Don’t Fall for it: Lessons from Zengo in Avoiding Crypto Scams

Even though Zengo’s advanced security protects you from hacks and theft of all types, crypto users still fall prey to scammers when spending their crypto on the internet. That’s why we’re sharing with you the scams most frequently-encountered by crypto users.  Keeping yourself informed is the best way to keep yourself safe.

Zengo’s Most Commonly Seen Crypto Scams

1. Impersonation Scams  

“Send me crypto and I’ll give you…” What follows the “send me crypto” line doesn’t matter; whatever it is, you’ll never get it anyway. 

 A recently trending Twitter scam. If you couldn’t tell, this is not the real Elon Musk.
Image Source: Twitter

90% of the scams we observe follow this pattern. First, users join a social network group for a particular influencer or project that seems legit, for example, Elon Musk above. Next, the user is approached by someone from the channel who engages with them 1-on-1. In this separate channel, the attacker asks them to send them crypto with the promise of a profitable return. Sometimes the whole channel is malicious; other times it is only a single user in the channel. For example, the above tweet has been circulating on Twitter recently. 

How to protect yourself from Impersonation Scams: 

No legitimate person will ever ask you to send them crypto or guarantee returns on investment. Be very wary of any person you do not know on the internet who offers to send you free crypto. If you’re still skeptical, cross-check the group’s URL with the information listed on the company’s official website. Then, contact an admin and double-check the identity of the potential scammer. 

2. Coronavirus Scams 

Unfortunately, given the wave of fear gripping consumers, scammers have begun targeting customers looking to purchase necessities online. Oftentimes, these scammers begin by advertising their goods on legitimate consumer sites like Amazon or eBay. After enticing their victims, they switch to third-party apps and ask the victims to pay with crypto. Other scams look to take advantage of people new to remote work, targeting their home computers with malware

How to protect yourself from Coronavirus Scams:

Unfortunately, scammers thrive during times of fear. They expect fear to motivate people into making poor decisions. Don’t let fear blind your judgment. Be careful clicking on coronavirus-related links and only ever make transactions over legitimate websites. 

A circulating scam that sends text messages claiming to provide valuable information about the outbreak. In reality, the link infects devices with malware.
Source: Scamwatch

3. Private Key Scams 

This scam is one that commonly targets beginner crypto users. Oftentimes, beginners misunderstand the relationship between public and private keys. Private keys are used to access your wallet and spend your money. Public keys are simply addresses to which others can send you money. Scammers take advantage of this misunderstanding and request private keys from users and then use this crucial bit of information to steal their crypto. No one should ever need your private key. 

How to protect yourself from Private Key Scams: 

Download and use Zengo! With Zengo, there is no private key for a scammer to steal. If you’re not already using Zengo, remember to never, under any circumstances, share your private key with anyone. Read more about Zengo’s keyless solution here.

Zengo’s recovery solution liberates you from private key management

4. Phishing Scams 

Scammers buy confusingly similar domain names to legitimate sites and mirror the original sites to try to trick people into sending them their crypto. 

How to protect yourself from Phishing Scams: 

Always double-check the URL and bookmark frequently-used sites. Don’t trust any site that lacks the “SSL Security Certificate” in the top left of the URL bar. MetaCert also provides a valuable feature that designates whether a URL is safe or not.

5. Ponzi Schemes and Scam Companies 

Unfortunately, Ponzi schemes and scam companies target crypto users just as they target everyone else. Oftentimes, these schemes promise “guaranteed returns or payouts” and prove more profitable the more people that victims onboard. 

Bitconnect was a crypto Ponzi scheme that collapsed in 2018.
Source: WikiCommons

How to protect yourself from Ponzi schemes:

If something is too good to be true, it probably is. There is no such thing as guaranteed investment returns and anyone telling you as much should be ignored. Always do outside research before making any investment. 

6. Fake QR Code Scams

In 2019 we published research on QR generators, in which we discovered that out that 4 out of the first 5 Google results were scammer sites. 

The scam is simple. The scammy QR generator displays a QR of their address instead of the victim’s original address. 

Request: address 18Vm8AvDr9Bkvij6UfVR7MerCyrz3KS3h4
Result: address 17bCMmLmWayKGCH678cHQETJFjhBR44Hjx

This scam did not stop after our research. Additional networks of other QR scam sites had been discovered. 

How to protect yourself from QR scams:

  1. Instead of googling QR generators, use a site you trust, such as your favorite block explorer.
  2. Before sharing the QR, scan it with a wallet app and verify that the scanned address is your original address. 

7. Malware 

Malicious links or downloads bring malware onto user devices. Scammers steal information or hold the device hostage until some amount of crypto is paid. iOS is generally safe from malware attacks but desktops and Android-based devices remain vulnerable. 

How to protect yourself from Malware: 

Never download or click any links from questionable sites. Downloading an antivirus program (even free web-based apps are effective) can help protect you from these types of scams. 

General tips to always follow to keep your crypto safe:

1. Never be in a hurry to spend your money – If people are urging or hurrying you to spend your money, calm down and slow down. You should never be in a hurry to spend your money, but assume everyone is in a hurry to get your money. 

2. Never go off a trusted platform to perform a transaction – Oftentimes, scammers will use legitimate platforms to inspire trust and hook victims. They will then often lure their victims away from the legitimate site to a third-party platform to conduct the transaction. This is bad news. 

3. If it’s too good to be true, it probably is – Guaranteed returns, free crypto, long-lost uncles with huge inheritances – don’t trust any of them. 

4. Never click sketchy links or downloads from anyone you don’t recognize.

Above all, keep your crypto in a wallet that you trust, like Zengo.

Zengo’s breakthrough security, based on threshold signatures, helps protect you from hacks and private key theft. Keeping your wits about you will help protect you from everything else.