Learn to recognize common scams and make cryptocurrency transfers safely
If you suspect a scam, you can always contact our customer service regarding the situation. We are happy to provide our opinion on whether it is a scam or a genuine service. We aim to create a secure environment for investing in cryptocurrencies.
Various online scams have unfortunately become much more common recently. Limited knowledge of cryptocurrencies and the fast and irreversible nature of cryptocurrency transfers attract scammers to use cryptocurrencies for money transfers.
We have listed some basic guidelines in this article to help you distinguish a reputable service provider from a scam, as well as examples of typical scams. By identifying different types of scams and signs of dishonest services, you can avoid potential scams from the outset.
The following signs likely indicate a scam:
- The service promises guaranteed and typically quick returns.
- You are claimed to own cryptocurrencies in a service, and a processing fee, often between 250 to 1000 euros, is requested to redeem them.
- Money transfers are urgent or have an unreasonably tight deadline.
- There is no background information available on the service provider in company search services or Google.
- The service lacks terms of use and the provider’s contact information.
- Contact is made via social media.
Note! Coinmotion never contacts customers via text messages or social media (e.g., Telegram, WhatsApp, Facebook), nor do we discuss asset-related matters outside of the Coinmotion account.
Signs of a Genuine Investment Service Provider:
- The service includes customer service information for making contact.
- Company information can be found in public business registries.
- Terms of use and details on handling customer information are available on the service’s website.
- Genuine customer experiences can be found by Googling the service’s name
Below, we have listed seven examples of typical virtual currency scams. There are countless different scams, and scammers continuously develop new ways to acquire their victims’ funds.
However, the same characteristics and features, as previously listed, often recur in cryptocurrency scams. By recognizing these, you can identify a virtual currency scam right from the beginning or at least approach the matter skeptically and investigate the fraud more thoroughly.
Examples of Typical Scams:
Scams Using Coinmotion’s Name
It is possible for scammers to pose as reputable service providers, like Coinmotion, and approach people through social media or messaging apps, such as WhatsApp or Telegram.
Unfortunately, we have seen cases where scammers posing as Coinmotion employees have approached our customers via instant messaging apps, instructing them to send cryptocurrencies to the scammers' personal crypto wallets for purposes such as paying taxes or gaining access to fake Coinmotion account funds.
Additionally, we have detected fake Coinmotion profiles created by scammers on Facebook, claiming that Coinmotion customers have won free bitcoins and in return asking for payment, login credentials or customer's personal information. Please avoid such announcements altogether.
Coinmotion will never contact customers through text messages, messaging apps like Telegram or WhatsApp, or social media. We discuss asset-related matters only through the Coinmotion account.
All Coinmotion email addresses end with @coinmotion.com.
Investment Scams
Scammers producing investment scams find their victims in various ways. A typical method is to approach victims through various social media messaging channels, such as Facebook Messenger, WhatsApp, or Telegram, posing as investment advisors offering lucrative investment opportunities or advice.
Scammers aim to spark the victim’s interest and gain their trust by talking about the potential returns, low risk, and previous successes of the offered service.
Scammers may demonstrate significant profits by sending fake screenshots of a portfolio view with a substantial cryptocurrency balance or sharing a receiving address of a cryptocurrency wallet for the victim to view its assets but not transfer them.
Once trust is gained, scammers ask the victim to send cryptocurrencies to their wallets, promising to "invest" on the victim's behalf. Often, scammers claim the initial investment has yielded substantial profits, thereby encouraging the victim to invest more. Upon acquiring enough funds, the "investment advisors" disappear with the cryptocurrencies, and the victim never sees their money again.
Activation Fees for Crypto Wallets
Another common scam involves various crypto payments that scammers claim are necessary for the customer to access their owned cryptocurrencies. Scammers often approach customers through different messaging channels, posing as service providers holding a significant amount of the victim’s cryptocurrencies.
Scammers can present multiple reasons for the necessity of the payment to access the account funds. Common reasons used by scammers include covering the transfer fee for the cryptocurrency, paying taxes on the profits generated by the cryptocurrencies, resolving a money laundering suspicion with a payment, or paying an activation fee to open the account.
