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4 Ways to Protect your Business from Cryptocurrency Fraud

According to a Coindesk report, Crypto Investment Scam Losses in the U.S. Grew 53% to $3.94B in 2023: Overall, investment fraud grew by 38% to $4.57 billion from $3.31 billion, with crypto being the largest type of scam.

These shocking numbers highlight the growing threat of crypto fraud and the dire need for businesses to protect themselves. The impact of such scams can be devastating, leading to significant financial losses and reputational damage.

To help businesses navigate these burning challenges, experts at Speed have outlined four essential strategies for protecting your business from cryptocurrency fraud.

What is a cryptocurrency fraud?

Cryptocurrency fraud typically involves either illegitimately gaining cryptocurrency through deception or creating fake crypto products to solicit dishonest investments.

Due to the nature of blockchain technology, recovering from such fraud is challenging. Altering transactions requires consent from most network users, and any forced changes can be reverted. 

These characteristics make blockchain technology secure but also complicate the recovery of stolen funds. Once a fraudulent transaction is recorded, reversing it without broad network consensus is nearly impossible, leaving victims with few options for recourse.

5 Crypto scams targeting businesses

The significant financial transactions associated with cryptocurrencies make them prime targets for scammers. Various online fraud tactics exist within the crypto sphere, ranging from direct attacks on users to deceptive practices targeting cryptocurrency services.

Let us take a look at some of them-

Investment Scams

Watch out for fake investment offers in the crypto world. Scammers might ask you to visit a website or give them money directly. They could pretend to be someone else or combine different scams to trick you.

Two common scams are “exit scams” and “rug pulls.” In an exit scam, a company raises money but disappears without delivering anything. In a rug pull, a new coin is promoted, but once people invest, the developers vanish, leaving investors with worthless coins.

Be careful of traditional scams like Ponzi schemes, too. And don’t trust people who only promote projects for their own profit. Sometimes, even innocent people unknowingly spread scams they fell for.

Giveaway Scams

Exploiting the popularity of cryptocurrencies, scammers have devised giveaway schemes leveraging the online presence of prominent individuals. They often pretend as celebrities or influential figures, fabricating social media profiles with photos and biographies.

Under the guise of a generous gesture, these scammers claim to offer cryptocurrency tokens as giveaways. However, participation requires sending them a sum of money upfront, with the promise of receiving a larger amount in return. Sadly, once the payment is made, the scammers vanish, leaving victims empty-handed and defrauded of their funds.


Phishing is a common scam where fraudsters try to obtain your personal details or cryptocurrency information through deceptive means. They often pose as legitimate entities and contact you via phone, email, or social media.

For instance, let’s say your business is active on a cryptocurrency forum seeking advice. A scammer might pose as a knowledgeable trader offering assistance. They could request your login credentials or ask you to install software, claiming it’s necessary for troubleshooting. In reality, they aim to steal your assets once they gain access.

Always be cautious and verify the authenticity of any communication, especially when it involves sensitive information or financial matters.

Fake Websites

Be cautious of cybercriminals who craft counterfeit websites and apps, often with names strikingly similar to reputable cryptocurrency platforms.

If you unintentionally interact with these deceptive sites and provide personal or account details, you risk identity theft or cryptocurrency loss. Moreover, there’s a chance you could unknowingly transfer your digital assets directly to the scammers’ wallets by using these fraudulent services. Stay alert to avoid falling victim to such ploys.

Other common scams

Many scams leverage cryptocurrencies as a means to extract money from victims, regardless of whether they’re specifically targeting cryptocurrency investors. These scams are widespread and can include:

Employment scams

Scammers offer job opportunities but require payment for training, software, or other products upfront.

Marketplace scams

Victims are asked to send cryptocurrency as payment for items purchased through online marketplaces.

Romance scams

Individuals establish personal relationships with victims, either romantically or platonically, and eventually request money.

Regardless of the initial approach, the ultimate goal is to persuade victims to send cryptocurrency payments. In some instances, scammers prolong the scam, asking for more money over an extended period before ceasing communication.

Why do fraudsters target crypto for scams?

Cryptocurrencies, while innovative and convenient, come with unique risks that scammers are quick to exploit. Understanding these vulnerabilities can help you stay protected in the digital financial world.

Digital Nature

Cryptocurrencies exist entirely online, making them prone to cyber-attacks. Fraudsters can easily launch phishing or hacking attempts using just a computer.

Non-Reversible Transactions

Once a cryptocurrency transaction is made, it cannot be undone except by the recipient. If a scammer gains control of an account and transfers funds, recovering those funds is nearly impossible.


