How to recognize and prevent crypto scams?

In this article, we discuss various types of crypto scams and how to recognize them.

Unfortunately, we often hear stories of people being scammed, sometimes out of significant amounts of money. Many of these situations could be avoided with more knowledge on the subject. That’s why we’re writing this article. Hopefully, we can help prevent as many scams as possible.

Please share this page with others who are interested in crypto, especially if they are inexperienced. Even experienced crypto users can fall victim to scammers.

On this page, we explain which scams exist and how to recognize them using real examples.

Are we missing a scam that should be included? Let us know at shop@btcdirect.eu.

Crypto Golden Rules

We begin with the most important golden rules for those with limited time. Following these rules will already make you much safer. However, we also recommend reviewing the examples further down the page to become aware of all scams and how to identify them.

Keep Your Recovery Seed Phrase Safe: If you have a software or hardware wallet, never share your Recovery Seed (12 or 24 words) with anyone, even if they claim to want to help or represent an organization. Never enter your Recovery Seed on your mobile or computer. Don’t take a photo of it or write it in your phone’s notepad. Store your Recovery Seed offline on paper or, better yet, in a SOLIDHODL.
Be Vigilant in Online Communities: If you’re active in communities like Telegram, be alert. If you ask a question in a Telegram group for a specific coin, chances are someone with a name like “Admin” will contact you, pretending to help. Almost always, this person is trying to scam you.
Beware of Spam Messages: If you receive a message via WhatsApp or email from a crypto party, always check if the message is authentic before responding.
Too Good to Be True? If something sounds too good to be true, it probably is.
Stay Aware of Current Events: Scammers often exploit current events. For example, if there’s news about Trustwallet, scammers might pose as Trustwallet and send you emails. Or if Binance exits the Dutch market, they might concoct reasons why you need to click a link in their email. Always stay alert and verify the information.

By following these golden rules, you can avoid common scams and keep your crypto safe. Below, we provide examples of the following scams:

Pre-installed Hardware Wallets
Emails/Messages from Software or Hardware Wallet Providers
Emails/Messages from Crypto Exchanges
Investing through Non-existent "Exchanges"
WhatsApp/Telegram Groups or Messages
Ads on Platforms like YouTube
Ads via Google Search Results
Inducing Installation of Fake Apps
Fake Airdrops

1. Pre-installed Hardware Wallets

How hardware wallet manufacturers package their products may vary, but one thing is always the same: a hardware wallet is never pre-configured.

Watch out for the following:

Pre-configured Hardware Wallets: A hardware wallet is never pre-configured. If you receive a hardware wallet that is already set up, it’s a scam.
PIN Code: You always set the PIN code for your hardware wallet yourself. If you receive a hardware wallet with a pre-set PIN code, it’s a scam.
Recovery Seed Phrase (12/24 words): You receive the recovery seed phrase during the setup of the hardware wallet. It is generated by the hardware wallet and is unique to you. No one else should know these words. If you receive a hardware wallet with an included recovery seed phrase, it’s a scam.

How to prevent this? Check on the manufacturer’s website if the seller is an official reseller. Also, pay attention to the points mentioned above.

Below is an example of someone who bought a Ledger through a non-official reseller. The scammers put a lot of effort into this scam, as the product packaging looked brand new, and all the documentation was in Ledger’s style. What was wrong? The Ledger was pre-configured and included a piece of paper with a PIN code and recovery seed. By placing it under a scratch-off layer, the scammers made it seem secret, but of course, it wasn’t.

Additionally, there was an instruction booklet that made it seem normal that the recovery seed was pre-configured. This is never the case.

2. Emails/Messages from Software or Hardware Wallet Providers

A common scam involves emails that appear to come from well-known wallet providers like Trustwallet, Metamask, Ledger, or Trezor, but are not. The scammers' goal is always the same: to entice you to enter your Recovery Seed. They often do this by creating fear or making you think you need to act quickly to avoid negative consequences, such as claiming you need to verify your wallet as soon as possible for X or Y reason.

Below is an example of an email supposedly from "Ledger." Here are some points to recognize it’s not genuine:

The sending email address is not from Ledger.
The email’s formatting is sloppy and not quite right; the real Ledger logo is not used correctly.
The reason they give for clicking their link is baseless. For instance, a 'deprecated Ledger Live account' doesn’t exist.
The receiving email address (masked in the example) is not usually used for crypto matters.

