Login
iscover
Share this article on:
Powered by
MOMENTUM
MEDIA
Powered by MOMENTUMMEDIA
Cryptocurrency scams cost investors more than US$10 billion in 2024; here’s what to watch out for and how to keep your money safe.
Bitcoin recently climbed to a new high of US$174,235 in late May, but with every boom comes risk, especially from scammers.
Globally, scammers made off with more than US$10 billion last year, with Australians, in particular, losing at least $180 million to cryptocurrency scams in the same period.
“Cryptocurrency has opened up incredible opportunities, but it has also introduced serious risks – especially with the rise of AI-driven deepfakes,” Mariam Iashagashvili, of cryptocurrency exchange ApeX Protocol, said in a statement.
“Scammers are now using AI to create convincing videos and messages that impersonate trusted figures, tricking people into following false recommendations. What’s even more alarming is how quickly these scams can scale.”
Staying safe in such a boom market is a matter of being aware of how scammers operate and staying personally secure. Here are six practical tips to keep scammers at bay.
1. Store your seed phrase safely
While most people store their seed phrase, used to access their cryptocurrency wallets, saved in note-keeping apps or on cloud storage, this leaves it – and their crypto – open to compromise. Best practice is to keep your seed phrase written on physical media in multiple secure locations. Also, never share your seed phrase, either digitally or physically.
2. Watch out for social media scams
AI-powered scams based on celebrities commonly circulate on social media. Elon Musk, known for his own crypto investments, is a particularly popular figure in such scam campaigns. To stay safe, only engage with verified profiles, only use official pages, and be very wary of any unsolicited offers.
3. Beware of smart contract vulnerabilities
Smart contracts are essential to decentralised finance, but are also vulnerable to several exploits. One DeFi protocol lost US$120 million in 2023 due to flaws in its smart contract. Only interact with properly audited contracts, limit token approval permissions, and take advantage of the contract review features of hardware wallets to stay safe.
4. Verify all wallet addresses
Clipboard hijacking can replace any copied wallet address with one linked to scam operators. To avoid this common scam, manually verify all wallet addresses at every stage of a transaction, take advantage of QR codes, and invest in a hardware wallet.
5. Stay safe from cyber attacks
Desktop computers and mobile devices are commonly targeted with keyloggers, screen recording tools, and other forms of malware, with the aim of harvesting cryptocurrency credentials and draining wallets. To avoid these attacks, keep operating systems fully updated, use full disk encryption alongside anti-virus software, and use dedicated devices for all transactions.
6. Test transactions before sending large amounts of crypto
Research from Coinbase shows that 33 per cent of crypto losses are the result of user error, such as typos in wallet addresses. This can be avoided using small test transactions to confirm that the details are correct. Always confirm receipt of funds following these transfers before moving larger sums.
“A single deepfake or AI-generated message can reach millions of people across social media in minutes, creating a wave of false trust that’s hard to contain,” Iashagashvili said.
“Education, vigilance, and systemic solutions like better AI detection tools and stricter platform regulations are key. By staying informed and working together, we can protect ourselves and help build a safer crypto space for everyone.”
David Hollingworth has been writing about technology for over 20 years, and has worked for a range of print and online titles in his career. He is enjoying getting to grips with cyber security, especially when it lets him talk about Lego.
Be the first to hear the latest developments in the cyber industry.
