Security Alert: 4 Different Types of Scams You Should Know About: Part One
As security measures continue to evolve, so do scammers. With the introduction of AI, scammers are getting more advanced, sneaky, and creative. But it’s not just AI scams you need to watch out for; traditional scam methods are still active, and they’re not as easy to spot as you may think. Here are 4 different types of scams to look out for.
Deepfake and AI impersonation scams
Scammers use AI to create realistic fake videos, clone voices, and impersonate celebrities, executives, or even loved ones. The goal? To gain your trust, lure you into a fake crypto investment, or convince you to send cryptocurrency or hand over your account details.
How the scam works:
Impersonation: Scammers use artificial intelligence (AI) to create realistic but fake videos, images, or voice recordings of celebrities, crypto industry figures, or representatives of trusted companies. These “deepfakes” make it appear that the person is promoting a cryptocurrency investment, campaign funding, trading platform, or even sometimes a giveaway.
Promotion: The fake content is shared through social media ads, livestreams, or fake news articles. Scammers copy familiar branding and use false endorsements to make the offer appear real, often promising high returns or claiming the opportunity is only available for a limited time.
Payment: Users will be led to a fraudulent website or platform, where they are encouraged to deposit money or transfer crypto. Some scams will disguise this as an investment; others claim users must send crypto first to receive a larger amount in return.
Deception: Fake investment platforms may display false trades and profits to encourage a victim to make further deposits. Scammers sometimes also pose as account managers, contacting users directly and pressuring them to invest more.
Theft: When users attempt to withdraw their funds, scammers may block access or demand additional payments for supposed taxes or withdrawal fees. The promised investment or giveaway never comes through, leaving victims without their money.
Key Warning Signs:
Audio and visual:
- Faces or mouths aren’t in sync with audio
- Blurry backgrounds
- Phrases that sound repeated/scripted or unnatural.
- Robotic or monotone voices that do not show emotions.
Messaging:
- Urgent language: “act now”, “time is running out”.
- Strange requests, like asking for money to be transferred, your personal banking details, or asking you to purchase a gift card.
- Fear tactics and emotional manipulation.
Rug Pulls and Token Scams
Perhaps the most common type of exit scam, the rug pull is when project creators hype a new token and significantly push users to invest in it, only to drain its liquidity pool and dump their holdings abruptly, leaving investors with assets that are now worthless.
How the scam works:
Creation: The “creators” (scammers) create a brand-new, low-cost token.
Liquidity theft: They typically pair the new token with an established and trusted cryptocurrency in a liquidity pool on a decentralised exchange. Holders trade their existing assets for the new token, which adds more value to the pool.
Hype: Developers (scammers) use social media, influencer partnerships, and other aggressive marketing tactics to hype the token, with false promises of high earning potential to attract investments. This artificially inflates the token price.
Exit: As retail investors rapidly invest during what is called the “pump phase”, those involved in the scam will sell off their holdings at the peak price; this causes the price to crash and leaves investors with worthless assets.
Often, those involved in the scam will claim this was a legitimate launch and scheme, that they were legitimately selling their tokens; it’s the intent behind the launch, which is to deceive investors for profit, that makes this a form of rug pull.
Key Warning Signs:
Unlocked liquidity: This means that developers can withdraw funds at any moment, without any notice.
Community engagement: If you’re seeing marketing for the token everywhere, but little genuine community engagement, that’s a red flag.
Undefined token utility: Be wary of tokens with vague or questionable uses, particularly those promoted through unfamiliar websites or Telegram groups.
A reminder to always stay vigilant: it's okay to pause, verify the validity of a situation you've encountered, and be cautious. Next week we take a deeper look into two more common scams that crypto investors may encounter and what to look out for. In the meantime, stay alert and aware, and always take precautions when making investments.
