How to Avoid Crypto Scams: Investor's Guide to Prevention

Cryptocurrency scams are a growing issue in the digital world. They trick people by taking advantage of blockchain’s complex nature. These scams lead to big losses and reduce trust in crypto. Let’s have a look at the recent Bybit hack and see how it happened.

The Bybit hack took place on February 21, 2025. Hackers stole about $1.5 billion in Ethereum tokens from the exchange’s cold wallet.

This was a social-engineering attack by the Lazarus Group, a North Korean hacking team. They didn’t break the system with code but tricked people instead. During a normal transfer from a cold wallet (offline storage) to a hot wallet (online storage), the hackers targeted Safe Wallet, a software Bybit used. They got into a developer’s computer and added bad code to the software. When Bybit’s CEO, Ben Zhou, signed off on the transfer, the fake code made it look real but sent the funds to the hackers’ wallet.

This could also affect regular users because social-engineering tricks, like fake emails or messages, can target anyone to steal their crypto. It shows why everyone must stay alert in the crypto world.

Source: Bybit

Types of Cryptocurrency Scams

Let’s look at different types of crypto scams and how they work.

Phishing/Social Engineering Scams

These scams trick people into giving away private info, like passwords or wallet keys. Scammers send fake emails, texts, or messages that look real. They might pretend to be a crypto exchange or a friend asking for help.

Look out for strange links, urgent requests, or messages from unknown sources. It might be a fake Coinbase email that tricks you into entering your password on a lookalike site via an urgent “verify your account” link.

Ponzi Schemes

A Ponzi scheme promises big profits but pays old investors with new investors’ money, not real earnings. They offer huge returns with no risk or push you to bring in more people. Scammers use fake success stories and pressure tactics to keep people investing. It could be a project, which promises 20% monthly returns, paying early investors with new sign-ups until the scammers vanish with the cash.

Pump and Dump/Rug Pull Scams

Scammers create a new coin or token, then trick people into buying it before disappearing with the cash. They spread hype on social media or chats to make the price go up fast. Watch for unknown teams, quick price jumps, or projects with no clear purpose.

AI-Enhanced Scams

These scams use smart tech to trick people in new ways. Scammers make fake videos of famous people saying they support a coin. Usually they do it via fake live streams on youtube with people like Elon Musk or Michael Saylor.

What to Do If You're Scammed

Getting scammed in cryptocurrency can happen to anyone. It’s important to know what to do if it happens to you. Acting fast and staying calm can help limit the damage. Below, we explain the steps to take if you’re scammed.

Immediate Steps

Stop talking to the scammer right away. Don’t send them any more messages or money. Write down everything you remember about the scam, like emails, texts, or wallet addresses. Take this info to the police and file a report. Tell any crypto exchanges involved about the scam so they can watch for the stolen funds. Contact groups like the FBI Internet Crime Complaint Center to report it too.

Legal Recourse

Talk to experts who help recover cryptocurrency. They might know ways to track your money. Be careful, though, many scammers pretend to be recovery experts and trick you again, cheating you twice. Understand that blockchain makes it hard to trace funds sometimes because it’s private. Look into legal options, like hiring a lawyer, but know it might not always work.

The best defense is staying ahead of the game, so we’re guiding you through the steps to dodge crypto scams.