Protecting Yourself from Crypto Scams

You're introduced to a website or app that looks like a professional trading platform. It promises amazing, guaranteed returns — like 2% a day. You start with a small amount, and your account balance on the screen grows incredibly fast. Encouraged, you invest more. But when you try to take your money out, you can't. The platform was fake, and your money is gone.

What it Looks Like: A friend of a friend tells you about a "private" crypto fund they're using. They show you a slick app on their phone where their $1,000 has turned into $10,000 in a few weeks. It seems so real.

Analogy: This is the digital version of a fake gold dealer with a fancy shopfront. They might sell you a small, real gold nugget for a good price to gain your trust, but when you come back to buy a big gold bar, they sell you a gold-plated fake.

A stranger contacts you on social media, LinkedIn, or a dating app. They're friendly, intelligent, and interested in you. Over weeks or months, they build a genuine friendship or romantic connection. Then they casually mention they've been making great returns in crypto. They offer to show you how. You invest a small amount and see "profits." You invest more. Then more. Then one day — the platform disappears, the person disappears, and your money is gone.

Why it works: The scammer invests weeks or months building trust before asking for money. By the time they ask, you genuinely like and trust them.

Red Flags: Unsolicited contact from strangers; unusually high returns; pressure to invest more; platform not registered with ASIC or AUSTRAC; can't withdraw funds easily.

The Rule: Never invest in crypto on the recommendation of someone you've only met online, no matter how much you trust them.

You're directed to a professional-looking website that appears to be a legitimate crypto exchange or investment platform. You deposit funds. The platform shows impressive "returns." When you try to withdraw, you're told you need to pay a "tax" or "fee" first. You pay. They ask for more. Eventually, the site disappears.

Red Flags: Not registered with ASIC; no AFSL number; no physical address; no verifiable team; can't find independent reviews; pressure to deposit quickly.

The Rule: Always verify a platform's AFSL number on the ASIC website before depositing any funds.

You see an ad on social media or YouTube featuring a well-known Australian celebrity (Andrew Forrest, Gina Rinehart, or even the Prime Minister) endorsing a crypto investment opportunity. The ad looks professional and legitimate. You click through, invest, and lose everything.

Red Flags: Celebrities don't endorse specific crypto investments. If you see one, it's a scam — 100% of the time.

The Rule: No legitimate crypto investment is promoted through celebrity endorsement ads on social media. Always.

You receive an email, SMS, or social media message that appears to be from a legitimate crypto platform (Coinbase, Binance, your bank). It tells you there's a problem with your account and asks you to click a link and enter your login details. The link goes to a fake website that looks identical to the real one. You enter your details. The scammer now has your login credentials and empties your account.

Red Flags: Urgency ("Your account will be suspended"); requests for login details; links that don't match the official domain; poor grammar.

The Rule: Never click links in emails or SMS messages. Always go directly to the platform's website by typing the URL yourself.

You're added to a Telegram or WhatsApp group where "experts" share hot crypto tips. They recommend a little-known coin that's about to "explode." You buy in. The price rises. You feel great. Then suddenly the price crashes — the "experts" have sold their holdings at the top, leaving you holding worthless coins.

Red Flags: Unsolicited invitations to investment groups; promises of guaranteed returns; pressure to buy quickly before "missing out."

The Rule: No legitimate investment tip comes from a random Telegram or WhatsApp group. If someone is giving you "free" investment advice, they're profiting from your investment — not yours.

You've already been scammed. You're desperate to recover your money. You find a company online that claims to specialise in recovering lost crypto. They ask for an upfront fee. You pay. They take your money and disappear — or keep asking for more fees.

The Rule: Crypto recovery services are almost always scams. Once crypto is gone, it is almost impossible to recover. Report the original scam to the ACCC (Scamwatch) and your bank, but do not pay anyone to recover it.

You're invited to an exclusive club or program that offers amazing returns on a crypto "product" — like a mining package or a trading bot. The main way you make money, however, is by recruiting other people to join and buy the same package. Your commission comes from their joining fee.

What it Looks Like: A neighbour invites you to a seminar at a local hotel. The speakers are slick and talk about "financial freedom." Everyone is excited and positive. They show you a complicated chart of how you can earn money by building your "downline."

Analogy: This is the Tupperware party of the scam world. The product itself doesn't really matter; the business is all about recruiting more salespeople under you.

Red Flags: Emphasis on recruiting; complex commission structures; pressure to buy in quickly; vague or unverifiable product claims.

You have a problem with your crypto account and ask for help online. A scammer, pretending to be from the company's support team, sends you a private message. They say they need you to "verify your wallet" or "sync your assets" by entering your secret 12-word recovery phrase on a special website.

What it Looks Like: A direct message on Facebook from an account with the logo of your crypto exchange. The message is helpful and professional: "To resolve this issue, please go to [fake-website-link] and re-authenticate your wallet."

Analogy: This is like someone calling you, pretending to be from your bank, and saying they need your PIN to fix a problem with your account. A real bank would never ask for your PIN, and a real crypto company will never ask for your recovery phrase.

The Rule: Your 12-word secret recovery phrase is the master key to your entire crypto wallet. Never share it with anyone, ever, for any reason.

Scammers use Artificial Intelligence (AI) to perfectly clone the voice or appearance of someone you know and trust. You get a phone call, and it sounds exactly like your son or daughter. They are in trouble — a car accident, a legal problem — and they need you to send them money right away in crypto.

What it Looks Like: A video call from a work colleague asking you to make an urgent payment to a new supplier. It looks and sounds exactly like them, but it's a deepfake generated by AI.

Analogy: This is the ultimate impersonation. It's no longer just a stranger pretending to be someone; it's a computer program that can perfectly mimic a person you know and love.

The Rule: If you receive an urgent, unexpected request for money — even from someone you know — hang up and call them back on a number you already have saved. Verify before you act.

A new cryptocurrency project launches with a flashy website, a whitepaper, social media buzz, and promises of revolutionary technology. Early investors pour in money. The token price rises. Then the developers suddenly sell all their holdings, drain the liquidity pool, and disappear — leaving investors with worthless tokens.

Red Flags: Anonymous team; no audited smart contract; unrealistic promises; no working product; pressure to invest before "it's too late."

The Rule: Stick to established, proven cryptocurrencies (Bitcoin, Ethereum) and tokenized real-world assets. Avoid new, unproven tokens — especially those promoted on social media.