu­ni­ty should beware of social net­works’ vul­ner­a­bil­i­ty to hacks and mar­ket manipulation.

Pig butchering might be biggest scam in 2024

Pig butcher­ing, or romance scams, is gain­ing more atten­tion as a pri­ma­ry threat. This type of scam uses emo­tion­al manip­u­la­tion on social media or dat­ing apps. Scam­mers cre­ate a fake iden­ti­ty, engag­ing vic­tims before dis­cussing invest­ments. Vic­tims often hes­i­tate to report, con­tribut­ing to underreporting.

Investment scams

Cryp­to invest­ment scams per­sist, with a 23% increase report­ed in 2023. Scam­mers promise high returns and quick prof­its, but invest­ment scams lack trans­paren­cy about fund use and under­ly­ing mech­a­nisms. Legit­i­mate projects offer detailed infor­ma­tion about goals, tech­nol­o­gy and the team.

Phishing reported more frequently

Phish­ing scams tar­get cryp­to users through deceit­ful emails and links, drain­ing $300 mil­lion in 2023. These attacks have been report­ed quite fre­quent­ly: Meta­Mask, Block­stream and Tre­zor wal­lets recent­ly faced new and dan­ger­ous phish­ing attacks.

Double scams exploiting recent victims

With more invest­ment scams end­ing up in court con­vic­tions, oth­er fraud­sters lean into the vic­tims’ search for recov­ery. The rise of “dou­ble scams” adds com­plex­i­ty to cryp­to fraud. Vic­tims face a sec­ond wave from firms pos­ing as recov­ery agents, promis­ing to reclaim lost funds for fees.

Simple tips to avoid crypto scams

  • Exer­cise cau­tion with promis­es of big prof­its, dou­ble invest­ments, or free money.
  • Check for com­mu­ni­ca­tion errors.
  • Avoid trans­ac­tions with unclear details.
  • Stay alert for con­tracts and manip­u­la­tion tactics.
  • Ques­tion unusu­al endorse­ments from influencers.
  • Adopt vig­i­lance and research before con­sid­er­ing any investment.

 For more infor­ma­tion, check our ulti­mate guide How To Avoid Cryp­to Scams in 2024.

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