# Most Common Crypto Scams and How to Avoid Them?

By [crypto-kingpin.eth](https://paragraph.com/@crypto-kingpin-eth) · 2023-02-21

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crypto is notorious for being a space with tons of scammers. it is almost impossible to be on **twitter** and never come across to one of these types of scams.

even though you may think that it is too obvious that a person is trying to scam you or not, but still a lot of people **fall into** the trap.

obviously there are **many** scamming methods in crypto space, so I can’t cover all of them but here is a list of most **common** and **dangerous** methods that are being used.

### 1) Giveaway Scam

it is a method where scammer wants to send you tokens, but first he needs you to send him a small amount to verify your address. most of the time they will send you a link to their website to show you a list of fake transactions and convince you that a lot of people received the money

also this method is very common on youtube, where you see elon musk or any other big name talking on a live stream and the scam link in the description where they act like the scam token is the subject of discussion in the live stream. in reality it is only a footage of a famous person talking about a completely different topic

![elon musk live stream](https://storage.googleapis.com/papyrus_images/56229cfed2afa264777834dd0c920984b80fbdd81349f923ad348e0082d832eb.png)

elon musk live stream

### 3) RugPull

**rugpull** is also a very common method that happens a lot in the **NFT** space. where the holders buy the NFT for expensive prices and the founder **leaves** the project with all the **liquidity** by deleting every social media platform and the NFT holders stay with **worthless** images

if you want to avoid these kinds of scams you have to make sure the liquidity is **locked** for a period of time, so the developers can’t pull out the **liquidity** any time they want.

if you want to know how you can check if the liquidity is **locked** or **not**, check out [this article](https://mirror.xyz/0x93057660E47B46Fb5bbD5c14120AAE15d8435ECd/JaskLE1_KtJNHGEYMYKHSHFt2_rWKC50-4VlxKyM3e8).

### 3) Phishing Scam

the most common form of phishing scam is **asking** for the **seed phrase** of your wallet or **malicious software** that steals your seed phrase. even the most complicated functionalities in crypto space doesn’t require your seed phrase, so if website or app asks you to enter the seed, **get out** immediately.

another form of phishing scam is when you try to **install a new wallet**, the given “supposedly new“ seed phrase, is the seed phrase of the **scammer**. so at that moment if you send any funds the scammer has full access to it and can **steal** your funds

### 4) Impersonation Scam

most common form is where the scammer is trying impersonate a celebrity. this happens a lot on **twitter** and **youtube**, where **vitalik buterin** or **elon musk** is messaging you and saying you’ve won an airdrop or something like that and he needs you to send him some money before he can give you the airdrop

if you get a message from a famous person make sure to check their full profile and don’t be confused by their name. in reality the chance of some celebrity messaging you is almost 0

### 5) Ponzi Schemes

A Ponzi scheme is usually an **investment scam** designed to attract investors with the promise of generating **high and quick rates** of returns off the back of a non-existent enterprise. with this method the scammer pays huge amounts of money to early investors with the funds of new users

it is actually relatively **hard** to spot a ponzi scheme, because in this case they are actually paying the users for a period of time, and this makes it really appealing for a lot of people and they’ll start to come in. these are the most **common** signs that you are dealing with a ponzi scheme:

1.  The promise of **quick** and **risk-free** investment returns, **regardless** of market conditions
    
2.  Investment models or business activities behind such schemes that are presented as allegedly **too complex** to explain

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*Originally published on [crypto-kingpin.eth](https://paragraph.com/@crypto-kingpin-eth/most-common-crypto-scams-and-how-to-avoid-them)*