The decentralized structure of cryptocurrencies means there is no central authority to mediate disputes. This setup, combined with the concentration of ownership among a few, can lead to mistrust among users.


Cryptocurrencies offer a level of anonymity since they require minimal personal information for transactions. While blockchain can track these transactions, fraudsters often use multiple wallets to obscure their identities, making it challenging to trace them.

These characteristics create opportunities for scammers to exploit unsuspecting users.

How to protect your business from crypto scams?

Organizations, especially businesses that use cryptocurrency as a payment method, must stay alert bout the associated risks. Key concerns include securely storing and managing customers’ cryptocurrency and monitoring transactions for suspicious activity.

Detailed analysis before handling crypto transactions

Thorough research is essential before engaging with any cryptocurrency. Legitimate cryptocurrencies typically provide comprehensive white papers detailing their blockchain technology and intended use. These documents often include information about the developers and contributors, with links to open-source code repositories. 

In contrast, fraudulent cryptocurrencies usually lack detailed explanations, emphasizing potential monetary gains over the technical and functional aspects of the blockchain. By focusing on these white papers, organizations can better discern legitimate projects from scams.

Find the right payment processor

The method you choose to accept cryptocurrency payments should cater to your business’s specific needs. For example, physical stores can greatly benefit from implementing QR code payments. With this system, customers can easily scan a QR code at the checkout that links directly to the store’s cryptocurrency wallet. 

Choosing a trustworthy crypto payment processor is crucial for smoothly converting your cryptocurrency earnings into fiat money. 

One outstanding option is Speed, a leading payment processor that provides seamless crypto transactions and efficient conversion to fiat currency. Speed’s platform is tailored to diverse business needs, offering a reliable and swift solution for integrating cryptocurrency payments.

Secure your Business with Speed!

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Choose a reliable cryptocurrency exchange

It’s essential to do some preliminary research to avoid fraudulent cryptocurrency exchanges. Exchanges that are widely used and respected within the crypto community have often earned their reputation through robust security measures and excellent customer service. 

For example, popular platforms like Coinbase and Binance are trusted by many users because of their strong security protocols and track record of handling customer issues effectively. Before committing to an exchange, always check reviews and community feedback to ensure you’re choosing a reliable and secure platform.

Implement identity verification in crypto transactions

Implementing identity verification measures, such as KYC, KYB, and KYT processes, is crucial for safeguarding against fraudulent activity in crypto transactions. By gathering information about customers and their typical crypto activities, organizations can better detect suspicious behavior. 

However, it’s important to adopt a risk-based approach to onboarding and transaction monitoring. While comprehensive identity verification enhances security, excessive friction in the verification process may drive crypto users away.

Educate staff and customers on Crypto fraud

Educating your staff and customers about cryptocurrency fraud is crucial for protecting your business. Use your marketing channels to raise awareness among customers, such as including reminders in email communications. 

For instance, advise customers not to click on links from unexpected texts, emails, or social media messages, even if they seem to come from your business. For your staff, incorporate cryptocurrency fraud awareness into their training programs and regularly update them on the latest developments in the field. This comprehensive approach ensures everyone is informed and vigilant against potential scams.

4 Steps to report & combat crypto scams

If you fall victim to a crypto scam, it’s essential to report it immediately to:

Law Enforcement: Local police can investigate and act against scams within your area.

Federal Authorities: In the U.S., agencies like the Federal Trade Commission (FTC) and the Federal Bureau of Investigation (FBI) handle such cases.

Financial Regulators: Many countries have financial regulatory bodies that oversee and investigate fraudulent activities, including those involving cryptocurrencies.

Social Media Platforms: If you encounter scams on sites like Facebook or Twitter, report them directly on the platform.

When reporting, include as many details as possible, such as the nature of the scam, the people or organizations involved, and any communications you’ve had (e.g., emails, messages, screenshots, transaction records).

Reporting scams is vital for fighting cryptocurrency fraud, protecting others, and possibly recovering lost funds. Additionally, spreading awareness about these risks can help prevent future incidents of crypto fraud.

Safeguard your Bitcoin with Speed!

The rise of cryptocurrency has brought a surge in fraudulent activities. Implementing a comprehensive security strategy is essential for mitigating these risks. 

Start by conducting thorough research before engaging with any cryptocurrency, and choose reliable payment processors like Speed to handle transactions. 

Staying informed and secure requires diligence and the right strategies. As the battle against cryptocurrency fraud continues, businesses equipped with these tools can navigate the challenges effectively and safeguard their digital assets.

Contact us and secure your business from crypto frauds.

Speed Team