Crypto scams

Scammers target crypto-assets as they are well-known, popular and not easily recovered.

What is a crypto scam?

Crypto scams are schemes that try to trick you into giving up money or crypto (digital assets). Scammers use social media, apps, messages and websites that look real. If you lose money in a crypto scam, it’s usually very hard to get it back.

How crypto scams work

Crypto-related scams can fall into these types:

1. Paying scammers with crypto
2. Investing in a fake trading platform, wallet or app
3. Scam tokens and investment schemes
4. Impersonation of a legitimate digital asset trading platform

1. Using crypto to pay scammers

Scammers might target your emotions to get you to send crypto quickly. For example:

• Exciting opportunities – An online romantic partner, job recruiter, or fake business asks for payment in crypto only, including buying crypto at a crypto ATM.
• Giveaway scams – Posts on social media offer to match or multiply crypto invested with them in a crypto giveaway scam.
• Blackmail/extortion – You're told by a scammer they have your internet browsing history, compromising photos or videos. They demand payment in crypto.
• Recovery – You are contacted by an individual claiming to be a government or law enforcement official who alleges to either have frozen crypto belonging to you or alternatively attempting to phish for account details. See ASIC's scam warning for an example of how this might work. There have also been examples of scammers impersonating police to trick victims into transferring their cryptocurrency.

2. Fake trading platforms, wallets or apps

Scammers build fake exchanges or wallet sites that look real. You’re invited to trade, but once you deposit crypto, they disappear with your funds. This can work in different ways:

• Phishing webpages – These capture the details you enter, so the scammer can log in later and steal your crypto. They may also send links via phishing emails or DMs.
• Fake platforms – You use their platform to trade, mine crypto or to earn extra rewards. Initially, your crypto goes up in value, so you invest more. But then they lock you out, close the site and disappear with your money.
• Fake trading apps - Scammers create fake crypto trading apps to steal your money. They may appear on legitimate online application platforms, but the giveaway is usually that they ask you to download the app from their website.

These platforms can then be marketed by finfluencers, who may not know that the product is a scam.

3. Fake tokens and investment schemes

Scammers create fake crypto tokens or offer ‘exclusive’ investments to lure you in.

• Scam tokens in crypto wallets – A mystery token appears in your crypto wallet, seemingly worth thousands. If you sell it, a 'smart contract' is activated. This transfers your legitimate crypto tokens and private keys to the scammer.
• Initial Coin Offering (ICO) and Crypto Launchpad 'rug pull' scams – Similar to a pump and dump scheme, in a rug pull crypto scam an ICO (or initial token offering, ITO) is hyped through marketing and social media, sometimes marketed as a token ‘pre-sale’. When the amount invested reaches a certain level, the scammer cashes out the coins and disappears. With the liquidity gone, the value plummets and your coins are worthless.
• Crypto ponzi scheme – You're promised large ‘returns’ by investing in crypto. But the promoter uses money from other investors to pay your ‘earnings’. For more on how these scams work, see ponzi schemes.

4. Digital asset trading platform impersonation

Scammers are impersonating legitimate digital currency exchanges to trick you to provide personal information and login details. Make sure you check the website address and do not click on any hyperlinks received via email or text message claiming to be from your exchange. You should never provide your password to someone else, and an exchange or platform will never ask you to share your password.

How to spot a crypto scam

Crypto can be sent overseas quickly with limited oversight. If you lose your money to a crypto scam, your money is likely gone.

Watch out for these potential red flags.

Unexpected contact

If someone you don't know contacts you with investment advice or offers – especially via phone, email, text or social media – stop and check it carefully.

Recommendations from someone familiar

You may hear about it through:

• an advertisement or fake celebrity endorsement on social media
• an online influencer
• an online romantic partner, or 
• family and friends who have unknowingly been scammed themselves

Pressure to act fast

If you are told to transfer crypto right away, download a sketchy app, or pay before seeing full details, that’s a big red flag.

Promises that sound too good to be true

Guaranteed high returns or free crypto are typical scam tactics. It’s important to remember that even with a genuine crypto investment, crypto is high-risk and volatile. The value can go up or down quickly and there are no guaranteed returns. 

To find out more about how scammers operate, see investment scams.

What to do before you invest in or send crypto

Scammers are skilled at convincing people to part with their money by overpromising and using flashy marketing.

Here are some ways to be alert to crypto scams:

• Always question social media ads influencers and celebrity endorsements promoting crypto.
• Read websites carefully. Verify listed addresses or phone numbers. Look for spelling mistakes. Read the whitepaper for new coins and search for information about people involved in the project.
• Beware of requests for payment in crypto. It’s unlikely that any legitimate financial services firm will ask you to pay exclusively in crypto. Be wary of any recruiter, online romantic partner, or online acquaintance who asks for a crypto payment.
• Be alert if someone offers ‘high returns’ for ‘low risk’ crypto investments. Be wary of a promise of large instant rewards if you sign up now, or large returns over a short period of time.
• If you're already investing in crypto:
• Use a private Wi-Fi network to connect to your crypto account or wallet. Scammers can intercept information sent over public Wi-Fi. If you plan to travel and use public Wi-Fi consider whether you need to access your account whilst away.
• Be careful before you interact with a token you didn't trade, if it suddenly appears in your wallet
• Be careful when installing browser add-ons or software that links your crypto holdings. There is legitimate software that performs this task, but there are also many scams that look legitimate.
• Be cautious when ‘signing’ a crypto transaction from your own digital wallet. If a signature request is not human readable (shows only numbers/digits or raw code) do not sign it.

Be alert and remember if something looks too good to be true, it probably is.

What to do if you've been scammed

If you think you've been targeted by scammers, act quickly. If you suspect a scam or have lost money to one: 

• Stop sending money.
• Contact your bank or crypto platform immediately — they may be able to help stop transactions.
• Report the scam to Scamwatch — reports help authorities stop scammers.
• Tell friends and family so they can protect themselves.

For more information, see what to do if you've been scammed.