• The rising popularity of cryptocurrency has attracted a surge of scammers preying on both new and experienced investors.
• Common scams include fake exchanges, phishing emails, Ponzi schemes, impersonation fraud, and malware attacks, leading to significant financial losses.
• Online security expert Richard D. advises using reputable exchanges, enabling VPN protection, and staying vigilant to navigate the crypto market safely.

Cryptocurrency has never been more popular. Bitcoin continues to hit record highs, and even public figures like Donald and Melania Trump are launching their own coins. 

With millions joining the crypto frenzy, scammers are seizing the opportunity to exploit the uninformed. “Scammers thrive on hype,” says Richard D, an online security expert at VPN Pro. “The more people rush into crypto, the easier it is for bad actors to exploit their lack of knowledge.”

From fake exchanges to phishing schemes, here are some of the most common crypto scams and how to avoid them.

8 Common Crypto Scams and How to Avoid Them

1. Fake Cryptocurrency Exchanges

Scammers create convincing replicas of legitimate crypto platforms, luring users to deposit funds that become impossible to withdraw. These fake exchanges are usually promoted through phishing links and social media ads, making them seem authentic.

How to Stay Safe:

Verify exchanges through independent reviews.

Ensure the platform is registered with relevant regulatory authorities.

Stick to reputable exchanges like Coinbase, Binance, or Kraken.

2. Phishing Emails

Fraudsters send emails that mimic official crypto platforms, tricking users into clicking malicious links or sharing private keys. These emails often contain urgent warnings to pressure victims into taking action.

How to Stay Safe:

Double-check email senders and website URLs.

Never click on unsolicited links.

Remember, legitimate platforms will never ask for private keys via email.

3. Ponzi Schemes

These scams promise guaranteed high returns by using funds from new investors to pay earlier participants. They rely on testimonials, influencers, and hype to attract victims before ultimately collapsing.

How to Stay Safe:

Be sceptical of investments that promise high, consistent returns.

Research thoroughly and avoid schemes that depend on recruitment.

4. Fake Initial Coin Offerings (ICOs)

Scammers create elaborate websites, whitepapers, and marketing campaigns to promote non-existent blockchain projects. They collect funds from investors before vanishing.

How to Stay Safe:

Research the project’s team, partnerships, and technology.

Look for verified information on trusted blockchain platforms.

5. Pump-and-Dump Schemes

Scammers buy large amounts of a low-cost cryptocurrency, artificially inflate its value through hype, then sell off their holdings, leaving other investors with worthless coins.

How to Stay Safe:

Avoid investments driven by social media hype.

Focus on cryptocurrencies with transparent teams and real-world use cases.

6. Impersonation Scams

Fraudsters create fake profiles of celebrities, influencers, or crypto companies, promoting fake giveaways or investment opportunities. Victims send funds, only for the scammer to disappear.

How to Stay Safe:

Verify accounts with blue checkmarks.

Remember, legitimate figures never ask for upfront payments for giveaways.

7. Social Media Scams

Scammers use fake accounts or groups on platforms like Twitter, Facebook, and Telegram to promote fraudulent token giveaways, phishing links, and fake ICOs.

How to Stay Safe:

Always verify the authenticity of social media accounts.

Never share wallet details, private keys, or sensitive information.

8. Malware Attacks

Some malware can infiltrate devices via fake crypto apps, phishing links, or malicious downloads. Hackers use these tactics to steal private keys or redirect transactions to their own wallets.

How to Stay Safe:

Keep antivirus software updated.

Download apps only from trusted sources.

Double-check wallet addresses before confirming transactions.

Why a VPN is Essential for Crypto Security

Beyond avoiding scams, protecting online activity is neccessary for crypto users.

A VPN (Virtual Private Network) creates a secure, encrypted connection, hiding users’ IP addresses and safeguarding their online transactions. Public Wi-Fi networks are especially risky, as hackers can intercept data—but a VPN protects against these threats.