There are many reasons. It is important to remember that no honest virtual currency service provider will ask for a separate payment to allow access to your cryptocurrencies.
Second Round Scams
Particularly unfortunate scam cases are so-called second-round scams, where a person who has already been scammed is approached by another seemingly different entity offering to help recover the stolen funds. Contact may occur months or even years after the initial scam.
This seemingly different entity is aware of the previous scam because it is a scammer from the same dishonest network. They build a trust relationship with the victim and promise access to the previously stolen funds. At some point, the victim is again asked to make money transfers for various reasons, such as taxes, usage fees, service fees, or customs duties. In reality, the transfers once again go to the scammers' own wallets.
Romance Scam
In a romance scam, the scammer pretends to have a romantic interest in the victim with the aim of gaining their trust and eventually their money. Scammers often create credible profiles on social media or dating sites and may spend a lot of time, even months or a year, building an emotional bond with the victim. Eventually, they present a financial request often involving an emergency or investment opportunity, such as cryptocurrencies. It is important to be cautious and skeptical of unexpected financial requests, especially if they come from someone you have never met in person.
Chat Group Scams
A relatively new scam in Finland observed in messaging apps involves criminals creating fake chat groups full of dummy accounts to obtain their victims' money. These groups have members who speak fluent Finnish and use stolen names and profile pictures to make the groups appear convincing. The phone numbers are also made to look Finnish.
Scammers create, for example, a WhatsApp group and add the victim along with many dummy accounts. The dummy accounts engage in conversation in the group, giving the impression that the group is active and trustworthy. Some members ask for tips, while others praise recommended investment opportunities. The goal is to have the victim transfer money to accounts controlled by criminals or enter credit card details on fake websites. Often, the scam targets a fictional investment opportunity.
If you are suddenly added to such a group, the easiest solution is to leave the group immediately and block group invitations from unknown numbers in the messaging app settings.
Ponzi Scam
A Ponzi scam is a type of fraud in which funds obtained from new investors are used to pay returns to earlier investors. A well-known Ponzi scam in Finland is WinCapita, where new investors were attracted by advertising significant profit opportunities, but it was actually a pyramid scheme that survived only by continuously recruiting more and more investors to cover rising costs. Eventually, Ponzi scams collapse when the founders disappear with the money, and the flow of new investors dries up, leaving the majority of investors empty-handed.
Similar scams are unfortunately common in the virtual currency environment, and it is good to recognize them. Ponzi scams typically promise unrealistically high and almost risk-free returns in a short period and encourage investors to promote the investment opportunity to their acquaintances and close contacts.
How to Avoid Online Scams
Scams are unfortunately common, but you can avoid them by recognizing the most typical scams and the most common warning signs. Anyone can be scammed. Modern scams are very sophisticated, and one cannot avoid them through prior investing experience or a higher education degree.
Checklist for recognizing scams:
- If you have even the slightest suspicion about a requested money transfer, stop and think and ask for a second opinion from someone you know or our customer service. Money transfers should never be urgently necessary - it is one of the most common warning signs - you always have the opportunity to take a few days to consider the matter.
- If something seems too good to be true, it almost never is true. This especially applies to advertisements circulating on social media about lavish investment opportunities.
- Approach messages and calls from unknown sources with caution. Do not download files from unfamiliar messages. Verify the identity of the caller or message sender by contacting the customer service of the relevant entity.
- Only fraudsters ask for your bank account or login information over the phone or through messaging.Do not disclose them to anyone who requests them over the phone or through messaging.
- Do not install remote access programs, such as Anydesk or Remote Desktop, on your computer or phone.
Tips for Reducing Harassment by Scammers
- Never enter your email address on suspicious sites or open or respond to spam emails.
- Mark spam emails as junk, so your email system can better classify similar messages as junk in the future.
- Block annoying phone calls. If the calls do not stop, consider changing your phone number.
Remember, you can always contact our customer service if you suspect a possible scam. We are happy to assist you in clarifying the situation and potentially advising on further actions.
Police of Finland: Think twice and avoid online scams