Crypto Remittance Scams: What They Are and How to Avoid Them

Sending crypto to receive crypto? That doesn’t sound right! In this article, learn about remittance scams and how to recognise them.

Sep 01, 2023
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What Are Remittance Scams

Key Takeaways: 

  • Remittance scams are fraudulent schemes in which scammers deceive individuals into sending money under the promise of receiving a larger sum of crypto or fiat currency in return.
  • Characteristics of remittance scams include promising significant amounts of crypto, requiring an upfront fee for processing or taxes, inventing reasons for additional payments, and disappearing after receiving payments.
  • Be wary of offers that seem too good to be true and verify them through official channels before taking action.
  • Stay informed about current scams and fraud tactics to beat the scammers.

What Is a Scam?

A scam is a fraudulent or deceptive scheme designed to trick individuals into giving away their money, personal information, and/or other valuable assets. Scammers use various tactics and strategies to manipulate their victims into believing they are dealing with a legitimate opportunity, service, or product, when in reality, their intentions are dishonest and malicious.

Scams take many forms, such as fake investment opportunities, phishing emails, pyramid schemes, identity theft, lottery scams, romance scams, and more. They often exploit psychological triggers like urgency, fear, greed, or a desire for gain to manipulate victims into taking actions that benefit the scammer. 

To protect oneself from scams, it’s important to be cautious and sceptical when encountering unsolicited offers, requests for personal information, or deals that seem too good to be true. In this article, learn the basics of how to recognise so-called remittance scams, and how to avoid this type of crypto scam.

What Are Remittance Scams?

A remittance scam, also known as a money transfer scam or advance fee fraud, involves tricking individuals into sending money to scammers under the pretense of receiving a larger sum in return. These scams often exploit people’s FOMO (‘fear of missing out’) and desire for financial opportunities. While these scams have been around for a long time, using fiat currency and bank accounts, they have made their way into the crypto space.

Recognising Remittance Scams

Remittance scams take various forms, but they typically share certain characteristics:

  • Promising a Large Sum of Crypto: Scammers contact individuals and typically promise them a significant amount of crypto or fiat money.

  • Advanced Fee Requirement: To claim the promised sum, the victim may be informed they need to pay various fees, taxes, or processing costs up front by sending the amount in crypto to the scammer’s wallet. The scammers tend to create a sense of urgency to convince the victim to send the money quickly.

  • Fake Documents: Scammers might provide fake documents, such as official-looking certificates or wallet balances, to lend credibility to their claims.

  • Impersonation: Scammers often pose as officials, lawyers, bankers, crypto exchange staff, or relatives of the victim. They may use fake email addresses and social media profiles that are similar to legitimate ones to create a convincing persona. Clues to this scam may involve spelling mistakes or unusual email domains.

  • A String of Requests: Once the victim pays the initial fee, scammers may continue to invent new reasons for additional payments, claiming legal hurdles, unexpected expenses, or complications that need to be resolved before sending the promised funds to the victim’s wallet.

  • Ghosting: After receiving payments, scammers often disappear, cutting off communication with the victim and leaving them without the promised funds.

  • Emotional Manipulation: Some remittance scams involve creating emotional stories or exploiting personal vulnerabilities to gain the victim’s sympathy and trust (e.g., claiming that funds are needed for a family member’s life-saving medical treatment).

Check out how to recognise phishing attempts — with real-life examples.

How to Avoid Falling for a Remittance Scam

It’s important to be cautious and sceptical when receiving unsolicited offers of large sums of crypto, especially when they involve sending crypto up front to an unknown wallet. Legitimate organisations or institutions typically do not require individuals to pay upfront fees in order to receive funds. 

To avoid falling victim to remittance scams:

  • Never Send Crypto Up Front: Be cautious about sending crypto to unknown parties, especially if it’s required as an upfront fee.
  • Always Verify Claims: Independently verify any claims or offers through trusted sources. Don’t rely solely on information provided by the potential scammer.
  • Check Identities: Verify the identity of individuals, especially if they claim to be officials, lawyers, or family members. Use official contact information from reputable sources. For example, if a user receives communications from Crypto.com that appear dubious, they should not hesitate to contact Crypto.com Customer Service with a screenshot of the request.
  • Be Sceptical: If an offer sounds too good to be true or involves significant financial gain with minimal effort, it’s likely a scam.
  • Stay Informed: Stay updated about common scams and fraud tactics to recognise and avoid them.
  • Report Suspicious Activity: If a person suspects they are being targeted by a remittance scam or any other type of fraud, they should report it to relevant authorities or consumer protection agencies. For example, with Crypto.com, contact Crypto.com Customer Service.

Remember, scammers often employ psychological tactics and emotional manipulation to prey on individuals’ vulnerabilities. Anything that puts the target under pressure to act immediately is a red flag. Staying informed, practicing scepticism, and verifying information are crucial steps to protection from remittance scams and other fraudulent schemes.

Read our 101 on security and best practices with Crypto.com.

Conclusion

By maintaining a cautious approach, individuals can empower themselves to navigate the crypto landscape more safely. Remember that responsible crypto trading requires patience, research, and a commitment to staying informed. In doing so, users can minimise the risk of scams.

Due Diligence and Do Your Own Research

All examples listed in this article are for informational purposes only. You should not construe any such information or other material as legal, tax, investment, financial, cybersecurity, or other advice. Nothing contained herein shall constitute a solicitation, recommendation, endorsement, or offer by Crypto.com to invest, buy, or sell any coins, tokens, or other crypto assets. Returns on the buying and selling of crypto assets may be subject to tax, including capital gains tax, in your jurisdiction. Any descriptions of Crypto.com products or features are merely for illustrative purposes and do not constitute an endorsement, invitation, or solicitation.

Past performance is not a guarantee or predictor of future performance. The value of crypto assets can increase or decrease, and you could lose all or a substantial amount of your purchase price. When assessing a crypto asset, it’s essential for you to do your research and due diligence to make the best possible judgement, as any purchases shall be your sole responsibility.

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