How to Avoid Crypto Scams
The best cure is prevention. In a market rife with scammers, it can be easy to fall for a ruse. Learn how to avoid crypto scams to help keep you and your crypto safe.
Know common scams like phishing, fake investments, impersonation, and rug pulls; recognizing patterns helps you avoid them.
Never share your seed phrase or private key, and only use reputable, secure platforms with verified URLs and strong user protections.
Protect your devices and accounts with 2FA, strong passwords, hardware wallets, and by avoiding suspicious apps or links.
Verify everything, addresses, websites, and people, and use cold storage for long-term holdings; if it seems too good to be true, it probably is.
1. Be aware of common scams
Crypto scams typically fall into a few categories:
Phishing: Fake websites or emails that trick you into giving away keys
Fake investments: Promises of huge returns with no real product
Impersonation: Scammers pretending to be influencers or support agents
Rug pulls: Fraudulent projects that disappear with your funds
Knowing these types helps you spot trouble faster.
Read next: Bitcoin and Crypto Scams
2. Never share your private keys or seed phrase
Your private key or seed phrase is the only way to access your crypto wallet. Anyone with this info can drain your funds. No recovery is possible.
Avoid at all costs:
Typing it into websites
Sending it to “support” agents or bots
Storing it in plain text on your phone or computer
Your private key or seed phrase is the single most sensitive piece of information in the crypto world. It acts as the master key to your wallet. Anyone who gets access to it can take full control of your assets, and once crypto is sent, it can’t be reversed.
Legitimate platforms will never, ever ask for this information. Not via phone call, email, text message, or DMs on Telegram, Twitter, or anywhere else.
Even customer support from trusted companies like Coinbase, MetaMask, Ledger, or Binance will tell you not to share it, ever.
Scammers often impersonate support agents and trick users into entering their seed phrase on fake login pages or over chat. These tactics can be extremely convincing, especially when you're in a panic about missing funds or locked accounts. Don’t fall for it.
Best practice: Write it down on paper and store it securely offline (preferably in a fireproof safe). Never store it in email, cloud storage, or messaging apps.
3. Stick to reputable platforms
Using the right platform reduces your chances of getting scammed by fake exchanges or hacked wallets. Look for:
Regulatory compliance (e.g., registered with FinCEN in the U.S.)
2FA and security controls
Transparent leadership and company info
Consistent branding across social media and websites
Always check that you’re on the official site before entering any personal details. Fake sites of legitimate platforms are rife.
Bonus tip: Use websites like CoinMarketCap or CoinGecko to verify official URLs and token contracts.
Read next: Best Crypto Exchanges
4. Secure your devices and accounts
Your digital security matters just as much as your blockchain smarts. Scammers often get in through your phone or computer, not just your wallet.
What to do:
Use unique, complex passwords and a password manager
Enable 2-factor authentication on all crypto platforms
Install updates regularly on all devices
Avoid installing shady apps, extensions, or pirated software
Use hardware wallets for larger balances (cold storage)
If it feels like a hassle, that means it’s working.
5. Always verify before you trust
Scammers rely on urgency. They want you to act fast, before you verify.
Slow down and ask:
Is this the real website? Bookmark official links.
Is this person who they say they are? Check usernames, badges, and spelling.
Is this opportunity too good to be true? Then it probably is.
Can I double-check this with a trusted source? You always should.
Don’t send crypto based on messages from Discord, Telegram, or DMs, even if the profile looks real. Remember, anyone can verify on Twitter for a price now.
6. Do your own research (DYOR)
Before buying any token, NFT, or participating in a DeFi protocol:
Check the team: Are they doxxed (real, public individuals)?
Read the whitepaper: Does it explain a real use case?
Review tokenomics: Who owns most of the supply? Are wallets public?
Look for audits: Smart contracts should be reviewed by third-party security firms
Watch the community: Is it full of bots or actual discussion?
If you can't explain the project in your own words, don’t invest.
7. Use cold storage for long-term holdings
Hot wallets (connected to the internet) are convenient but more vulnerable. For serious amounts of crypto:
Get a hardware wallet (e.g., Ledger, Trezor)
Transfer excess funds off exchanges
Keep your recovery phrase somewhere safe, but not digital
8. Be cautious of airdrops and giveaways
Airdrops and giveaways are common scam vehicles. If someone says:
“Send 0.1 ETH to get 1 ETH back!”
…it’s a scam.
Real airdrops and giveaways:
Never ask you to send crypto first
Are hosted on verifiable official accounts
Typically require filling out forms, not wallet access
Use skepticism as your default setting.
9. Report scams and help others stay safe
If you’ve encountered or fallen victim to a scam:
Report to the FTC: reportfraud.ftc.gov
File with the FBI’s IC3
Notify your crypto exchange or wallet provider
Warn others in crypto communities (without sharing sensitive info)
Your report can help others avoid the same trap, and may support a wider investigation.
Overall, stay smart and stay skeptical. Crypto empowers you, but it also makes you the security team. There’s no bank to call, no reversal button. But that also means you're in control.
Read next: How to Report Stolen Crypto
Don’t forget the tax bill…
If you’ve unfortunately fallen foul of a crypto scam, there might be a silver lining in your tax bill. Depending on where you live, you may be able to claim a loss and reduce your tax liability. Learn more in our guide on how to report stolen cryptocurrency on taxes or our crypto tax write-offs guide.