Some VPNs, like VPN Pro, offer malware blocking, ad blocking, and phishing protection, providing an extra layer of security against crypto-related scams.

“The rapid rise of cryptocurrency has transformed the way we think about money, but it has also opened the door to unprecedented levels of online fraud,” says Richard D.

“Staying ahead of these threats requires a proactive mindset. Educate yourself about the risks before entering the crypto market. Use trusted sources to research platforms, and never rush into an investment based on pressure or promises of quick returns. 

“Secure your online presence by avoiding public Wi-Fi when accessing trading accounts, or better yet, use a VPN to safeguard your activity. By staying informed and cautious, you can navigate the crypto space confidently and minimize your risk of falling victim to scams.”

The crypto market brings incredible opportunities but also huge risks. Scammers prey on fear, urgency, and misinformation—so staying informed is the best defense. 

In using reputable exchanges, verifying sources, and securing your online presence with tools like VPN Pro, you can trade safely and protect your investments.

Beginner investors are targeted because of their limited knowledge, and high risk appetite. Investing is not a get rich quick scheme as it takes time to build generational wealth. The earlier you start investing, the better for you as the best time to plant a tree is now.

The Economic & Financial Crimes Commission has also warned about scams in Nigeria and advises you to take precaution. These are the ways how social media artists dupe new investors.

Investment Scams 

1. Forex Scam

Forex trading is seen as an easy path to wealth and many don’t take time to learn how it operates before diving in.

Many unregulated forex scammers have social media handles where they advertise with promises of huge rewards and zero risk, to stoke curiosity.

Once you register with them and deposit funds, they let you download an app but the money you see in the app is fake- just like a video game!

When you finally want to withdraw your earnings, you are given excuses and told to deposit more funds, and this goes on till you get tired, and forfeit your money.

In Nigeria retail forex trading is not regulated by the Securities & Exchange Commission (SEC), so Nigerian traders mostly trade via South African forex brokers who are regulated by the FSCA, to get access to trading platforms.

Scam artists take advantage of this absence of regulation to advertise unlicensed brokerages on social media.

Some scam artists might even refer you to authentic forex brokers, but ask you to click on a link they send you to enable you fund your trading account, so you can qualify for a bonus. This malicious link redirects you to scammer controlled websites, and your payment goes straight to the scammer.

2. Bond Scam

When you buy a bond, you lend your money to the government or a company for a period, and you will be paid interest annually. At the end of the bond lifecycle, your principal is refunded to you.

Bond scammers may take your money and pay you interest annually, but at the end of the cycle which could be many in several years, your principal is not refunded to you.

You can fall victim to these scammers through fake advertisements on social media platforms while searching online for business opportunities.

They also offer higher interest rate than what the Nigerian government is willing to offer, so as to attract you. For information on Nigerian government bond auctions, the Debt Management Office (DMO) has all the information you need.

3. Ponzi Schemes/Crowd Funding Scam

First, Ponzi schemes are fraudulent ventures that pay existing investors with money collected from new investors.

You may come across them through advertisement on your social media, promising you returns that are suspiciously high like up to 50 % monthly without a loss. Nigerians have lost over N300 billion to Ponzi schemes and online speculation in the past years.

Modern day Ponzi schemes rely on social media for propagation, as they reach a wider audience and also enjoy anonymity that social media offers them.

Ponzi scheme beneficiaries are usually the early investors, and the scheme depends largely on a steady influx of new investors and when this is no longer sustainable, they scam artists close shop and disappear.

Law enforcement may also go after older investors who benefitted from initial payments, to retrieve the money in an operation called a ‘clawback’. 

Secondly, Crowd funding refers to many people contributing money online to start a business. SEC has directed how crowd funding should be carried out but most social media scam artists just raise money from people and disappear. This has prompted SEC to warn investors about patronizing unregistered crowd funding investments.

