How to spot crypto scams: rug pulls, pump and dumps and fake giveaways
By SendPay Business · · 2 min read
Crypto payments are hard to reverse, which makes them a favourite of scammers. Most scams follow a few well-known patterns, and knowing them is the best protection.
Common scams
- Rug pull: the people behind a new coin or project take investors' money and disappear.
- Pump and dump: a group hypes a small coin to push its price up, then sells, leaving others with the loss.
- Fake giveaway: "send us 1 coin and get 2 back", often using a famous name or a hacked account.
- Romance or friendship scam: a new online contact slowly persuades someone to invest on a fake platform.
A real rug pull
In November 2021, a token named after the TV show Squid Game rose sharply in price, but buyers found they couldn't sell. Its creators then cashed out and vanished, and the price collapsed to almost nothing.
Warning signs
- Promised or guaranteed returns.
- Pressure to act fast or keep it secret.
- A coin or platform you can buy but can't sell or withdraw from.
- Anyone asking for your seed phrase or private key.
If you've been caught out
Stop sending money, contact your bank or exchange straight away, and report it to the police. Be wary of "recovery" services that contact you promising to get the money back: they are often scammers too.
Where SendPay fits
SendPay platforms let your customers buy, sell and hold crypto under your own brand, with assets held with regulated partners.
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This guide is general information, not legal or financial advice. SendPay Business is a technology company, not a bank, and does not take deposits; regulated services on the platforms are provided by licensed partners. PayPal, Patreon and Substack are named as reference points only and are not affiliated with SendPay Business.