What are Crypto Investment Scams?


Like any other gold rush, the crypto explosion has brought several scammers to the industry. While the crypto market offers exciting opportunities for legitimate investments, it is important to be aware of the many crypto investment scams. These scams are designed to deceive users and make quick profits in the crypto space.

Introduction to Crypto Investment Scams 

Crypto investment scams involve fraudulent schemes that promise high returns on investments but end up defrauding people of their hard-earned money. Scammers take advantage of the decentralised and relatively unregulated nature of crypto assets to carry out their deceitful activities. It is crucial for investors to understand the different types of crypto investment scams. If you can identify the warning signs, you can easily protect yourself from falling victim to these scams.

Types of Crypto Investment Scams 

Ponzi Schemes 

Ponzi schemes are a common type of crypto investment scam. Scammers promise high returns to investors and use money from new investors to pay off older ones. As long as new investors keep joining, the scheme continues. However, when there aren’t enough new investors, the scheme collapses. This leaves investors with significant financial losses while the scammers vanish with the remaining funds.

Fake ICOs 

Scammers exploit Initial Coin Offerings (ICOs) to defraud investors. Some scammers may create fake ICOs to trick investors. They make enticing promises of high returns when the new crypto becomes successful. Unfortunately, these fake ICOs usually lack a genuine product and have no intention of fulfilling their promises. Investors who contribute funds to these scams ultimately lose their money when the scammers vanish.

Pump and Dump Schemes 

Pump-and-dump schemes manipulate crypto prices through deceptive tactics. Scammers spread false or exaggerated statements to create hype around a specific token to investors and drive up the price. Once the price reaches a certain point, the scammers sell their holdings and cause the price to plummet. As a result, other investors suffer significant losses while scammers profit from this manipulated market.

Malware and Phishing Scams 

Malware and phishing scams aim to steal personal information and digital wallets from individuals. Scammers employ tactics like malicious software and fake websites to acquire victims’ private keys or login credentials. With this sensitive information, scammers can directly steal funds from victims’ wallets or take control of their accounts, resulting in significant financial losses.

Read more: What is A Crypto Phishing Attack 

Social Engineering Scams 

Social engineering scams involve manipulating individuals into revealing sensitive information or transferring funds. Scammers may impersonate trusted individuals or organisations, using tactics such as fake customer support, investment advice, or airdrops. Through these deceptive methods, scammers trick people into providing their private keys or making direct transfers to fraudulent accounts, resulting in financial losses.

Read more: Crypto Scams on Social Media

Crypto Investment Scam Examples 


Bitconnect was a crypto lending and exchange platform that operated as a Ponzi scheme. It promised investors high daily returns through a lending program and referral system. However, the project collapsed in 2018 when authorities exposed its fraudulent activities. Investors lost substantial amounts of money, and the founders faced legal consequences.


OneCoin claimed to be a legitimate crypto but was later revealed to be a massive scam. The project’s operators used aggressive marketing tactics and false information to attract investors worldwide. Despite the lack of a public blockchain or any verifiable evidence, OneCoin managed to defraud investors of billions of dollars before its downfall. The founder of OneCoin was arrested and is currently facing legal proceedings.

Centra Tech 

Centra Tech presented itself as a company developing a crypto debit card, but it turned out to be a fraudulent scheme. The project raised funds through an ICO and enlisted celebrity endorsements to gain credibility. However, it was later discovered that the team behind Centra Tech had fabricated partnerships and misled investors. The founders were arrested and charged with securities and wire fraud.


PlexCoin was an ICO that promised extraordinary returns to investors. The project claimed to develop a decentralised worldwide crypto and falsely boasted partnerships with major companies. However, the U.S. Securities and Exchange Commission (SEC) intervened and halted the ICO, charging the project’s founder with securities fraud. Investors who had already contributed funds were able to receive refunds.


PlusToken was a massive Ponzi scheme that operated as a mobile crypto wallet. It promised users high returns on their investments and attracted millions of participants, mostly from Asia. However, in 2019, the project’s operators disappeared with an estimated $2 billion worth of crypto assets, leaving investors empty-handed. Several key members of the scheme were subsequently arrested and faced legal consequences.

Crypto Investment Fraud 

Investing in crypto scams not only results in financial losses but also has legal consequences. Crypto criminals can face charges such as fraud, securities violations, money laundering, and in some cases, imprisonment. 

