Cryptocurrency Scams And How to Avoid Them

Bitcoin and other cryptocurrencies’ unprecedented rise attracted a lot of attention including those of cybercriminals who perpetrate cryptocurrency scams. As the public becomes more involved in digital cryptocurrencies, the risk of scams will continue to increase.

The unregulated and private nature of various cryptocurrencies makes them a magnet for various fraudulent schemes and scams.

Whether through investment scams or impersonations there are various ways fraudsters trick victims into parting with cryptocurrency.

In this article, we will discuss various cryptocurrency scams and explore ways to avoid them.

1. Ponzi Scheme

Promoters of Ponzi schemes promise a consistent and high return on investment to lure in unsuspecting victims. This fraudulent scheme which is common with traditional investment has been successfully adapted to the crypto space.

While pretending to be a legitimate investment, scammers use crypto deposits from new investors to settle older investors’ profit. The scheme continues until new investments dry up and it becomes unsustainable. The scheme collapses, trapping investors’ money.

Cybercriminals often use fake testimonials and endorsements to promote such schemes.

2. Fake Giveaways

 

Fraudsters have devised means to convince victims to send them cryptocurrency by promising higher rewards. For example, victims have been asked to show loyalty to a public figure or company by donating bitcoins.

 

In return, they are promised a higher reward which never comes.

The scheme involves impersonating celebrities or organizations and deceiving their followers into parting with crypto.

3. Phishing Email Scams

Phishing for cryptos is also a popular scam. Hackers send messages from what appear to be legitimate companies.

They may ask targets to invest in new crypto portfolios or steal their crypto platform credentials by including links to fake websites controlled by the attackers.

Some scammers also set up a fake ICO and announce it via mass mailing to get as many victims as they can.

4. Pump-and-Dump Scams

In this scheme, a group of scammers gets together to buy a particular cryptocurrency in order to drive up his price.

The crypto price’s upward trend will deceive unsuspecting victims into thinking that there is a valid market move behind the rise. The crypto price will be further inflated when the public starts buying it.

When the promoters of the scheme hit their investment target, they will dump all their portfolio which will crash the crypto price and lead to panic selling by duped investors. Social media hashtags may be used to enhance this fraud.

The scammers can then move to another cryptocurrency to repeat the same pump and dump scheme. This fraud is difficult to detect even for seasoned investors.

5. Old Scams

Scammers can send emails or call victims to inform them that they owe the IRS a certain tax amount that must be paid immediately to avoid legal penalties.

In this case, the fraudsters ask for payment in crypto instead of giving out their bank account or requesting a wire transfer that can be easily traced.

Many victims only get to know that they have been defrauded after transferring crypto to the scammers.

6. Fake or Cloned Apps

Mobile apps are popular names for many people to be introduced to cryptocurrency investments and access their online wallets. Hackers take advantage of this to divert victim’s crypto funds.

Scammers convince victims to install fake crypto apps or clones of popular ones. They do this by promising freebies and rewards for using such apps. However, installing such apps can be used to compromise the target device and steal cryptos.

It may also be used to convince a target to deposit crypto for investment which is then stolen by the malicious app developer.

This scam is made easier by the proliferation of unvetted third-party app stores for Android devices.

How to stay safe from Crypto Scams

  1. Be skeptical of every crypto investment, especially those with unrealistic promises. Scrutinize all crypto offers and confirm that they are from legitimate sources before participating.
  2. Educate your employees on the dangers and risks associated with cryptocurrency and the various crypto scams that might be directed against your organization so they can be on the lookout for fraud attempts.
  3. Avoid visiting questionable sites and set up security policies to block potentially malicious websites on your company’s systems.
  4. Never click on any link that is asking for your password or wallet details whether through emails or SMS.
  5. Do not follow anonymous crypto investment tips.

Volatility risks are not the only issue you have to worry about in cryptocurrency. Even if you are not an investor, there are various ways you could lose money to scammers via cryptos. Educate your employees about crypto scams so your organization can stay safe. Contact us today for more information about cyber security.

