Amazing Scam Cases and Fraud of Cryptocurrency Tradings in 2024

January 27, 2025

cases, crypto, cryptocurrency, frauds, scams, security

No one can deny the fact that crypto coins are now streaky and hot, some are thinking of it as gold and other forms of life savings to hold over a long time, although many may consider the cryptocurrency as “currency” of daily use and spend it in supermarkets(little satoshis maybe). All these reasons make me think of potential scam cases of cryptocurrency that can be conducted on holders of crypto coins and how to secure crypto wallets by all means to preserve the life savings we killed ourselves to accumulate. This can be a little costly so be prepared to see some $$ along the way.

What can be a possible scam cases of cryptocurrency?

The cryptocurrency world is rife with scams, you must be aware and very careful when you enter in a transaction since scam cases of cryptocurrency is becoming a surge these days, and here are some common examples of such cases of scam in cryptocurrency:

Fake ICOs (Initial Coin Offerings): Scammers create fake cryptocurrencies and promise huge returns to early investors. These coins often have no real value or underlying technology, and the scammers disappear with the funds.
Phishing Scams: These scams attempt to trick users into revealing their private keys or other sensitive information. They often involve fake websites, emails, or messages that mimic legitimate platforms.
Pump and Dump Schemes: Scammers artificially inflate the price of a cryptocurrency by spreading false or misleading information. Once the price has risen, they quickly sell their holdings, causing the price to crash and leaving other investors with losses.
Ponzi Schemes: These schemes promise high returns to early investors by using the funds from new investors to pay off earlier ones. They are unsustainable and eventually collapse, leaving many investors with significant losses.
Fake Celebrity Endorsements: Scammers often use the names and images of celebrities to promote fake cryptocurrencies or investment opportunities.

It’s important to be extremely cautious when investing in cryptocurrencies. Do your research, be wary of unrealistic promises, and never share your private keys with anyone.

Biggest Crimes that upsetted crypto world in 2024

2024 was a year marked by significant scam cases of cryptocurrency, with several high-profile cases making headlines. Here are some of the most notable ones:

WazirX Hack:

In July 2024, Indian cryptocurrency exchange WazirX suffered a major breach, resulting in the theft of over $230 million from a multi-signature wallet. The incident highlighted the vulnerabilities of centralized exchanges and the importance of robust security measures.

DMM Bitcoin Hack:

Another significant breach occurred in May 2024 at DMM Bitcoin, a Japanese cryptocurrency exchange. Hackers exploited a vulnerability, leading to a loss of approximately $305 million. This incident underscored the ongoing challenges faced by cryptocurrency exchanges in safeguarding user funds.

Rise of Investment Scams:

Throughout 2024, investment scams involving cryptocurrency continued to proliferate. The Federal Trade Commission (FTC) reported that Americans lost nearly $3.9 billion to investment scams in the first three quarters of the year, with cryptocurrency being a prominent payment method. These scams often involve fraudulent ICOs, Ponzi schemes, and fake celebrity endorsements.

Phishing Attacks:

Phishing attacks remained a persistent threat, with scammers employing increasingly sophisticated techniques to trick users into revealing their private keys or other sensitive information. Fake websites, emails, and messages mimicking legitimate platforms were commonly used to lure unsuspecting victims.

Rug Pulls:

Decentralized finance (DeFi) projects continued to be vulnerable to rug pulls, where developers abruptly abandoned projects, leaving investors with worthless tokens. These scams often involve artificially inflating the price of a token before disappearing with the funds. 2024 saw a number of cryptocurrency rug pulls, where developers abandon projects and take investors’ funds.¹ Some notable examples include: SHARPEI: This memecoin, featuring celebrity endorsements, surged to a $54 million market cap before developers sold their tokens and vanished, leaving investors with a 96% loss.²Numerous DeFi Projects: Many decentralized finance (DeFi) projects, particularly on the Binance Smart Chain (BSC), experienced rug pulls.³ Developers would create tokens, inflate their value, and then drain liquidity pools or restrict selling, leaving investors with worthless assets.⁴zkSync Rug Pull: A significant rug pull occurred on the zkSync network, with developers absconding with $36.95 million.

