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How to Identify Cryptocurrency Scams And Avoid Falling for Them
By Jide Williams,
The number of cryptocurrencies on the market is on a steady rise. Every year, dozens of new cryptocurrencies enter the market and these are often followed by a series of Initial Coin Offerings (ICOs) (Source), which are a major source of funding for new cryptocurrency projects.
Unfortunately, there are many potential pitfalls laying ambush for new and even more experienced investors. The rabid rave around cryptocurrencies, especially fueled by the false notion that cryptocurrencies are an avenue to get rich quickly, has made many people susceptible to cryptocurrency scams.
Many people have made a lot of money from cryptocurrencies. But cryptocurrencies are by no means a get-rich-quick scheme. There is a significant amount of profit to be made in cryptocurrency, but losses also exist. Knowing the real deal from the cubic zirconias can be the difference between gaining and losing.
Before investing in cryptocurrencies, it is important to know exactly what to look out for. While some cryptocurrency scams are so well-thought-out that it is hard to spot them, many are sloppy and the telltale signs are always there. This article explores both the glaring and the less obvious signs of a cryptocurrency scam.
Types of Scams
Cryptocurrency scams come in different forms. The most common types of cryptocurrency scams are:
Bogus ICOs
A 2017 study revealed that over 80% of ICOs were fraudulent, Centra being one of the most well-known ones. This project raised about $32 million and was endorsed by DJ Khaled. Centra turned out to be a scam and the founders were arrested. One of the telltale signs of a bogus ICO is that the promised rewards are often too good to be true. In the case of Centra, investors would join the Centra ICO telegram group and get contacted by someone who appears to be the administrator. Investors would then get offered private bonuses for sale, sometimes receiving offers to buy the token at a third of its current value.
Once an investor falls for the trick and sends the money (usually in cryptocurrency) to the “special address” they are given, the scammers vanish.
Cloud Mining Scams
Because mining cryptocurrencies often requires copious amounts of processing power and electricity, which many people do not have access to, the option of cloud mining exists to expand inclusivity in cryptocurrency mining. Scammers recognise that this is a viable market and have infiltrated the cloud mining space as well.
MiningMax was a fraudulent cloud mining service. It offered daily returns on investments of $3,200 to investors, with a $200 referral bonus for investors who bring other investors on board. This company ran for two years, and in that time, duped investors of roughly $250 million.
Clone Websites
Some scammers go to the lengths of creating fake websites that are strikingly similar to the original website they intend to replicate. These replica websites are often so well done that a cursory glance through them will not reveal their dubious nature to the average eye.
These clone sites are often created in an attempt to carry out an act called phishing. Unsuspecting visitors who visit these phishing sites would unwittingly give out sensitive information about themselves like their wallet seed or key phrases, or passcodes to these attackers.
These phishing sites are usually registered under domain names similar to the original site as well. For example, using an “m” in the place of an “n,” a “0” in the place of an “o,” etc. Always double check the URL of websites that you are not entirely familiar or comfortable with before saving any sensitive information on such sites.
Cryptocurrency Ponzis
Before cryptocurrencies even existed, Ponzi schemes had been a common fraudulent tactic. As cryptocurrencies gained mainstream popularity, scammers capitalised on the public interest to set up cryptocurrency Ponzi schemes. These work like regular Ponzi schemes, but with cryptocurrencies as the medium of exchange rather than fiat currency.
Bitconnect is perhaps the most notorious cryptocurrency Ponzi scheme. It lasted for over a year and had a market cap of $2 billion. On the day the scheme fell apart, its unit value dropped from $320 to $6 in less than 24 hours, and its market cap to $40 million (Source).
Three men were arrested last year, in 2019, for defrauding investors of $722 million. They ran a Ponzi scheme named BitClub Network for years.
Fake Cryptocurrencies
Some scammers sell the idea that it is too late to cash in on Bitcoin to investors and try to convince them to invest in a new fast-rising cryptocurrency (a fake one) instead. One notable instance of this happening was with a fake cryptocurrency called My Big Coin. Fraudsters robbed investors of over $6 million via this scheme before they were finally caught and shut down.
Fake cryptocurrency projects would usually set up an ICO and convince investors to buy these tokens at a pre-sale price with promises of exponential rewards upon its launch. Investors put their money into these coins and the team behind the projects vanishes, never to be seen again.
