Cryptocurrency continues to revolutionize the financial landscape, but alongside its remarkable growth, the sophistication and frequency of scams and cyberattacks have escalated dramatically. For newcomers to the crypto space—especially those without technical backgrounds—understanding these evolving risks is essential for safeguarding investments. This guide explains the most common crypto scams in simple terms, breaks down a major crypto theft (the Bybit hack), and shares everyday tips to keep your digital money safe, even if you’re completely new to this world.
Understanding Crypto Scams
Cryptocurrency is like digital cash that can be sent directly between people without using a bank. As more people buy crypto, scammers have become more creative in their attempts to steal it.
Think of the crypto world as a new neighborhood that’s getting popular. While most residents are honest, some thieves have moved in too. And just like thieves develop new ways to break into houses, crypto scammers constantly develop new tricks to steal digital money.
According to experts tracking these digital crimes, scammers are getting better at disguising themselves and their traps, making it harder to spot them before it’s too late.
Common Crypto Scams Explained
1. Fake Messages and Websites (Phishing)
Real-world comparison: This is like someone calling you pretending to be your bank, saying there’s a problem with your account, and asking for your password.
How it works in crypto: Scammers send emails or messages that look like they’re from trusted crypto companies like Coinbase. They might say there’s a problem with your account and direct you to a fake website that looks real but is designed to steal your login information.
Warning sign: You receive an unexpected email about a “problem” that requires “immediate action.”
New trick in 2025: Scammers now use AI technology to create fake videos of famous people appearing to endorse crypto scams. These videos look and sound surprisingly real.
- Elon Musk Deepfakes: Scammers frequently use deepfake videos of Elon Musk to promote fake cryptocurrency giveaways or investment schemes. These videos mimic Musk’s appearance, voice, and mannerisms, making them appear authentic. For instance, some deepfakes falsely claimed Musk would double any cryptocurrency sent to a specific wallet. Victims have reported significant financial losses due to these scams.
- MrBeast and BBC Personalities: A deepfake video featuring popular YouTuber MrBeast falsely advertised giveaways, such as offering iPhones for a small payment. Similarly, BBC presenters were deepfaked in videos promoting investment opportunities supposedly endorsed by Elon Musk. These scams were shared on platforms like TikTok and Facebook before being removed.
- Political Figures in New Zealand: Scammers created deepfake videos of New Zealand Prime Minister Christopher Luxon to spread false claims about pension cancellations, luring viewers into clicking on links that led to fraudulent investment schemes
2. Fake Investment Platforms
Real-world comparison: This is like a fake investment advisor setting up an office, taking people’s money for “investments,” and then disappearing overnight.
How it works in crypto: Scammers create professional-looking websites or apps that promise to invest your crypto with amazing returns. Once you deposit your money, they simply take it and shut down the website.
Real example: In 2024, a fake investment platform called “Quantum AI” promised incredible returns using fancy-sounding “quantum computing” technology. After collecting money from many investors over several months, the anonymous creators suddenly disappeared with all the funds. (Deeper dive: https://www.locknetmanagedit.com/blog/cybersecurity/quantum-ai-scams )
Warning sign: Promises of guaranteed profits or returns that seem too good to be true.
3. Social Media Scams
Real-world comparison: This is like a stranger becoming your friend over time, gaining your trust, and then asking to borrow money for an “emergency.”
How it works in crypto: Scammers use platforms like Facebook, Telegram, and TikTok to find victims. They might:
- Pretend to share “exclusive” investment opportunities
- Create fake giveaways (“Send us 1 Bitcoin, we’ll send you 2 back!”)
- Develop romantic relationships online before introducing investment “opportunities” (called “pig butchering” scams)
Warning sign: Someone you’ve never met in person recommends a “special” investment opportunity or asks you to send them cryptocurrency.
4. Technical Tricks
Real-world comparison: This is like someone tampering with an ATM to steal your card information or changing a store’s payment QR code to direct money to their account.
How it works in crypto:
- Fake QR codes: Replacing legitimate payment codes with ones that send money to the scammer
- Clipboard hijacking: Malware that watches what you copy and paste, replacing crypto addresses with the scammer’s address
- Fake apps: Counterfeit wallet apps that steal your crypto when you try to use them
Warning sign: A website or app asking for your crypto “seed phrase” (which is like the master password to your crypto – legitimate services never ask for this).
5. Pyramid and Ponzi Schemes
Real-world comparison: This is like a business that doesn’t sell real products but just uses new member payments to pay earlier members until it eventually collapses.
How it works in crypto: Scammers create crypto projects that promise regular returns, but they’re actually just using new investor money to pay earlier investors. These schemes eventually collapse when they can’t attract enough new investors.
