8 Warning Signs of Cryptocurrency Exchange Scams

Cryptocurrency exchange technology provides an avenue for buying and trading digital coins. This happens online chiefly through crypto wallets in mobile apps and crypto sites.

Scams on specific cryptocurrencies rise and fall with the popularity of the digital coin. After the launch of Bitcoin in 2017-2018, several tailor-made scams shot up. Crypto scams mainly target your crypto wallet as you’ll see in the common scams listed later in the article.

Today, Bitcoin and Ethereum are the two most popular and sought-after coins because of their high value.

Warning Signs of Fake Cryptocurrency Exchanges

Whenever you see any of these signs, it is highly likely that you have become the target of crypto scammers/hackers:

• Unsolicited offers to buy and trade in cryptos made through phone calls, texts or emails. These tend to be persistent and excessive to the point that they qualify to be called spam.
  
  
• Celebrity endorsements: Don’t trust a celebrity endorsement on cryptos on social media. Scammers create fake celebrity accounts on social media, then use them to gain followers and tweet about specific cryptos to drum up support.
  
  
• High registration and withdrawal fees: whenever you want to buy any cryptocurrency, always do you due diligence to check what it will cost you to register, trade or withdraw your coins. Fees higher when compared to the market average, are always a bad sign.
  
  
• Promise of high returns: this is the most common trick employed by scammers to get investors. Unusually high returns serve to hook the greedy who want to make money fast. Don’t fall for it.
  
  
• Guarantees and reassurances: any crypto that boasts of guaranteed returns is most likely a scam. There are no reassurances of returns in the crypto trading scene; only risks and secured principal amounts.
  
  
• New charges, Unannounced fees, and fake taxes: these are slapped on investors who request withdrawal of their digital coins. Sadly, by the time this is forced on you, you are already in the scam.
  
  
• Subtle suggestions and prodding to make ever-larger crypto investments: if your crypto dealer is always trying to persuade you to go in bigger and bigger in the next investment, you are probably in a scam.
  
  
• Recruitment of new investors: as a crypto trader, it is not your job to recruit other crypto investors. Offers for bonuses or awards for more cryptos predicated upon referring others are scam tactics of Ponzi schemes(link) and Multilevel marketing scams(link).

Common Crypto Exchange Scams

These exchange scams are primarily targeted at the digital crypto wallet.

Crypto Wallet Hacks

Requests to give your wallet PIN or password should be treated as fraudulent. Once a scammer/hacker gains control of your wallet they will rob you and transfer them to their own secure wallet. Never give your security logins to anyone.

Wallet hacks are achieved through compromised apps from Apple App store or Google Play Store. These apps collect and relay your security details to scammers.Online wallet hacks are broken into using credentials from phishing sites that mimic legit crypto trading sites.

These sites are by the hundreds of thousands online and still growing. Avoid following links from online ads, emails, or social media, that go to crypto trading sites. Most just lead to phishing websites. 

TIP: Only download and use verified crypto wallet apps.

Social Media Scams

Scammers are known to create an online sensation for certain cryptos through posting falsities about them on Twitter using fake celebrity accounts. They impersonate known figures in the Tech industry like Elon Musk, Bill Gates or even Warren Buffet. This serves the purpose of artificially inflating the value of a coin. This same tactic is seen in pump and dump crypto scams.

Steve Wozniak, Apple Cofounder, was used by scammers in a YouTube video that claimed to give free Bitcoin giveaways. The video promised to double any amount of Bitcoin deposited to the given blockchain address. But it was a scam as those who deposited simply lost their coins.

TIP: Don’t fall for social media crypto manipulations through “celebrity” accounts.

Cryptocurrency Exchange Customer Support

Scammers do pose as customer support then give directions to unwitting clients. The directions given include giving access to your crypto wallets which then are taken over by the scammers to transfer coins to their own wallets.

TIP: Never share your login details even with customer support.

Denial of Crypto Withdrawals

A very common scam is the denial of withdrawal of your own crypto like the bank denying you access to the cash in your account. These scammers ask you to make a bigger deposit to your account before you can withdraw what you already have.

TIP: Do not deposit any more coins to a wallet where you have enough to withdraw. You could still be denied access or worse, lose it all.

How to Protect Yourself from Crypto Exchange Scams

Here are some precautionary measures available to you:

• Use reputable crypto exchange wallets. Go for vetted cryptos that have been in the market for a while without any major criticisms. Cryptos are generally unrecoverable once lost, do your best to safeguard yours.
  
  
• Assess a new cryptocurrency wallet thoroughly before putting in your details and adding coins to it. Check out the company, their technology, available reviews and how they deal with questions about their product.
  
  
• Never follow links from emails and ads on social media that direct you to crypto sites to register or download apps. That’s a common way that malware gets into your devices. Instead, use your browser to navigate to those pages on a fresh window or tab. This way there is no association open to your social media account or email.
  
  
• Check a website for risk at www.scamadviser.com to see the site trust score. The greater percentage of crypto sites tend to be scams. Please beware.