Cryptocurrency seems to be something people either love or hate these days, and rightly so. You can either make a great return on investment with crypto, or you can get scammed out of all your funds.
With new cryptocurrencies coming out every day, it can be hard to know what’s a scam and what’s real these days. The reality is that scammers are taking advantage of eager crypto investors to steal millions of dollars a day, and they often get away with it.
How Much Did Crypto Scammers Steal in 2021?
Scammers allegedly stole a total of approximately $14 billion in 2021. Keep reading to find out what some of the big crypto scams of recent times were.
Which Crypto Scams Took the Most?
Below are 3 examples of real-life cryptocurrency scams that stole millions of dollars from investors:
The Squid-Game Crypto Scam
In 2021, crypto scammers took advantage of the huge popularity of the Korean Netflix show The Squid Game to scam crypto investors.
SQUID crypto appeared in October of 2021 and marketed itself as a “play-to-win” cryptocurrency, sticking with the trend of the series.
The scammers claimed that investors would be able to use the SQUID tokens they bought to play online games that would earn them more tokens, and that they could then exchange SQUID for real money or other cryptocurrencies.
However, what really happened was something known as a “rug pull” scam. In this type of crypto scam, the fraudsters hype up the product to get millions of dollars in investments, without any real technology behind it.
Once they have enough money (or when people are onto them), they pull the rug out from under investors and disappear into thin air with all the money.
In the case of SQUID, investors began to realize it was a scam when they couldn’t withdraw their funds, and that’s when the scammers took down the site and ran off with everyone’s money.
The Colonial Pipeline Co. Bitcoin Scam
In another one of 2021’s biggest crypto scams, hackers took control of Colonial Pipeline’s systems and held them for ransom, demanding cryptocurrency payments in return.
These types of ransomware hackers are increasingly preferring crypto payments because it is much harder to trace and recover than traditional currencies.
In the case of the Colonial Pipeline Co. cryptocurrency scam, the company paid nearly $5 million in Bitcoin to get control of their systems back from the cyber attackers. The FBI was later able to recover about $2.3 million of the crypto.
The Impersonator and QR Code Coinbase Scam
The FTC recently warned of a new type of crypto scam in which someone impersonates a government official, a member of law enforcement, a prize promoter, or someone from a local utility company. The scam targets users of Coinbase and other crypto wallets.
Under false pretenses, the scammers trick people into paying them using cryptocurrency for some kind of fine, service, or other made-up scenario. They provide a QR code to make it easy for the victims to transfer crypto from their wallets.
Of course, the payment isn’t for anything real and the scammers just disappear with your crypto, never to be heard from again.
Cryptocurrency Red Flags
Spelling Mistakes on the Website/Emails
A website full of spelling and grammar mistakes is a big red flag that it could be a scam. These scam sites are often hastily set up by people who don’t speak English as a first language, so they are full of errors. Marketing emails about new crypto projects with errors are another red flag.
Promises That Sound Too Good To Be True
Crypto is not a magical way to “get rich quick,” so any new crypto project claiming that you can make large sums of money is likely a scam. For example, if someone promises to multiply your money for a small up-front payment, they are probably just going to take your money and run.
Contractual Obligations That Prevent You From Selling
You should always be free to sell your crypto and withdraw your funds at any time you want, so watch out for fine print that says otherwise. Always check terms and conditions before investing in any new cryptocurrency.
Blackmail or Extortion
Blackmailers are another type of scammers that are increasingly trying to get payments in crypto. They may send you an email claiming to have compromising photos or videos of you and demand payment in Bitcoin or another cryptocurrency. However, they are lying and trying to create a sense of urgency to get you to pay without thinking.
Large Social Media Crypto Schemes
Crypto scammers like to find their victims via social media. So, if someone reaches out to you on Instagram, Facebook, or another social network and asks you to invest in a crypto project, be very wary of them. You should only invest in trustworthy projects that you have independently researched or been referenced to by people you know.
How a Chargeback Can Help You Recover from a Cryptocurrency Scam
If you’ve lost money due to one of the many cryptocurrency scams out there, don’t panic. You may be able to get it back through a chargeback, provided you made the payments using a credit card or other payment card.
Chargebacks are formal processes in which you explain how you were scammed in writing to your bank, card issuer, or other financial institution.
You will provide all the evidence you have, and loss prevention specialists at the institution review it to come to a decision. If they approve your request, they reverse the funds and the money you lost goes back on your card.
You can request a chargeback yourself, but you can also hire a chargeback company to help you navigate the process. A chargeback company is a type of fund recovery firm that specializes in getting chargebacks approved.
These fund recovery specialists have years of experience processing thousands of chargeback requests, and know exactly how to gather and present the evidence for the highest chances of success.