Real-life example: Many crypto “mining pools” or “staking programs” that promise fixed daily returns regardless of market conditions are actually Ponzi schemes.
Warning sign: Consistent high returns regardless of what the overall crypto market is doing, and heavy emphasis on recruiting others to join.
The Psychology Behind Crypto Scams
Scammers don’t just rely on technical tricks—they’re masters at exploiting human psychology. Understanding these psychological tactics can help protect you even when you’re having a vulnerable day (and we all have them). These manipulative techniques are designed to bypass rational thinking and trigger emotional responses that lead to hasty decisions. Here’s how they work:
Fear and urgency: Scammers create artificial time pressure to bypass your rational thinking process, forcing quick decisions before you can analyze properly.
Authority exploitation: We’re naturally inclined to trust authority figures and expertise, which is why scammers impersonate trusted companies or use technical jargon.
Social proof manipulation: Fake testimonials and community activity exploit our tendency to trust what others appear to be doing successfully.
Reciprocity triggers: Free giveaways or small initial returns create a psychological obligation to reciprocate, making you more likely to invest larger amounts later.
Cognitive overload: Complex technical explanations overwhelm your critical thinking, causing you to defer to the “expert” rather than question details.
FOMO (Fear of Missing Out): Creating the illusion that others are getting rich while you’re being left behind triggers powerful emotional responses that override caution.
Remember, everyone has vulnerable moments. These psychological tactics are specifically designed to work even on intelligent, cautious people when they’re stressed, distracted, or emotionally vulnerable.
The Bybit Hack: A Digital Bank Robbery
The Bybit hack of February 2025 was like a high-tech bank robbery that stole $1.5 billion worth of cryptocurrency. This wasn’t a simple smash-and-grab but more like an elaborate heist from a movie. (Source: Chainalysis Bybit Exchange Hack Report)
Who Was Bybit?
Bybit was one of the largest cryptocurrency exchanges in the world – think of it like a digital bank where people bought, sold, and stored their cryptocurrency. Based in Dubai, they had sophisticated security measures, including a system requiring multiple people to approve large money movements (similar to how a bank vault might require two keys from different managers).
How The Hack Happened
The Planning Stage (Late 2024 – Early 2025)
- A group of hackers believed to be working for North Korea (called the Lazarus Group) began studying Bybit’s security
- They researched the company’s employees through professional websites and social media
- They sent fake job applications with hidden malware (malicious software) to key employees
Getting In The Door (Early 2025)
- A Bybit developer opened what looked like a normal job application PDF
- This secretly installed hidden software on their computer
- The hidden software spied on Bybit’s systems without being detected
The Theft (February 2025)
- Changing What People See: The hackers changed what Bybit’s security staff saw when approving transactions – like replacing a real security camera feed with a pre-recorded one.
- The Trick: When Bybit employees thought they were approving routine money transfers, they were actually approving transfers that gave control to the hackers.
- The Getaway: Once they gained control, the hackers transferred 401,347 ETH (worth $1.5 billion) out of Bybit’s accounts. (Source: NCC Group Technical Analysis)
- Hiding The Money: To avoid being caught, the hackers:
- Quickly split the money across many different accounts
- Converted the stolen crypto into different types of cryptocurrency
- Used special services that mix cryptocurrencies together to hide their tracks (like laundering money) (Source: Crystal Intelligence Investigation)
What Happened After The Hack
- Bybit discovered the theft when their monitoring systems detected unusual activity
- They immediately froze all withdrawals to prevent more money from being stolen
- They worked with blockchain tracking companies and law enforcement to try to recover the funds
- The crypto market dropped significantly as news of the hack spread
- Regulators in many countries began pushing for stricter security rules for crypto companies
- Some of the stolen funds were frozen on exchanges, but most remained missing
Why This Matters
Even with advanced security, the hackers didn’t break through the technical defenses – they tricked the humans operating the system. This is like thieves who don’t break a lock but instead trick someone into giving them the key.
Conclusion
The world of cryptocurrency offers exciting possibilities but also new risks. The Bybit hack shows that even sophisticated organizations can be vulnerable, especially to tricks that target human behavior rather than technology.
Think of securing your cryptocurrency like protecting any other valuable possession:
- Keep most of it in secure storage
- Be suspicious of deals that seem too good to be true
- Take time to verify before trusting
- Start with small amounts until you’re comfortable with how things work
Remember that in the crypto world, there’s no bank or government that can easily reverse transactions or reimburse you if something goes wrong. This means personal responsibility is much more important than with traditional banking.
By understanding the common scams, recognizing the warning signs, and following basic security practices, you can enjoy the benefits of cryptocurrency while minimizing the risks – even if you’re completely new to this technology.