“Your Guide to Spotting Scams” is a weekly blog series in which we analyze common cryptocurrency scams.
Basic conclusions
The Binance risk team has identified and compiled 12 of the most commonly used scams in the cryptocurrency space, including but not limited to romance scams, impersonation scams, and fake freebies.
Each week, we'll dive deeper into a different type of scam — including the methodology behind it — as well as provide users with general tips on how to spot and avoid scams.
The scam could be a message on Telegram from someone claiming to be a “Binance employee,” an urgent phone call from a relative you don’t know well who needs money, or a charming scammer pretending to be in love to get something expensive in return. Scams are very diverse, but they all have one goal: to steal your money.
A text message in which someone is persistently asking for money or a fake free gift of Bitcoin can be enough to manipulate users and gain their trust, especially those in a vulnerable moment.
This article is an introduction to a broader anti-fraud blog series that will review the most common cryptocurrency scams and best practices for avoiding them. We provide this information to provide our users with the latest security information and advice because, in the end, you play the biggest role in protecting your money.
Introduction to 12 types of scams
Below, our risk team has identified and grouped the most common cryptocurrency scams into 12 categories, along with a summary of how each works.
Each week, we'll take a deep dive into a different scam — including its methodology — and provide users with general tips on spotting and avoiding a scam. We will now look at the 12 categories.
2. Investment scams
Investment scams involve a scammer promising high returns if you invest your money through a “highly recommended” website, app, or cryptocurrency broker. The criminal may claim to be an expert who will multiply your money tenfold.
2. Recruitment scams
The job ad may seem real. The income is well above the average in the field. But the problem is that recruitment scammers will send a lucrative job listing that requires applicants to pay a deposit fee if they want the job.
3. Impersonating a person of authority
Impersonation scammers will try to gain your trust by pretending to be someone important, such as a police officer, government official, or employee from the tax office.
4. Impersonating Binance employees
Unfortunately, impersonating a Binance support employee is a common threat for crypto scammers. Fraudsters often try to manipulate users by exploiting the trust our company has built in this area over the years.
Please note that Binance employees will never contact you to request sensitive information, such as personal login data and two-factor authentication codes. So, if you receive a message from someone claiming to work for Binance and asking for sensitive information, block them and report to Binance Support immediately.
5. Romance scams
A romance scam involves someone showing romantic interest and trying to start a relationship with you online in hopes of stealing your money. These tricks can sometimes take years to develop; The scammer will start by asking for small advances before going on to claim your entire life's savings.
6. Fake freebies
Scammers will invite you to a group on Telegram or a Discord server to participate in a giveaway or free cryptocurrency giveaway. The scammer will usually ask for a deposit fee or try to trick you into revealing sensitive information in exchange for 'profits'.
7. Ponzi scheme
Ponzi schemes are a type of scam that pay early investors money and commissions collected from new investors. There is no real investment involved, but the scammer simply takes money from one investor to pay the other investor. People in a Ponzi scheme are encouraged to invite their friends and family to join.
8. Fake shopping sites
Fake shopping sites are designed to mimic legitimate e-commerce sites and allow users to register as merchants or customers. The fake site may tempt you to buy its goods at prices much lower than the average market price. But he will not be willing to provide delivery service or will send you worthless items instead of the goods listed on him.
9. Money transfer fraud
Money transfer fraud can occur in two different scenarios.
First, fraud occurs as an innocent person-to-person transaction. The scammer sends money to the victim who then transfers the equivalent amount of cryptocurrency to the scammer. If the matter had ended there, this would have been considered a normal P2P transaction. However, after receiving the cryptocurrencies, the fraudster will attempt to refund the amount paid or cancel the bank transfer.
In the other scenario, the scammer uses fake receipts to claim to have sent money to your bank account. You will then be asked to return the funds in digital currencies. Victims will believe the receipt is real and will withdraw cryptocurrencies to send to the scammer's address.
10. Acquaintance fraud
Not all scammers are strangers. The scammer could be a relative, a close friend, or an acquaintance who was introduced to you by a friend. Frauds can and often do occur in familiar circumstances.
11. Rug pulls
In the world of cryptocurrencies, a rug pull occurs when a cryptocurrency project team raises investor funds and then suddenly abandons the project and withdraws all of its liquidity. Rug pulling usually occurs when investor hype is at its peak.
12. Other
This category is for unique situations where fraud occurs, but the circumstances do not match any of the existing categories listed above.
Three living examples
Here are some examples of how a scammer could target you.
Example 1: Fake investment
The user, who we'll call Jack, begins messaging the scammer. Jack likely found the scammer on another social media site. The scammer advertises a highly profitable investment program that guarantees high returns.
Jack agrees to invest the money, but later discovers that the fraudster has stolen his money.
Example 2: Recruitment fraud
The scammer contacts the user, who we'll call Mike, to offer him a mysterious, well-paying job. The scammer promises that the company will pay Mike after completing a set of tasks. But there is no company, and the scammer will ask Mike to send a deposit fee within the mission requirements.
Example 3: Impersonating Binance support staff
The user, who we'll call Lily, joins a group on Telegram that includes fake “Binance employees” offering unique services with high returns. After making multiple deposits to the wallet addresses listed in the group, Lily does not hear back from them.
Conclusion
We hope that users can use this knowledge to make better decisions in their dealings with the cryptocurrency ecosystem. If you believe you are currently being targeted by a scammer — even if your suspicions are minimal — stop responding to them, stop any pending transfers, and notify Binance Support immediately. We will do our best to provide assistance based on the evidence and materials you provide.
Related articles
(Frequently Asked Questions) How to report scams on Binance Support
(Blog) How to spot and avoid common impersonation scams in the world of cryptocurrencies
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