Main topics of the post:

  • Knowing how scams work is a great start for anyone who wants to stay safe in the world of cryptocurrencies and knowing how to keep your money safe is equally important.

  • This article is the first part of a mini-series exploring best practices for tackling cryptocurrency scammers.

  • Be wary of “investment experts” claiming to be “Binance employees,” online dating that seems too good to be true, and tiered investment schemes that promise income by inviting new people.

We recently compiled and summarized the most common cryptocurrency scams — including the most common tactics used — in a content-packed blog series called Get to Know the Scams. There you will find in-depth reviews of popular scams such as Ponzi schemes, fake job offers, and imposters claiming to be from Binance, just to name a few types of scams.

While it's helpful to know how different scams work, we want to shed more light on how you can avoid common fraud schemes.

Crypto scammers mainly target novice users who are unfamiliar with the industry and see the crypto market as an easy opportunity to make money. If you are new to the crypto space or unfamiliar with any form of investment, be careful with the following scenarios.

The investment specialist or “Binance employee”

Strangers on the internet or those claiming to be “Binance employees” who message you with unsolicited investment advice or offers to “double your money” are likely scammers. Furthermore, Binance employees will never send you messages on social media without you starting a conversation to talk about investments, give money or offer an exclusive service.

Three tips to avoid impostor scams

1. Understand realistic returns

If you want to assess the authenticity of an "investment expert", the easiest way to do so is to calculate the returns they offer. An annual return of 20%, which translates into a daily return of 0.0548%, is already considered very high among the investment community. Be wary of any “investment experts” promoting returns greater than 20%.

You should still be wary of anyone offering investment advice or promising to multiply your money. Even someone advertising a reasonable annual return, like 10%, could be a scammer trying to convince you to hand over your money.

2. Use Binance Verification

Our official database, Binance Verification, allows anyone to verify Binance domains, email addresses, phone numbers, WeChat IDs, Telegram IDs, and Twitter username. Don’t immediately trust anyone who says they work for or represent Binance. Always confirm the source on Binance Verification first.

Continue to exercise caution even if your query shows that the source is verified. Scammers often use real names of Binance employees to trick their victims.

3. Do a background check

Research the key information behind the “investment program”. Use tools like who.is to find out when the site was founded and how long it has been active. Check URLs on Scamadviser, a database that compiles and ranks websites based on their trustworthiness.

Always do your research before trusting a platform, person or entity with your money. At the very least, you should do a quick Google search for the website or project name. If you notice any red flags, block the contact and stop all communications. Generally, scammers tend to have scripts prepared to try to convince them of their legitimacy.

Website evaluation on Scamadviser

Sweeping achievement

If an online relationship quickly evolves from first contact to overwhelming passion, be wary. This is an online romance scam indicator.

Three tips for spotting a romance scam

Use image search apps like TinEye, Google (image search), or Baidu (image search) to check if the person is who they really say they are. Scammers have a habit of stealing photos from real people's social media profiles.

TinEye Home

2. Search the name for more information

Try searching the full name of the person you're chatting with on Google using keywords like "scammer," "romance scam," or "relationship scam." Ask for social media profiles; if you can't find any information about the person online, be careful — especially if money becomes a recurring topic.

3. Ask to see the person's face via video call

Your potential lover may be posing as someone else. Make a video call invitation to check if the person really is who they say they are, if the person continues to avoid the subject, you better be careful. Scammers will make up various lies to convince you that they cannot participate in a video call.

High returns with a tiered invitation system

Scams that offer high returns and upgraded VIP levels based on how many people you invite are considered high risk and are often signs of a scam. Typically, there is no stable business model behind these agreements. Your income depends on the number of new users you invite to deposit money.

Warning signs to identify a fake cryptocurrency investment scheme

1. Understand realistic returns

By traditional metrics, an annual return of 10 to 20% is already considered a very high return on investment. Fake “investment schemes” may try to lure you with offers of 1% profit per day. This equates to an annual return of 1230%, a highly unlikely number.

As we mentioned earlier, you should still be careful even if a project or scheme is advertising a more reasonable return.

2. Search wallet addresses

Use a block explorer such as Bitquery to query withdrawal address information. Look at the address balances at different times, when the addresses were created, how often withdrawals are made, and where the money is going.

These tools, although more advanced, are essential for any cryptocurrency user. Try using them the next time you encounter an unknown wallet address.

For a full tutorial, check out our Binance Academy guide: How to Use a Bitcoin Blockchain Explorer.

Bitquery 

To find out more details about a particular address, you will need to use a network-specific block explorer, such as:

  • TRONSCAN for the TRON (TRX) protocol

  • Etherscan para a rede Ethereum (ETH)

  • BscScan para a BNB Chain (BSC)

  • btc.com for the Bitcoin (BTC) network

Analysis feature in TRONSCAN

Final considerations:

To stay safe in the world of digital currencies, it is important to be wary of unsolicited investment advice, fast-moving online relationships, and tiered investment schemes with seemingly high returns.

By understanding how realistic investment returns work, consulting sources, conducting necessary background checks, and utilizing available tools for research and due diligence, users can protect themselves against the most common scams and keep their cryptocurrencies safe.

Further reading

  • Know the Scams: protect yourself from impostor scams claiming to be from Binance

  • Discover the Scams: fake investments in cryptocurrencies to keep an eye on

  • Know the Scams: alerts to identify an impostor scam

Risk Notice and Disclaimer: This content is presented to you “as is” for informational and educational purposes only, without warranty of any kind. The content should not be construed as financial advice and is not intended to recommend the purchase of any specific product or service. Digital asset prices can be volatile. The value of your investment may go down as well as up and you may not get back the amount invested. You are solely responsible for your investment decisions. Binance is not responsible for any of your possible losses. This material should not be construed as financial advice. For more information, see our Terms of Use and Risk Notice.