The most common Blockchain scams and how they work

1. Pig Butchering Scams – The Emotional Investment Trap

Pig butchering scams are long-term manipulation schemes where scammers build relationships with victims over weeks or months, gaining their trust before persuading them to invest in fraudulent crypto platforms. The term comes from the analogy of “fattening up” the victim before financially “slaughtering” them.

An Australian woman fell victim to this scheme, losing her life savings of $780,000 after being deceived by an online romance scammer. The fraudster convinced her to invest in a fake crypto trading platform, promising massive returns. Once she transferred her funds, the scammer disappeared, leaving her devastated.

2. AI Deepfake Scams – Fake Celebrity Endorsements

AI-powered scams use deepfake technology to create realistic but fake videos of celebrities and influencers endorsing fraudulent crypto projects. These videos are designed to look and sound exactly like real promotional campaigns, making them incredibly convincing.

In early 2024, scammers created deepfake videos of Prince William and U.K. opposition leader Keir Starmer, making it seem like they were endorsing a crypto investment opportunity. The scam reached nearly 900,000 people across social media, and many unsuspecting victims sent money to the fraudulent platform, believing the endorsement was genuine.

3. Fake Airdrop & Giveaway Scams – The ‘Free Money’ Trap

Airdrops are common in the crypto space, often used to promote new tokens. However, scammers exploit this concept by setting up fake airdrop campaigns that require victims to connect their wallets. Once connected, scammers gain unauthorized access and drain the funds.

In 2024, a fake USDT airdrop led to millions of dollars in stolen funds. Victims received messages congratulating them on winning free tokens and were directed to connect their wallets to claim them. The moment they did, their accounts were emptied.

Read also:Crypto battles scam culture as scammers evolve with AI

4. Phishing Attacks – The Fake Login Trap

Phishing scams involve fraudsters creating fake websites or emails that mimic legitimate crypto platforms to steal users’ login credentials. These schemes are especially dangerous because they can be nearly indistinguishable from the real thing.

A large-scale phishing attack in 2024 targeted Binance users. Thousands of people received emails warning them about suspicious activity on their accounts, urging them to log in through a provided link. The fake Binance login page collected user credentials, allowing hackers to gain access and withdraw funds before victims realied what had happened.

5. Rug Pulls & Ponzi Schemes

A rug pull occurs when developers of a cryptocurrency project suddenly withdraw liquidity and disappear, leaving investors with worthless tokens. The phrase “rug pull” comes from the metaphor of pulling the rug out from under someone, meaning an unexpected and deceptive removal of support.

A notable rug pull happened on Coinbase’s Base network in 2024 with the BALD token. The anonymous developers cashed out over $25 million within days, leaving investors stranded with tokens that had no value. Influencers had heavily promoted the project, convincing people to invest just before the sudden collapse.

Ponzi schemes, on the other hand, operate by using funds from new investors to pay returns to earlier investors. This system eventually collapses when the influx of new investors slows, leaving the majority with nothing. In 2024 alone, more than $500 million was lost to memecoin rug pulls and Ponzi-style crypto scams, according to reports.

Impact on Global Crypto Investors

Crypto scams are not limited to Nigeria. The U.S. Federal Trade Commission (FTC) reported over $3.8 billion in crypto-related fraud losses in 2024 alone. Meanwhile, in Europe, deepfake scams led to millions in losses, prompting regulators to propose stricter controls on AI-generated content.

As crypto adoption rises, scammers continue to evolve, finding new ways to exploit investor enthusiasm and digital vulnerabilities.

Safety Measures

Verify before you invest. Research every project thoroughly.

Double-check wallet connections & URLs. Only use official links.

Never trust random investment offers. Scammers prey on urgency and emotions.

Enable security features. Use two (2) Factor Authentication (2FA) measures and store assets in secure wallets.

Report scams. Warn others and alert authorities if you are targeted.

The Future of Crypto Security

As cryptocurrency continues to reshape finance, so will the methods used by scammers. Staying informed is your best defense. Governments and regulators are stepping up, but your security starts with you. Educate yourself, think critically, and always question offers that sound too good to be true.