June 17, 2025
Meeting IT security compliance standards is crucial for businesses that handle sensitive data, particularly in industries such as healthcare, finance, defense, and e-commerce. Regulatory frameworks such as HIPAA, CMMC, PCI-DSS, and GDPR exist to help ensure businesses protect customer information and maintain robust cybersecurity practices. Unfortunately, many organizations fall short of these requirements, often due to common, avoidable mistakes. These gaps can result in costly fines, data breaches, and reputational damage, which can significantly impact the business's bottom line and customer trust. 1. Failing to Conduct Regular Risk Assessments The Pitfall: Many businesses overlook the importance of conducting routine risk assessments. Without these, it’s challenging to identify vulnerabilities or evaluate whether your current cybersecurity controls meet compliance standards. How to Avoid It: Implement a regular risk assessment schedule. Work with a qualified IT provider to evaluate your systems, identify weaknesses, and document remediation plans. These assessments should be performed at least annually, or whenever significant changes to the system occur. 2. Inadequate Employee Training The Pitfall: Your employees are your first line of defense—and often your most significant vulnerability. A common compliance issue arises when businesses fail to train staff on cybersecurity best practices or on handling sensitive data appropriately. How to Avoid It: Invest in ongoing cybersecurity awareness training. Ensure employees understand how to recognize phishing emails, create strong passwords, and report any suspicious activity. Training should be updated regularly to reflect current threats and compliance requirements. 3. Improper Data Handling and Storage The Pitfall: Storing sensitive data in unsecured locations, failing to encrypt information, or retaining data longer than necessary are significant compliance risks. These practices are often flagged during audits. How to Avoid It: Adopt data classification policies that define how different types of data should be handled; encrypt sensitive data both at rest and in transit. Establish clear data retention policies and ensure that obsolete data is disposed of securely. 4. Lack of Incident Response Planning The Pitfall: When a security incident occurs, time is of the essence. Many businesses lack a documented incident response plan, or their existing plan hasn’t been thoroughly tested. This can lead to delayed responses, increased damage, and regulatory penalties. How to Avoid It: Develop a formal incident response plan that includes roles, responsibilities, communication protocols, and steps for containment and recovery. Run simulated breach scenarios with your IT team to ensure everyone knows how to respond effectively. 5. Using Outdated Software or Systems The Pitfall: Running outdated operating systems, software, or firmware is a common issue that can lead to compliance failures. Unsupported technologies are more vulnerable to exploitation. How to Avoid It: Keep all systems and applications up to date with the latest patches. Use automated tools to track software versions and receive alerts about end-of-life technologies. Schedule regular maintenance windows to apply updates and upgrades. 6. Insufficient Access Controls The Pitfall: Allowing too many employees access to sensitive data—or failing to revoke access when it’s no longer needed—can lead to data breaches and non-compliance. How to Avoid It: Implement role-based access controls and follow the principle of least privilege. This principle means that each user should have the minimum level of access necessary to perform their job. Regularly audit user accounts and permissions to ensure access is current and appropriate. Use multi-factor authentication (MFA) to add an additional layer of protection. 7. Neglecting Third-Party Vendor Risks The Pitfall: Businesses often overlook the fact that their compliance responsibilities extend to third-party vendors. If a vendor mishandles your data, you could still be held accountable. How to Avoid It: Vet third-party vendors carefully. Ensure they meet the same compliance standards as your business and include security requirements in your contracts. Conduct periodic audits or request compliance certifications from your vendors. 8. Failing to Document Policies and Procedures The Pitfall: Even if your security practices are strong, failing to document your compliance policies can result in audit failures. Regulators want to see evidence that you have formal processes in place. How to Avoid It: Create and maintain clear documentation for all compliance-related policies, including data protection, access control, incident response, and employee training. Make these documents easily accessible for audits and regularly review them to ensure updates are current. Conclusion Compliance with IT security standards is not a one-time project—it requires ongoing attention, regular updates, and a proactive approach to maintain effectiveness. By understanding and addressing these common pitfalls, your business can stay ahead of regulatory requirements, strengthen its security posture, and reduce the risk of costly incidents. This ongoing attention is crucial to maintaining your business's security and audit readiness. If you’re unsure whether your business is meeting current IT compliance standards, professional support can help. Contact SDTEK today to schedule a compliance assessment and learn how our IT services can keep your business secure and audit-ready. With our support, you can navigate the complex landscape of IT security compliance with confidence.
April 9, 2025
In today’s digital-first world, cybersecurity isn’t just a luxury—it’s a necessity. Whether you run a small startup or a growing enterprise in Fort Wayne , protecting your business’s data, systems, and clients is essential for long-term success. From ransomware attacks to phishing scams, cyber threats are evolving every day, and the best way to stay ahead of them is by partnering with a reliable IT services provider that understands the unique needs of local businesses. Here’s why investing in professional business IT support is one of the smartest decisions Fort Wayne businesses can make—and how working with SDTEK helps protect your operations, your data, and your reputation.