It is now clear that as the crypto sector continues to expand, the number of scams and crypto scams is also constantly increasing. That’s why it is necessary for cryptocurrency users to act with caution and learn how to identify the various crypto scams. 

Crypto scam: how to avoid falling for cryptocurrency wallet scams

Being a crypto user today requires knowledge and implementation of some fundamental behaviors to stay safe from the continuous crypto scams and cryptocurrency frauds.

In this regard, here is a reminder that the crypto user should consider as the “Bible” for their security in the magical world of cryptocurrencies. 

First and foremost, what needs to be safeguarded is your wallet where your cryptocurrencies are stored. In general, hardware crypto wallets like Ledger have always been considered safer than online crypto wallets.

This is because hardware crypto wallet owners must themselves store their private keys (or seed phrase) to access and perform cryptocurrency sending, receiving, and exchanging operations.

On the contrary, instead, online crypto wallets are divided into centralized (the private keys and seed phrase are in the hands of the platform that offers the service) and decentralized ones, which allow the private key and seed phrase to be in the hands of the wallet owner. 

That being said, it is important for crypto users who store their private keys and seed phrase of their wallet, to save this data on a piece of paper, remembering not to share it with anyone. 

It often happens that the crypto user is robbed for having sent their seed phrase to fake support platforms, or messaging platforms, or that their cloud where such phrase is stored is hacked. Even saving the seed phrase on the computer is very risky. 

For owners of centralized crypto wallets, it is crucial to remember that their cryptocurrencies also belong to the platform that provides them with the custody service.

In this case, therefore, if the centralized platform were to suffer a hacker attack and be robbed, one’s funds could be part of the loot.

Crypto scam: knowing the techniques of trending cryptocurrency scams

As we were saying, the crypto sector is magical. Unfortunately, however, this magic has often been created to deceive users, making them believe too many beautiful and fascinating things. 

With this in mind, in the reminder to users to stay safe against crypto scams, it is of fundamental importance to know the various scam techniques. 

There are several reports that describe which crypto scam techniques are trending. 

For example, at the beginning of January 2024, Eric Jardine, Cybercrime Research Lead at Chainalysis, described the Approval Phishing technique that seems to be growing explosively in the crypto sector.

This technique involves the scammer gaining complete access to the victim’s wallet, through the signing of a fraudulent blockchain transaction. Approval Phishing is part of “romantic scams”, as it involves convincing the victim to sign fake approval transactions. 

Another insight is provided by the analysis of the REKT database by Smart Betting Guide, which has compiled the ranking of the top 5 biggest crypto scams in 2023 for funds lost.

At the top, the technique that has lost the most funds is “access control”, followed by “rug pull” and “oracle issue”. Right after the podium, there are then the crypto scam techniques called “flash loan attack” and “phishing”.

General behaviors

In conclusion, in order to avoid falling into crypto scams, it is important for today’s crypto users to acquire the right maturity. 

In the reminder for the crypto user who wants to stay safe, here are the general behaviors to implement:

• properly store your crypto wallet seed phrase;
• distrust in sharing private information such as security codes with anyone who asks for it, especially if the contact occurred randomly via SMS or email.
• beware of the “invented crypto magic”, the “too good to be true” like the too high returns, discounts and the offer of new tokens on unreliable platforms;
• investigate and delve into what are the various trending crypto scam techniques today;
• investigate and deepen the level of reliability of each platform with which you have a conversation or on which you decide to invest.