As crypto adoption continues to grow, so does the number of scams targeting cryptocurrency users. Recognizing red flags like guaranteed returns, lack of transparency, and pressure to act quickly can help prevent you from falling victim to a crypto scam.

If you’ve been a victim of a crypto scam, reporting it to your exchange platform can increase your chances of recovery. Here’s how.

Reporting a Scam

With the rise of cryptocurrency, scammers are eager to take advantage of unsuspecting investors. Cryptocurrency scams can include fraudulent ICOs, pump-and-dump schemes, and fake exchanges.

Report Scammed Bitcoin (RSB) may also impersonate well-known companies such as Amazon, Microsoft, FedEx, or your bank and send you messages via email, social media, or a popup alert on your computer. They’ll say there’s a problem with your account or your money is at risk and that you need to buy crypto and send it to them immediately. This is known as cyber blackmail.

Never invest your money in something that you don’t understand. Read up on how a specific cryptocurrency works and what makes it different from cash and other types of investments. It’s also a good idea to get financial advice or guidance before investing your hard-earned money.

Identifying the Scam

As the cryptocurrency market grows, so do criminals trying to steal virtual assets. It’s important to recognize red flags such as guaranteed returns, lack of transparency, and pressure to act fast. You should also exercise a healthy dose of skepticism when it comes to social media crypto ads and investment opportunities.

Scammers may employ social engineering techniques to obtain private information, such as security codes, or trick an unsuspecting user into sending funds to a compromised digital wallet. These scams are often accompanied by other fraudulent activities such as phishing attacks or extortion emails.

Scammers can also lure victims with fake Initial Coin Offerings or token sales. Make sure you conduct thorough research on a project before investing and check for transparent team and white paper. This is especially true for non-fungible tokens, which should always have a clear use case and be verifiable.

Gathering Evidence

The growing popularity of cryptocurrency has fueled a surge in new types of fraud, including giveaways, romance scams, phishing, and blackmail. Other scams target crypto investors with bogus advance fees or false promises of profits from speculative investments in digital assets.

Criminals also pose as law enforcement agencies, utility companies or financial institutions to steal personal information or money from consumers. They use this info to impersonate their victims, then tell them they can solve the problem or regain access to funds by sending cryptocurrency to an address they provide.

Scammers can also lure people into investing by using a bogus initial coin offering, pumping up the value of a new crypto project with misleading marketing materials. They may promise big payouts with guaranteed returns, but no legitimate investment can make those guarantees — especially over short periods of time. If you fall victim to a crypto scam, keep transaction IDs to help investigators trace the funds back to the fraudsters.

Reporting to the Exchange

Crypto scams come in many forms, including giveaways, phishing, romance scams, extortion emails, blackmail, rug pulls, liquidity mining scams, fake initial coin offerings, and non-fungible tokens (NFTs). Recognizing red flags such as guaranteed returns, pressure to act quickly, and lack of transparency can help you avoid falling victim to a cryptocurrency scam. In addition, you should always report any suspicious activity to your local law enforcement and cryptocurrency exchange.

Scammers often use social media to promote fraudulent crypto investment opportunities. They may even pose as celebrities, businesspeople, or cryptocurrency influencers. Remember to always maintain a healthy level of skepticism when considering any opportunity that is promoted via social media. Liquidity mining scams involve scammers attempting to phish victims by creating a fake ICO or token sale, then moving all their stored cryptocurrency into the platform. This enables them to produce fake gains and keep victims invested while freezing their wallets under the guise of technical difficulties.