4. Pump and Pump Scam

This is a fraudulent scheme where the prices of stocks are artificially inflated through false or exaggerated information

Social media platforms like Reddit, whatsapp, etc. are used to create and spread memes about a stock. These memes end up going viral, and they usually say the stock is ‘going to the moon’ or is the next big thing.

This causes a frenzy and people start buying out of fear of missing out. The scam artists also buy huge volumes of shares.

Once the price has risen considerably, the scammers suddenly offload or sell their huge volumes causing other observers to follow suit and the price crashes.

Those who get in late on the trend, and those who don’t sell off quickly are left with huge losses when prices tank. An example is the GameStop saga where even renowned hedge funds lost billions to the short squeeze.

Account Take Over/Hostage-Styled Videos

Social media users are now falling victims to hackers who hijack and hold social media accounts of thousands of users to ransom around the globe, forcing them to stage hostage-styled videos, advertising fake get-rich-quick schemes.

The hacker, posing as your friend would send you a link, appearing like an Instagram login windows. After you click and fill all your login details, the scammer is now in possession of your username and password.

You could be asked to do a video promoting a fraudulent online scheme, offering fantastic returns without any risk or loss.

Having done the video clip, he would still not give you access back to your account, instead, the video would be advertised through an Instagram story.

The story could be more excruciating if you have thousands of followers on your Instagram page or if you operate a business account. Your friends and followers may be tempted to invest in the scam, not knowing you made the video under duress.

Responding on the development, Meta said:  “We encourage our community to pick strong and unique passwords, to never share them with anyone, and to turn on 2 Factor Authentication in their Settings to protect their account.

Signal Selling Scams

This is when a scammer claims to be an expert online trader who can be giving you the best information about the capital market, and professional forecast about future trade, if you subscribe to their signals.

The scams are associated with social trading where you can use information and ideas from experienced investors, and use them to form your own Investment decisions and strategies.

Also, social trading follows the principles of social media communications, as investors are mostly connected through social media platforms. Subscribing to fake signals means you pay money for signals that don’t work.

Fake Investment Gurus

“We decided to float this blog to enlighten you guys about the nitty-gritty of entrepreneurship and how to start a fantastic business. This guide will reveal to you hidden means on how you can easily make $500,000 monthly if you just buy my $500 course material”

The statement above may not be new to you on your social media platforms. The promoters of such social media scams are known as Fake investment Gurus.

They promise you outrageous results, with the condition that you pay for a course, skills, lecture books, training sessions etc.

They usually back up their dubious services by flaunting fake material possessions like posh cars, beautiful mansions, and false profit numbers, telling you how the same information has been working for them.

Online Romance Scams

Scammers posing as potential love seekers have now infiltrated genuine dating sites and social media platforms.

In order to easily get your attention and emotion, the scammer may use a fake profile, claiming to be a military officer, health worker or any professional who is a citizen of your country, but residing abroad.

As time goes, he would now begin to show you strong emotions that would take the relationship to a higher degree where two of you would be communicating via private means such as phone and Whatsapp.

Having gained your trust through months of ceaseless communications, the scammer would now introduce a fraudulent investment plan to you. Beclouded by your emotions, you could throw caution to the wind, and part with cash.

Gift Card Scams

Online gift cards are only used for gifts, and are not meant for mode of payments for goods or services. They can only be redeemed. However, Gift Card Scam occurs if someone calls you, mandating you to pay for a service or products through gift cards, just know that they are attempting to defraud you. If the scammer receives your card PIN or number, your money is gone.

One thing you should know is that the security mechanism of gift card is low, making it an attractive and popular way of duping people.

Be Careful

Ensure you take your time and be careful when dealing with strangers on your social media pages or while carrying out financial transactions.

If you need to confirm if an investment is legitimate, visit the SEC website but don’t take advice from public forums or online chatter. As an investor you should always think long term and not short term rewards.