Pump-and-Dumps
If you’re into traditional investing (i.e. investing in the stock market), then you may be familiar with pump-and-dump schemes. In the golden years of the stock market (think Jordan Belfort from the Wolf of Wall Street times), a group of scammers would pool money to buy penny stocks (low-quality stocks), thereby driving the prices of these stocks up. Investors are then encouraged to invest in these seemingly fast-rising stocks with promises of easy big-money returns. These stocks eventually turn out to be worthless and investors lose a lot of money in the process.
Scammers have been clever enough to apply the same principle to cryptocurrency trading. These scams are often hidden behind a facade of legitimacy with fake celebrity endorsements and fake news articles.
How To Avoid Falling For Cryptocurrency Scams
The importance of knowing how to spot and void cryptocurrency scams cannot be overemphasised. Below are some precautions you should take to minimise your chances of getting scammed.
Know the Team
Every industry has its superstars. Hollywood has Angelina Jolie and Denzel Washington, and a song from Beyonce is likely to pique your interest. In the same way, there are known names in the cryptocurrency industry. Before investing in any cryptocurrency, be sure to research the individual team members thoroughly.
One of such figures is Vitalik Buterin, the creator of Ethereum, which is the second most valuable cryptocurrency in the world. He is one of the most well-known figures in the world of cryptocurrency and has been actively involved in the industry for ten years.
Try to find out who the names listed on a cryptocurrency project are, and check the names listed on platforms like LinkedIn and other social media to vet their legitimacy. Check their followers, their posts, and how well they engage and interact with their followers. Many scammers make up fake founders and even create fake social media pages for them. Check when these accounts were created and how active they are.’
Peruse the Whitepaper
A whitepaper is an official document that details the strategies, goals, and timeline for a cryptocurrency project. Whitepapers are supposed to be incredibly detailed and include information like the financial model of the project, the legal concerns, SWOT analysis, and an implementation roadmap (Source).
Read whitepapers thoroughly. The real juice about a cryptocurrency project is in its whitepaper and you would be doing yourself a disservice if you only skim through it.
There have been rare cases where a fraudulent cryptocurrency project presented a whitepaper that was so good, they were able to pull in millions of dollars in investments. This was the case with PlexCoin. The company had raised over $15 million in investments before the scam was unravelled and the United States Securities and Exchange Commission (SEC) had to step in and close it down.
Monitor the Initial Coin Offering
Also known as the token sale, the ICO drives the initial crowdfunding process on a new cryptocurrency project. A legitimate company will make its token sale process transparent, such that investors can monitor its progress (Source).
Any establishment that is being coy about its token sales should not be trusted. Some fraudulent companies hide the progress of their token sale under the pretext of individual funding addresses. Under such circumstances, it becomes impossible for potential investors to track the progress of the token sale. If the amount a cryptocurrency project has raised and how much time is left on the sale isn’t visible to potential investors, that is a red flag, and you should avoid investing in such projects.
Look Before Leaping
The temptation to jump in on cryptocurrency projects with ambitions of getting rich quickly is pretty high. Even after reading through the whitepaper carefully, do not be quick to hop on a cryptocurrency project without doing your due diligence on all fronts.
A good place to start might be cryptocurrency and ICO spaces. These are popular on platforms like Reddit and Quora. Follow credible cryptocurrency accounts on social media and immerse yourself in the world of blockchain projects. And in all you do, ensure that you keep both your eyes peeled, not just for scams, but also for potential pitfalls inherent in projects before investing your money in them.
This brings me to my final point.
Evaluate the Project’s Feasibility
As a cryptocurrency investor, you need to know the markers to look out for when deciding what ICOs to take. This is why studying a project’s whitepaper like a manual is important. You need to understand what a project’s aims are and whether or not they are feasible (Source). Projects with overly-optimistic projections and shady timelines are best avoided. If it looks too good to be true, it probably is.
Final Thoughts
If you are going to invest in cryptocurrencies, it is imperative that you go into it equipped with as much knowledge as you can. There are many avenues to make profits from cryptocurrency trading, but there are also many ways to lose money. The more you know about the market and the latest trends and schemes, the less likely you are to get defrauded of your money. If you are patient, keep a cool head, have realistic expectations, and eschew greed, you significantly improve your chances of getting the most out of the good deals and you avoid falling prey to the bad ones.
Jide Williams, a Tech Professional with a Product Development Background
Clydestone Ghana Plc has filed a writ of summons and statement of claim against MTN Ghana, MTN Group Limited and Mobile Money Fintech Limited, alleging unauthorized use of its intellectual property.
