Crypto Scams

Undoubtedly the crypto space is like the wild wild west. There are plenty of robbers out there who are seeking to make a quick buck from unsuspecting and naïve investors. Some of these scams I’ve seen and been close to falling for others I’ve learnt about them through friends. Here is a brief guide that will help you spot scammers and how to avoid them.

Typically scammers lure people in with deals that look way to good to be true. They often use beautiful men or women that have been photoshopped. They portray that “Insta Image” with an expensive car and lavish lifestyle i.e. luxury hotels, fancy holidays, costly restaurants and yes you’ve guessed it plenty of photos with loads of cash! These scammers will use social media and ecommerce platforms including: Facebook, WhatsApp, Instagram, LinkedIn, Gumtree, Wish, Telegram and Twitter etc. Often they use fake accounts that take advantage of the end to end encryption some of these apps/ platforms offer to get away with what they are doing. They will try and befriend you and pull emotional strings in order for you to give in to them and accept the requests that they are making towards you.
Don’t be fooled by them!

Trading scams
These scam come in all shapes and sizes from those offering to take money from unsuspecting investors without much knowledge in crypto with claims of high rewards through trading or simply taking the risk and difficulty out of investors buying cryptocurrencies direct, giving the impression they can be the trusted middleman.

PetronPay
Another scam running is PetronPay. The CEO, Johnny Grant seems to be a fictitious actor as there is no information on him other than with PetronPay. This company has a strong social media presence with investors from all around the world. Many see him as a frontman for a scam organisation that has its address in Zurich, Switzerland and is on the warning list for Finma, the Swiss government’s financial regulator:

https://www.finma.ch/en/finma-public/warning-list/petronpay/

There are many websites that talk about this being a Ponzi/ Multi Level Marketing (MLM) pyramid scam where pay-outs are given to older investors as new investors join, this is done through a referral scheme with deposits made in Bitcoin. Previously pay-outs were given in Bitcoin but this has been changed to an ERC20 token named PETRON which has a price that goes up just as the pay-out is sent and dips when the deposit goes into investors accounts.

https://uk.trustpilot.com/review/petronpay.com

https://reportscamonline.com/online-broker-scam-blacklist/petronpay-scam-broker-review/

https://brokerdispute.com/petronpay-review-scam-broker/

https://behindmlm.com/companies/petronpay-collapses-initiates-petron-token-exit-scam/

I have first hand experience of this company and there is no representative available to contact in order to retrieve investments once they have been deposited. This is another obvious sign that the company is running a scam.

Fake mining
Fake mining I’ve seen used with Coinbase wallets where basically once you access this scam mining website the dApp steals cryptocurrency from out of your wallet as its doing the fake mining. As its a Coinbase Wallet you’d think that they wouldn’t be able to run this type of a scam but evidently this is not the case.

Dusting attack

Is where a small amount of crypto known as “dust” is sent to hundreds or thousands of wallet addresses (where users store their cryptocurrencies). The attack is used like a phishing scam when once the token is opened inside the wallet this reveals to the people who instigated the attack personal details connected with the holder of the crypto wallet. Criminals, as well as government agencies may use this form of attack in order to gain information on their targets, thankfully many cryptocurrency wallets will make users aware that they shouldn’t open a token in their wallet which came from an unknown source and as long as they are not opened they won’t harm you in any way shape or form.

More info on: Crypto Dust and Dusting Attacks Explained | Gemini (opens in new window)

Pump and Dump Scam

Companies pump a specific token through the media and other sources perhaps using celebrities and marketing schemes to do this. Then as more and more people buy in thus inflating the price those who are running the scam then sell their large amounts of tokens taking a hefty profit. After the large sell off this then causes the price to dip and those investors who bought in during the hype now see that they’ve made a loss. A recent scam like this has been reported with a lawsuit against the promotion company behind the cryptocurrency EthereumMax or EMAX (logo pictured below) which had famous faces like Floyd Mayweather and Kim Kardashian used to advertise it, using their huge amount of influence to endorse this crypto token. The lawsuit claims these celebrities and the EMAX promotion company made misleading comments that brought in investors and thus inflated EMAX’s price, for a limited period, during this time those who were part of the promotional team sold their tokens and made a hefty profit.

What to do!

If you do find that money has gone out of your account report it immediately to your bank. They will then ask you to fill out a report of what happened and will encourage you to speak to the police and report it.

As soon as you suspect a scammer report them and block them.

Cryptoworld.host

There are also many private organisations that assist people in returning money lost through fraud and cyber crimes.

The top scam recovery companies I’ve found are:

If you have been scammed or know of a fraudulent business and want to spread awareness of them click the links below:

https://ethicsm.com/scam or https://twitter.com/Ethics_Movement