Cypherguard

Is crypto a scam?

Cryptocurrency has gone from niche tech experiment to global financial phenomenon, and with it, a lot of confusion and controversy. Is crypto a scam? A bubble? A revolution? Or something in between?

In 2025, millions of Australians and Americans are using digital assets, whether it’s Bitcoin, Ethereum, or the latest token on a flashy new exchange. But with so much hype comes a flood of misinformation and, unfortunately, a wave of crypto-related scams.

This blog will break down the truth behind crypto: what’s legit, what’s not, and how to protect yourself from getting burned. Whether you’re new to crypto or just skeptical, this guide will help you separate the real promise from the real risks.

Is Crypto Itself a Scam?

The short answer is: no, crypto itself is not a scam. The technology behind cryptocurrency blockchain is a real, verifiable innovation. It allows for secure, decentralised record-keeping that doesn’t rely on traditional banks or governments.

Popular cryptocurrencies like Bitcoin and Ethereum are used by legitimate investors, institutions, and even governments around the world. In Australia, cryptocurrency is legal and regulated by the Australian Securities and Investments Commission (ASIC). In the US, the SEC and CFTC oversee certain crypto activities.

But just like the internet in the 1990s, crypto’s rapid growth has attracted scammers looking to exploit the hype, confusion, and lack of global regulation.

 

The Real Scams in Crypto

While cryptocurrency itself isn’t a scam, the industry has become a magnet for scammers due to its anonymous nature, complex technology, and the lack of consistent global regulation. In 2024 alone, Australians reported more than $150 million in losses tied to crypto scams, and the number continues to rise in 2025.

Below are the most common and dangerous crypto scams currently targeting users in both Australia and the US:

 

1. Fake Investment Platforms

Scammers create professional-looking websites and apps that claim to offer crypto investment opportunities with “guaranteed” returns. Victims are lured in through ads on Facebook, YouTube, or TikTok, sometimes featuring deepfake videos of celebrities or financial experts.

These sites often include:

  • Live profit dashboards (entirely fake)
  • “Customer service” agents who build trust
  • Withdrawal options that never actually work

The scam continues until victims either run out of money or realize the platform was a fraud. In many cases, users are asked to pay “release fees” or “taxes” to access their fake earnings a tactic known as double-dipping.

 

2. Pump-and-Dump Schemes

Fraudsters create or promote a low-value crypto token, artificially inflate its price by generating hype (using bots, influencers, or fake news), then sell their holdings at the peak. As soon as they cash out, the price crashes, leaving average investors holding worthless tokens.

Common traits:

  • Flashy names or celebrity references (e.g. “ElonMoonToken”)
  • Aggressive shilling on Reddit, Discord, and Telegram
  • No whitepaper or transparency about tokenomics

While technically legal in some jurisdictions, these schemes are ethically dubious and financially devastating for unsuspecting investors.

 

3. Romance Scams Involving Crypto

Scammers build relationships on dating apps or social media, then slowly introduce the idea of a “safe” or “exclusive” crypto investment. Victims are told they can get in early on a private coin or platform but it’s really a fake site controlled by the scammer.

These scams are especially damaging because they combine financial loss with emotional manipulation. The victim often doesn’t realise it was a scam until the relationship abruptly ends and the platform becomes inaccessible.

 

4. Phishing & Wallet Drainers

One of the most technical and fast-growing threats in 2025. Scammers send phishing links via:

  • Emails that look like Binance, Coinbase, or MetaMask
  • Popups that mimic wallet login screens
  • Twitter replies that redirect to malicious sites

Clicking these links can give hackers access to your wallet seed phrase, allowing them to drain your entire crypto balance in seconds.

Some advanced scams even mimic legitimate smart contracts that, when signed, grant unlimited withdrawal permissions to the attacker.

 

5. Airdrop & Giveaway Scams

You’ve probably seen them: “Send 0.1 ETH and receive 1 ETH back!” or “Claim your free tokens — just connect your wallet!” These scams are rampant on X (Twitter), Discord, and Telegram, often featuring:

  • Fake Elon Musk or Vitalik Buterin accounts
  • Hacked verified pages promoting giveaways
  • Impersonations of known projects (like Chainlink or Solana)

Victims are tricked into sending tokens or exposing their wallet through a malicious smart contract, often losing all of their funds in one click.

 

6. Rug Pulls on DeFi and NFT Projects

In these scams, developers launch a crypto or NFT project, raise millions through presales, then disappear, deleting their websites, Discord servers, and social media presence. These “rug pulls” were common in 2022–2024, and still pose a major risk in 2025.

Key warning signs:

  • Anonymous developers
  • Unrealistic roadmaps or returns
  • No independent audit
  • No working product or utility

 

Why These Scams Work

Crypto scams work because they tap into powerful psychological triggers:

  • Greed: The hope of quick, easy returns
  • FOMO (Fear of Missing Out): Urgency and exclusivity
  • Trust: Built through fake relationships or endorsements
  • Complexity: Most people don’t fully understand blockchain or wallet security

Scammers often mix emotional manipulation with technical tricks, making it hard to tell what’s real and what’s not.

 

How They Appear Legitimate

To make their operations look credible, scammers often use:

  • Professionally designed websites and apps
  • Deepfake videos of trusted personalities
  • Doctored screenshots and fake testimonials
  • Verified social media accounts (hacked or purchased)
  • Names similar to real projects (e.g. “EtherrumFund”)

These tactics have fooled even seasoned investors.

Case Study: $370,000 Lost to a Crypto Romance Scam in Sydney

In early 2024, a Sydney woman lost over $370,000 after meeting a man on a dating app who encouraged her to invest in a “low-risk crypto fund.” CypherGuard traced the fake investment platform and wallet to a known scam network now under law enforcement review.

 

How to Know What’s Legit vs. What’s a Scam

Ask yourself:

  1. Can you verify who’s behind it?
  2. Is your money going to a real wallet?
  3. Are they pressuring you to act fast?
  4. Are the returns too good to be true?
  5. Can you withdraw your funds easily?

If anything feels off, pause and verify.

 

How to Protect Yourself in the Crypto World

  • Use regulated exchanges (CoinSpot, Coinbase, Binance)
  • Set up 2FA and use cold wallets
  • Don’t trust random DMs, emails, or QR codes
  • Research tokens on CoinGecko or CoinMarketCap
  • Always go to official websites manually

 

How CypherGuard Helps Victims of Crypto Scams

CypherGuard uses:

  • Blockchain forensic tracking
  • Scam domain intelligence
  • Network analysis of wallets
  • Metadata to support legal action

We move fast to help you recover funds or escalate cases while scammers are still active.

 

Is Crypto Regulated? What the Law Says

Australia

  • Regulated by ASIC, AUSTRAC, and ATO
  • Report to: Scamwatch, ReportCyber, eSafety

United States

  • Overseen by SEC, CFTC, and IRS
  • Report to: FBI IC3, FTC, FinCEN

Crypto itself is not a scam. But the industry still attracts a dangerous volume of fraud.

 

Stay informed. Stay alert. Act fast.

And if something goes wrong, CypherGuard is your trusted partner for scam report and digital evidence.

Lost crypto? Unclear if a platform is legit? Contact CypherGuard now.

 

FAQ:

Can I recover lost crypto?
Sometimes, if action is taken early with expert help.

Are all tokens risky?
No, but always research before investing.

What if I used a fake site?
Save all data and contact CypherGuard for tracing.

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