The company announced the court action at the Ghana Stock Exchange, confirming proceedings in the Commercial Division of the High Court of Ghana.
The case relates to work commissioned in 2007 that Clydestone alleges was later used without authorisation or compensation.
Clydestone said the claim involves proprietary intellectual property, confidential commercial information and operational methodology developed during the engagement. The company is seeking declarations, damages and equitable remedies.
In a statement, Clydestone said MTN Ghana engaged it in 2007 to develop a commercial and operational framework for a mobile money business.
“The work was developed and delivered by the company’s founder and Group CEO, Paul Jacquaye, and included a full mobile money ecosystem covering the commercial model, operational architecture, implementation methodology and business case.”
Clydestone said the work was commissioned on the understanding that a non-disclosure agreement and memorandum of understanding would be signed.
It alleges these agreements were not finalised despite repeated requests.
The company further alleges MTN Ghana later used its proprietary work and methodology without authorisation or compensation, including in MTN Mobile Money Ghana and other markets.
Clydestone said the alleged use has continued since the launch of MTN Mobile Money Ghana in 2009.
“The wrongful use of that work has been ongoing since 2009. What has changed is the availability of independently verifiable information that documents its scale and commercial significance,” the company said.
It cited the GSMA State of the Industry Report on Mobile Money 2026 and MTN Ghana’s 2025 annual report as evidence of the platform’s scale.
According to Clydestone, the reports show approximately 19.3 million active users and annual revenue of about GHS 6.0 billion ($516m).
The company said it reviewed its records following these publications and concluded there were sufficient grounds to initiate legal proceedings.
It added that it has received no payment or acknowledgement for the work since December 2007, and that pre-action correspondence in 2026 received no substantive response.
“The Board of Directors has unanimously authorised the commencement of these proceedings,” the company said.
Jacquaye said: “This case is about accountability for commissioned intellectual property.
“When independent publications in 2025 and 2026 revealed the scale of the mobile money business, we reviewed all documentation relating to the original engagement and concluded these proceedings were necessary.”
MTN Group Limited, named as a defendant, had not commented at the time of publication.
National Information Technology Development Agency (NITDA) has reaffirmed its commitment to expanding digital inclusion through strategic partnerships aimed at equipping underserved communities with digital skills and access to technology.
Mr. Oladejo Olawunmi, Director, Digital Development Services representing the Director General of NITDA, and the Executive Director of Cal-Maji Foundation, alongside members of their respective delegations, pose for a group photograph following a strategic engagement on advancing digital literacy, capacity building, and digital inclusion for women, youth, and underserved communities.
Director-General of NITDA, Kashifu Inuwa, made the commitment during a courtesy visit by the Executive Director of Cal-Maji Foundation, Mrs Faith Ayuba, to the agency’s headquarters in Abuja.
Represented by the Director of Digital Development Services, Mr Oluwunmi Oladejo, Inuwa said collaboration with community-based organisations remained central to NITDA’s vision of ensuring that no Nigerian was left behind in the country’s digital transformation journey.
He noted that feedback from beneficiary communities demonstrated the long-term impact of the agency’s interventions across the country.
“It is always gratifying to receive feedback from communities that have benefited from our interventions.
“Many of these projects were implemented years ago, and it is rewarding to know they are still creating opportunities,” he said.
The NITDA boss explained that the agency continued to monitor the performance of its intervention centres nationwide while leveraging emerging technologies to enhance digital learning and virtual capacity-building.
According to him, the National Digital Literacy Framework remains the foundation of NITDA’s efforts to equip children, students, artisans, farmers, professionals and other groups with digital competencies needed in a technology-driven economy.
Responding to requests for additional support, Inuwa disclosed that the agency would consider training community-based instructors to sustain digital literacy initiatives at the grassroots.
He encouraged the foundation to submit a formal request, accompanied by evidence of activities at its digital centre, to facilitate further intervention.
The director-general, however, acknowledged that maintaining internet connectivity across numerous intervention centres nationwide remained a major funding challenge.
He stressed the need for innovative financing models and stronger collaboration to ensure the sustainability of digital inclusion projects.
Earlier, Ayuba commended NITDA for its openness to partnerships and its commitment to supporting initiatives that deliver measurable impact in underserved communities.
She described the agency as one of the few government institutions that prioritised impactful programmes over personal connections.
