Pig butchers, airdrops, pump and dump... The most common cryptocurrency scams

Radio Canada has published damning testimonies from victims of cryptocurrency scams. For example, the story of a woman who lost 250,000 Canadian dollars after being lured by a false advertisement featuring Elon Musk.

Follow Showbizz Daily to stay informed!

From the end of the celebrities, there are complaints and warnings as well. Besides Elon Musk, the French television presenter Anne-Sophie Lapix was also the indirect victim of a cryptocurrency scam. The crypto company 'Immediate Momentum' used her image without her consent to promote its trading activities.

On her Instagram account, the French celeb denied any link with this site: "Cryptocurrency scam alert. I have nothing to do with the Immediate Momentum company. It's a pure scam. Don't get tricked."

Anne-Sophie Lapix also warned against fake accounts and false articles fraudulently using her image or that of other journalists: "Do not under any circumstances give money to anyone claiming to be me, Nagui, Stéphane Bern, or any other personality."

Financial investment scams are an old practice. However, the rise of cryptocurrencies and the ability for scammers to operate online have increased the possibility of reaching many victims.

Image: Kanchanara / Unsplash

The scams with fake celebrity endorsements weren't the first online scams in the realm of cryptocurrencies, and they won't be the last. Here, we give you a few more examples.

Image: Shubham Dhage / Unsplash

The year 2022 was marked by the resounding bankruptcy of FTX, which was the third-largest cryptocurrency trading platform in the world. The company had embezzled its customers' money and its former managers now face heavy prison sentences.

The Plexcoin cryptocurrency was another notorious scam. Until 2017, Plexcoin operated on a Ponzi scheme, promising a dizzying return on investment of 1300% per month. $15 million were extorted from investors and the currency's creator was imprisoned.

Image: Kanchanara / Unsplash

Another Ponzi scheme came to an abrupt end: Bitconnect. Promoted by many YouTubers, the platform ceased its activity in 2018 after embezzling hundreds of thousands of dollars.

Image: Kelly Sikkema / Unsplash

These Ponzi schemes were based on a system of "sponsorships." They promised exponential gains for investors who managed to bring in other investors. It's a model which is all too common and cryptocurrency professionals often denounce it themselves.

Image: Kanchanara / Unsplash

In other cases, the cryptocurrency offered by a company simply doesn't exist. The CoinMarketCap platform counted 21,000 digital currencies in 2022. Many of them are worth absolutely nothing.

Image: Kanchanara / Unsplash

Another common practice is 'pulling the rug.' The initiator of a new crypto project will suddenly abandon it and disappear with the investors' funds.

Image: Shubham Dhage / Unsplash

An example is the YouTuber Crypto Gouv who defrauded around 300 people and embezzled 4 million euros by offering investments in cryptocurrencies. He suddenly disappeared without anyone knowing his true identity.

Image: Leon Bublitz / Unsplash

Another classic technique is the 'pump and dump'. For the scammers, it involves artificially increasing the price of a cryptocurrency and then selling it at its highest point, leaving all the cryptos behind. Due to the sudden rise of supply, the cryptocurrencies depreciate immediately and the other investors are left with worthless tokens.

Image: Maxim Hopman / Unsplash

Relying on a more emotional tactic, this type of scam is a combination of catfishing (online romance with a fake identity) and financial scamming. The so-called 'pig butchers' seduce their victims online, then ask them for money or investments in cryptocurrencies, and finally disappear without warning. As cryptocurrencies cannot be traced, the culprit can rarely be found.

Image: Andre Taissin / Unsplash

And then there's the practice of 'airdropping': canvassing via instant messaging applications such as WhatsApp to advertise the launch of a new cryptocurrency. The token is supposedly 'given away' to a select number of investors, but in the end, they have to pay steep fees to recover the worthless tokens.

Image: Piggybank / Unsplash

As you can see, there are several ways in which cryptocurrencies have enabled scammers to find new ways to cheat you out of your money. Always be vigilant when trying to make a buck in this digital market!

Image Nordwood Themes / Unsplash

Follow Showbizz Daily to stay informed!