The Top 5 Crypto Scams to Avoid This Holiday Season

The holiday season brings cheer, family gatherings, and, unfortunately, a significant spike in financial scams. As digital assets become more mainstream, so do the sophisticated methods criminals use to steal them.

This year, holiday crypto scams are expected to be more prevalent than ever. Investors in tech-savvy hubs like the San Francisco Bay Area and Los Angeles are prime targets.

At Kugelman Law, we’ve seen the devastating aftermath of these schemes. To protect your portfolio, we’ve compiled a list of the top five crypto scams to watch out for this holiday season.

1. Phishing Scams via Email and SMS

Phishing remains one of the most common and effective tactics. Scammers send emails or text messages that appear to be from legitimate sources like Coinbase, MetaMask, or Ledger. These messages often create a sense of urgency, claiming your account is compromised or that you need to verify your identity.

How to Avoid It: NEVER click on links or download attachments from unsolicited emails or texts. Instead of clicking a link, go directly to the official website by typing the URL into your browser. Legitimate companies will never ask for your private keys or seed phrase. Be wary of any message that demands immediate action.

2. Fake Giveaways and Celebrity Endorsements

You’ve likely seen them on social media: a post from a well-known tech personality or celebrity promising to double any amount of crypto you send to their wallet. These are classic cryptocurrency giveaway scams. They use deepfake videos or hacked, verified accounts to appear legitimate.

How to Avoid It: If it sounds too good to be true, it is. No legitimate person or company will ask you to send them crypto with the promise of sending more back. Report these accounts and posts immediately. Always approach giveaways with extreme skepticism.

3. “Pig Butchering” and Romance Scams

This elaborate and cruel scam has exploded in popularity. The name “Pig Butchering” refers to how scammers “fatten up” their victims with false promises before taking everything. The scammer builds a long-term relationship with the target, often a romantic one, over weeks or months. They eventually introduce a “guaranteed” crypto investment opportunity, guiding the victim to invest on a fraudulent platform they control.

How to Avoid It: Be extremely cautious of anyone you meet online who quickly pivots the conversation to crypto investing. Never take investment advice from someone you’ve never met in person. If they pressure you to invest on an unfamiliar platform, it’s a major red flag for a crypto investment fraud.

4. Malicious DApps and NFT Scams

The world of decentralized applications (DApps) and NFTs is exciting but also a wild west for security. Scammers create malicious DApps or airdrop fake NFTs into your wallet. When you interact with the DApp or attempt to sell the NFT, you unknowingly sign a transaction that grants the scammer permission to drain your wallet of all its assets.

How to Avoid It: Do not interact with DApps you don’t trust. Be highly suspicious of any free NFTs that appear in your wallet from an unknown source. Use a “burner” wallet with limited funds for interacting with new or unverified DApps.

5. SIM Swap Attacks

A SIM swap is when a scammer convinces your mobile carrier to transfer your phone number to a new SIM card they control. Once they have your number, they can bypass two-factor authentication (2FA) for your email and crypto exchange accounts, reset your passwords, and gain full access to your funds.

How to Avoid It: Use a more secure 2FA method than SMS, such as an authenticator app (Google Authenticator, Authy) or a physical security key (YubiKey). Contact your mobile carrier and add a PIN or password to your account for extra security.

What to Do If You’ve Been Scammed

If you believe you’re a victim of a crypto scam, time is of the essence. Contact a crypto scam lawyer in California immediately. The tax and crypto attorneys at Kugelman Law can work with crypto scam victims for their tax reporting needs. Protecting your assets starts with vigilance. Stay safe this holiday season!

Disclaimer: This blog post is for informational purposes only and does not constitute legal advice. If you believe you have been a victim of a scam, please consult with a qualified legal professional.