Sometimes it’s obvious that a scheme is a scam. In other cases, it’s a grey area. For example, are copycat coins, pyramid schemes, and vaporware coins necessarily scams? In crypto, there is a spectrum from obviously legitimate to obviously scam schemes, with the exact divide being a gray area.
With that in mind, here are the most common categories of crypto scams I’ve come across:
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Fake investment platform/honeypot: a fake trading service that takes your money with the promise of high returns from “trading.” However, it’s impossible to withdraw your “profits.”
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Phishing: a service that collects your logins and/or personal information, then uses that to steal your money
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Advance-fee scam: a platform promises to return a multiple of whatever you invested, but disappears
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Celebrity impersonation: a variety of advance-fee scam where the scammer pretends to be a celebrity
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Rug pull: a DeFi scam where a coin is released, and promoted, then all the value is stolen from the liquidity pool
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Exit scam: a project sells a coin in an ICO, but instead of using the funds to build a project, the promoters take the money and disappear
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Ponzi scheme: project promises high returns, then pays investors with funds from new deposits
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Crypto wallet “validation“: a type of phishing attack that impersonates a real wallet and asks for your seed words.
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Counterfeit coin: a Defi scam where promoters sell a fake and worthless copy of a real coin.
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Wallet dusting: scammers airdrop a token with a URL in the name of your wallet. When you visit the URL, it tries to steal your money
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Giveaway scam/fake airdrop: to claim “free” coins you must turn over credentials that allow scammers to steal your coins.
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Scam coins: A catch-all category for projects that don’t have a legitimate business model and whose promoters simply try to collect as much money as possible without delivering anything of value.
Note: these categories aren’t mutually exclusive.
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