These incidents highlight the risks associated with investing in cryptocurrencies, especially in new and less established projects. It’s crucial to conduct thorough research, be wary of unrealistic promises, and prioritize security to minimize the risk of falling victim to rug pulls.

How to avoid scam cases of cryptocurrency?

To secure your cryptocurrency trading and wallets from scam cases of cryptocurrency, consider these key precautions:

Strong Security Practices: Robust Passwords: Utilize unique, complex passwords for each exchange and wallet. Avoid easily guessable information. Two-Factor Authentication (2FA): Enable 2FA for added security. This typically involves a code sent to your phone or generated by an authenticator app. Secure Wallets: Store your cryptocurrency in secure, offline wallets (hardware wallets) whenever possible. These devices keep your private keys offline, minimizing the risk of hacking.
Thorough Research and Due Diligence: Scrutinize Projects: Before investing, thoroughly research the project’s team, technology, roadmap, and whitepaper. Be wary of unrealistic promises or a lack of transparency. Verify Information: Cross-reference information from multiple sources to ensure accuracy and avoid falling for misleading claims. Be Skeptical of Unrealistic Promises: Avoid investments with guaranteed returns or extremely high returns with minimal risk.
Reputable Platforms and Exchanges: Choose Well-Known Exchanges: Stick to reputable, regulated cryptocurrency exchanges with a proven track record. Avoid Unfamiliar Platforms: Be cautious of new or lesser-known platforms, as they may be more vulnerable to hacks or scams.
Education and Awareness: Understand Crypto Fundamentals: Learn about blockchain technology, cryptocurrency basics, and common scam tactics. Stay Informed: Keep up-to-date on the latest news and developments in the cryptocurrency world to identify potential scams.
Never Share Your Private Keys: Protect Your Keys: Your private keys are like your bank account passwords. Never share them with anyone, under any circumstances.

How to further secure your life savings?

Additional Tips to save your life savings from scams, no too much security in this matter:

Diversify Your Portfolio: Don’t put all your eggs in one basket. Spread your investments across different cryptocurrencies¹ to mitigate risk.
Be Patient and Avoid Impulse Decisions: Cryptocurrency markets can be volatile. Avoid impulsive decisions and focus on long-term investments.
Report Suspicious Activity: If you encounter a potential scam, report it to the relevant authorities and the cryptocurrency exchange or platform involved.

By following these precautions, you can significantly enhance the security of your cryptocurrency trading and wallets, reducing the risk of falling victim to scams and protecting your investments.

Crypto fraud scenarios and how it differ from scams

Yes, in the context of cryptocurrency, there is a subtle but important difference between scam cases of cryptocurrency and fraud cases:

Scam: involves tricking someone into willingly giving up their cryptocurrency or information. This often relies on deception, manipulation, or exploiting trust.Example: A phishing email that appears to be from a legitimate exchange, asking you to click a link and enter your login credentials.
Fraud: involves illegal or dishonest activities, often with the intent to deceive for personal gain.² It often involves unauthorized access or misuse of information. Example: Hacking into a cryptocurrency exchange and stealing user funds.

Key Differences:

Consent: In a scam, the victim willingly provides information or sends cryptocurrency, albeit through deception.⁴ In fraud, the victim’s consent is not obtained.
Legality: Both are illegal, but fraud often carries more severe legal penalties due to the unauthorized nature of the actions.

Overlap: Sometimes the two can overlap, The lines between scam and fraud can sometimes be blurred. For example, a phishing scam can lead to fraud if the scammer successfully gains access to the victim’s account.

In essence: scam cases of cryptocurrency trick you into giving up something. Fraud involves taking something from you without your knowledge or consent.

Disclaimer: This information is for general knowledge and informational purposes only, and does not constitute legal or financial advice.

Conclusion

After you review all points discussed here about some scam cases of cryptocurrency and differences between a scam and a fraud, you can surely move safely in your future trades with confidence and strong steps. But also do further research everyday, as scams and frauds are always evolving and keep coming in so many new forms.