Another example is an email from the software wallet Metamask. The sending email address immediately stands out as suspicious. Moreover, Metamask does not know your email address. The main thing to realize is that the content is complete nonsense. For example, they claim you need to perform a manual update due to a blockchain update for the new year… Such requests do not exist. Here you see two clear red flags: they try to scare you by threatening the loss of your crypto and want you to act quickly to prevent it.

3. Emails/Messages from Exchanges

Scammers often cleverly exploit current events, such as the bankruptcy of the exchange FTX at the end of 2022, where many people lost their funds. What do these scammers do? They send out mass emails pretending to be from FTX, encouraging customers to claim their funds. Below is an example.

Scammers cleverly use the name Kroll, which is actually handling FTX’s bankruptcy. However, Kroll’s email address is noticing@ra.kroll.com, not xxx@noticing.ra.kroll.com. Also, pay close attention to the links in these emails. They may appear to lead to claims.ftx.com, but if you hover over the link, you’ll see it leads to a completely different site. Stay alert!

Below is an example with Bitvavo. You are encouraged to click a link, but it’s not legitimate. If you hover over the link, you’ll see it leads to a different site. Also, note the sender address, which is often immediately suspicious.

Another example is Binance, suggesting that your account is blocked for some reason. This is not true. You can recognize this by the email address, the unprofessional text, and the link behind the ‘Secure My Account’ button, which is not from Binance itself.

4. Investing through Non-existent "Exchanges"

If someone promises to help you with investments and guarantees attractive returns, it’s often too good to be true. How do you recognize this? Often, you get access to a platform that looks real but isn’t. The values they show you are fake, intended only to persuade you to transfer crypto. You can usually recognize such a platform by its unprofessional layout. Search for the platform’s name on Google and the organization they claim to be affiliated with. Often, within 30 seconds, you’ll discover it’s a known scam.

5. WhatsApp Groups or Messages

The infamous Binance WhatsApp groups are a common scenario. You are suddenly added to a group with hundreds of others. Initially, you cannot send messages, but someone posing as a Binance employee starts promising prizes and rewards to create a crypto chat group. Critical voices are often removed immediately, while positive reactions are often placed by the same scammers under different accounts. They try to gain your trust with the ultimate goal of stealing your crypto.

Another example is when you suddenly receive a message with a username and password for logging in somewhere. You can actually log in, but the platform is not real. You are enticed to invest by promising large profits, but none of these profits are real. They simply manipulate figures to persuade you to invest more. The balance they communicate is also not real. If you want to move or withdraw money, they will first entice you to pay "transaction fees" or "taxes." This is all fraud, aimed solely at stealing as much money as possible from you. This type of scam can also occur via other messaging apps like Telegram.

6. Ads on Platforms like YouTube

If you are researching Bitcoin or crypto and watching YouTube videos, the algorithm may consider you as interested, which is not a problem in itself. However, sometimes scammers manage to temporarily place ads on channels like YouTube. They often use names like Elon Musk or Michael Saylor to lure you into sending Bitcoin or Ethereum to a specific address with the promise of getting double back.

Below is an example with Michael Saylor, where you are lured to scan a QR code for a supposed 'give-away' event. This is not real. Be warned.

And here is another example where Michael Saylor is used in a scam advertisement:

7. Ads via Google Search Results

Even Google search results are not always trustworthy. Suppose you search for "Trezor." The first result might not actually be from Trezor. You could end up on a site trying to lure you into entering your 24 words. If you do, you are guaranteed to lose your crypto.

Below is an example. The search was for "Ledger Nano X" and the first result is an advertisement site that is not from Ledger but appears at the top because it is an ad.

If you click on the site, you are directed to a fake Ledger site, as shown below. The exact layout may vary, but generally, they try to entice you to enter your 24 words by claiming there is an "error" during pairing and that you need to enter your 24 words to fix it. This is a scam.

8. Inducing Installation of Fake Apps

Although we don't have an example here, it is possible that scammers still offer fake versions of apps in the App Store or Google Play Store. If you want to download Metamask or Ledger Live, carefully search the store to ensure you are installing the authentic software.

9. Fake Airdrops

You may also receive emails about fake airdrops. While airdrops are real, it does not mean every airdrop is legitimate.

Take the airdrop below, for example. The sender’s email address was suspicious, and the email content was just an image, not text. But most importantly, this email claimed there was $62,000 worth to claim. Is this real? If something seems too good to be true, it often is!

These are some common scams. Are we missing a scam that should be covered? Let us know at shop@btcdirect.eu. We also welcome good examples if you have any.