Regulatory bodies also play a crucial role in preventing crypto investment scams. They establish guidelines, regulations, and licensing requirements for crypto-related businesses, including exchanges, wallets, and ICOs. 

Crypto Investment Scam Warning Signs 

Crypto Investment Scam Warning Signs

To avoid falling victim to crypto investment scams, it is essential to be aware of the warning signs. Here are some common red flags to watch out for:

  • High returns with little or no risk: Scammers often promise unrealistic returns without any explanation of how they will be achieved. If an investment opportunity sounds too good to be true, it probably is.
  • Unregulated or unknown entities: Be cautious when dealing with projects or individuals that lack proper regulation or have no established reputation. Legitimate projects are transparent about their team members, partnerships, and regulatory compliance.
  • Pressure to invest quickly: Scammers create a sense of urgency to make investors act without sufficient time for due diligence. They use tactics like limited-time offers or exclusive opportunities to push individuals into hasty decisions.
  • Lack of transparency: Genuine projects provide detailed information about their technology, roadmap, and future plans. If a project lacks transparency or fails to provide adequate documentation, it may be a warning sign of a scam.
  • Unsolicited investment opportunities: Be wary of unsolicited messages, emails, or phone calls promoting investment opportunities. Legitimate projects typically do not approach investors in this manner.

How to Avoid Crypto Investment Scams ?

Protecting oneself from crypto investment scams requires diligence and caution. Here are some measures to reduce the risk of falling victim to scams:

  • Research the project and the team: Thoroughly investigate the background and experience of the project’s team members. Look for credible information and verify their credentials.
  • Verify the authenticity of the project’s claims: Scrutinize the project’s whitepaper, website, and social media channels. Check for realistic goals, technical details, and evidence of progress.
  • Check the project’s community and social media channels: Engage with the community to assess their experiences and opinions. Look for active discussions, transparency, and responsiveness from the project’s team.
  • Only invest what you can afford to lose: Invest an amount that you are comfortable with and can afford to lose entirely. Avoid putting your entire savings or significant funds into high-risk investments.
  • Use trusted and regulated exchanges and wallets: Choose reputable crypto exchanges and wallets that have a proven track record of security and reliability. Research their security measures and user reviews before trusting them with your funds.

Read more: Guide On Protecting Your Crypto Investments


Crypto investment scams pose a significant threat to unsuspecting investors seeking opportunities in the crypto market. Understanding the types of scams and their warning signs is crucial to protect oneself from financial losses. Conducting thorough research, verifying project claims, and using trusted platforms are essential steps to avoid falling victim to scams. By exercising due diligence and staying informed, investors can navigate the crypto space more safely and make informed investment decisions.

You can read more about Crypto, Blockchain and Web 3.0 on ZebPay Blogs. Click on the button below and join the millions trading on ZebPay Singapore.

FAQs on Crypto Investment Scams

How do Crypto investment Scams Work?

Crypto scams typically involve deceptive tactics to trick individuals into investing in fraudulent cryptos or engaging in dubious activities related to digital assets. Scammers may create fake websites or apps that resemble legitimate crypto platforms, promising high returns or exclusive investment opportunities.

What are the Major Crypto Scams?

Scams in the crypto world could be Ponzi schemes, Social media scams, Fake Initial Coin Offerings, and Pump and Dump schemes to name a few.

Can Crypto Scams be Traced?

Tracing crypto scams can be challenging but is not impossible. Tracing can be done by Blockchain Analysis, IP address tracking, Crypto exchange cooperation, and Law enforcement collaboration.

Who is the Most Wanted Crypto Scammer?

While it is difficult to pinpoint to a single person as the “most wanted”, there are infamous examples such as Bitconnect and Onecoin which led to a large wealth erosion because of unfair practices.

Disclaimer: Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Each investor must do his/her own research or seek independent advice if necessary before initiating any transactions in crypto products and NFTs. The views, thoughts, and opinions expressed in the article belong solely to the author, and not to ZebPay or the author’s employer or other groups or individuals. ZebPay shall not be held liable for any acts or omissions, or losses incurred by the investors. ZebPay has not received any compensation in cash or kind for the above article and the article is provided “as is”, with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information.

Start Trading Now