The rise of crypto has opened doors to new investment opportunities. However, alongside this innovation comes the risk of scams perpetrated by those seeking to exploit unsuspecting users. To understand the mechanics of these scams better, let's delve into a typical modus operandi employed by fraudsters, these scams typically follow a predictable modus operandi:



  • Scammers reach out to innocent users, offering lucrative online part-time jobs. 

  • Victims are asked to provide reviews of establishments, with small payments provided for each rating. 

  • Once trust is established, victims are invited to join Telegram groups focused on investment opportunities and directed to a fake cryptocurrency website.

  • Victims are coerced into investing larger sums, with promises of substantial returns.

  • Upon attempting to withdraw profits, victims find their accounts locked and are asked for additional payments under various pretexts. 

  • Victims encounter difficulties withdrawing their invested money, with excuses provided by the scammers.


To ensure safe crypto trading, investors must be aware of spotting scams, prioritise using platforms with robust security measures, and remain vigilant against fraudulent schemes. Being aware of these tactics is crucial for safeguarding against potential threats in the crypto landscape.


Spotting Fake Websites & Scams


One of the most prevalent scams involves fake websites designed to mimic legitimate crypto exchanges. These malicious sites, also known as phishing websites, meticulously replicate the appearance and feel of trusted platforms, aiming to trick users into surrendering their login credentials or transferring funds. To safeguard yourself from this tactic, it's crucial to meticulously examine the website address (URL) before logging in. A single typographical error or a swapped letter in the domain name can lead you to a fraudulent site.  


Furthermore, consider bookmarking the official websites of the exchanges you frequent to bypass the risk of typos altogether. 


Prioritising Using Platforms With Robust Security Measures


When choosing a platform to trade crypto, prioritising exchanges that are compliant and registered with the Financial Intelligence Unit – India (FIU-IND) is paramount. These exchanges operate within a strict regulatory framework, which includes mandatory Know Your Customer (KYC) procedures. KYC procedures act as a significant deterrent against fraud by verifying the identity of users. Opting for a non-compliant exchange exposes you to a multitude of risks. 


Firstly, in the event of disputes or scams, you may have limited options for recovering your funds or filing official complaints. Secondly, non-compliant exchanges face the possibility of government-imposed URL blockage, which could restrict your access to your invested assets.


Impersonation & Fake Giveaways


Like in any investing app, vulnerabilities frequently stem from human factors rather than flaws in the technology. Social engineering tactics are a common weapon in the arsenal of crypto scammers. These tactics involve manipulating users through psychological ploys to disclose sensitive information or make impulsive investment decisions. To protect yourself from such schemes, treat unsolicited messages, regardless of how legitimate they may appear, with a healthy dose of scepticism. 


Never share personal information or click on links embedded within these messages, even if they claim to originate from trusted sources. Social media platforms can also be breeding grounds for scammers impersonating prominent figures within the crypto industry. Before engaging with anyone online, it's essential to verify their account details thoroughly.


Always Conduct Your Own Research Before Investing


Finally, the golden rule of crypto investing: always conduct your own research (DYOR) before committing your funds. 


Don't be swayed by pressure tactics or promises of guaranteed returns. Meticulously evaluate any platform or investment opportunity before taking the plunge.


By adhering to these simple guidelines, investors can navigate crypto trading with confidence. Remember, security is the cornerstone of success for any investment. 


Investors must keep themselves updated with the latest news and developments in the crypto space. Awareness of ongoing scams and frauds can help them identify red flags and avoid falling victim to them.


Take Swift Action If Needed


Choose compliant exchanges with robust security measures, and cultivate a sense of healthy scepticism when dealing with unsolicited messages or investment opportunities. 


If you ever become a victim of any such scam or online fraud, it's vital to take swift action to minimise the consequences. Notify law enforcement authorities and the appropriate platforms where the scam took place. Sharing your encounter can also contribute to preventing others from being deceived by similar scams, as it increases awareness within the community.


Take prompt measures to safeguard your assets, such as updating passwords and strengthening security measures for investments. 


(The author is the Chief Information Security Officer at CoinDCX. This article has been published as part of a special arrangement with CoinDCX) 


Disclaimer: The opinions, beliefs, and views expressed by the various authors and forum participants on this website are personal and do not reflect the opinions, beliefs, and views of ABP Network Pvt. Ltd. Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Cryptocurrency is not a legal tender and is subject to market risks. Readers are advised to seek expert advice and read offer document(s) along with related important literature on the subject carefully before making any kind of investment whatsoever. Cryptocurrency market predictions are speculative and any investment made shall be at the sole cost and risk of the readers.