According to her, the Cal-Maji Foundation focuses on improving access to education, strengthening food systems, enhancing food security and providing social protection for women and young people, particularly in remote communities.
Ayuba said NITDA’s Knowledge Access Centre, established at the foundation’s community school in a border community in Kogi State, had significantly transformed learning by providing students and residents with access to computers, internet services and digital education.
“The ICT centre became an equaliser.
“Young people who ordinarily would never have had access to computers or the internet suddenly had the opportunity to acquire digital knowledge.
“We came back simply to say thank you because this partnership has changed lives,” she said.
She disclosed that more than 1,000 children had benefited from the foundation’s educational programmes.
Ayuba also presented a former student who progressed from the community school to a Nigerian university after utilising the digital resources available at the centre.
She described the student’s achievement as evidence of the enduring impact of the collaboration.
The foundation’s executive director appealed for deeper collaboration through the training of community instructors, upgrading of computer systems and expanded access to NITDA’s digital capacity-building programmes.
She stressed that rural communities must not be left behind as Nigeria advances in emerging technologies such as artificial intelligence, cybersecurity and digital innovation.
The meeting ended with both organisations reaffirming their commitment to strengthening collaboration to expand digital opportunities, promote inclusive technology adoption and support Nigeria’s digital economy agenda.
National Information Technology Development Agency (NITDA) has unveiled the National Software Quality Assurance (SQA) Framework to improve software quality, strengthen cybersecurity and enhance public confidence in Nigeria’s digital infrastructure and government services.
The framework, approved by the Director-General of NITDA, Kashifu Inuwa Abdullahi, under the provisions of the NITDA Act 2007, establishes national standards for the design, testing and deployment of software across Federal Government institutions, regulated industries and the broader digital ecosystem.
According to the agency, the initiative is aimed at reducing costly information technology failures, improving service delivery and ensuring that software powering critical national infrastructure meets globally accepted quality standards.
The framework comprises three regulatory instruments, namely the National Software Development Guideline, the National Software Testing Guideline and the Software Testing Organisations Licensing (STOL) Guideline.
NITDA explained that the National Software Development Guideline mandates structured software development processes, secure coding practices based on the Open Worldwide Application Security Project (OWASP), standardised system documentation and compliance with Web Content Accessibility Guidelines (WCAG) 2.1 AA for citizen-facing digital services.
The National Software Testing Guideline introduces mandatory testing benchmarks covering software functionality, cybersecurity, system performance under peak demand and interoperability before deployment.
Under the STOL Guideline, independent Licensed Software Testing Organisations (LSTOs) will be accredited and regulated to evaluate and certify software before it is deployed.
The agency stated that all Federal Government software projects would now be required to undergo independent third-party testing and obtain official certification before deployment.
It added that compliance with the framework would become a mandatory requirement for obtaining IT Project Clearance.
To strengthen risk management, the framework introduces a three-tier software classification model based on the criticality of systems.
Under the classification, Class A covers high-risk and critical national infrastructure such as core banking systems, national identity platforms and electricity grid control systems.
Class B applies to medium-risk enterprise platforms, while Class C covers lower-risk internal software applications.
NITDA said Class A systems would undergo more rigorous security assessments, including advanced penetration testing and specialised audits conducted by top-tier accredited software testing organisations.
The agency identified three major benefits of the framework.
It said the initiative would improve the reliability and security of digital public services, protect government investments from software failures and cyber threats, and enhance service delivery to citizens.
It also noted that regulating independent software testing would stimulate the growth of Nigeria’s software assurance industry, create employment opportunities for technology professionals and promote indigenous innovation.
According to NITDA, the framework will further strengthen international confidence in locally developed software, enabling Nigerian technology companies to compete more effectively in global markets and attract foreign investment.
Speaking on the development, Inuwa said quality remained fundamental to building trust in Nigeria’s digital economy.
“Quality is the foundation of digital trust.
“With this Framework, every software solution serving Nigerians, whether built for government or the private sector, will meet clear national standards for security, reliability and interoperability.
“This is how we modernise government technology and position Nigerian software to compete on the global stage,” he said.
The agency disclosed that the framework would take full effect in the second quarter of 2027.
It said the implementation period would include nationwide stakeholder engagement, capacity-building programmes and the accreditation of software testing organisations.
NITDA added that an Expression of Interest (EOI) would soon be issued to qualified organisations seeking licences to operate as independent software testing bodies under the new regulatory regime.
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