Cryptocurrency has revolutionized the financial world, but scammers exploit this unregulated market to con people out of their money. Here’s what you need to know about crypto scams.

How the scams play out

Crypto scams can take several forms. Here are the most common variations:

• Crypto investment scams. In this variation, an alleged investment manager reaches out to a target and promises to grow their money on the condition that they purchase cryptocurrency and transfer it to an online account.
• Crypto celebrity scams. Here, a scammer impersonates a celebrity who promises to multiply a target’s cryptocurrency and provides a link for sending the crypto.
• Crypto romance scams. In this scam, an online love interest asks their virtual date to send money via cryptocurrency for an investment opportunity.
• Crypto customer service scams. Here, scammers pretend to represent well-known companies, like Amazon or Microsoft, or your financial institution. They’ll send a message by text, email or social media, claiming there’s a problem with your account. In order to fix it, they’ll say, you must buy crypto and send it to them.

Red flags

Watch out for these red flags, which can alert you to a possible crypto scam.

• Unsolicited contact
• Guaranteed high returns
• Lack of transparency
• Pressure tactics
• Unregistered platforms

How to avoid falling victim

Before investing in crypto, thoroughly research the company behind the opportunity. Read reviews, verify credentials and look for details about their team members and physical location. Be sure to only use reputable platforms as well as regulated exchanges and wallets. It’s also important to utilize hardware wallets and enable two-factor authentication to protect your holdings.

If you’ve been scammed

If you’ve fallen victim to a crypto scam, take these steps to mitigate the damage.

First, gather all communications, transaction records and any relevant information related to the scam. Next, contact local law enforcement and financial regulatory bodies to file a report. It’s equally important to inform your financial institution and any involved crypto exchanges or wallets about the scam. Finally, consult with a legal professional who’s experienced in cryptocurrency-related cases to explore potential remedies.

As you recover from the scam, be cautious of individuals or companies promising to recover your lost funds for a fee — these are often additional scams.

Cryptocurrency is exciting and offers a relatively new landscape for investment opportunities. Don’t let scammers ruin your crypto experience! Follow the tips here to stay safe.