Introduction
The world of crypto is unpredictable, and many people experience similar falls before they learn to protect themselves. Scammers prey on emotional and psychological weaknesses, manipulating greed, fear, and misplaced trust—tactics that affect everyone, even seasoned experts.
Why do people fall for these scams, and what psychological triggers lead them astray? By understanding how these schemes work, we can rise from each fall and be better prepared to protect ourselves from future threats.
FOMO — ‘It’s too good to be true’
Scammers can often establish a sense of immediate urgency around a seemingly lucrative opportunity before exploiting a victim’s fear of missing out (FOMO).
There is an interesting type of scam that preys on victims’ greed, tricking them into believing they can steal someone else’s money while, in reality, they end up sending their own money to scammers. It typically begins when the victim “accidentally” receives a message stating, “Your account has been created,” accompanied by a link to an exchange platform and login credentials. Out of curiosity, the victim logs in and discovers a substantial balance — let’s say $10,000 — sitting in the account.
Lured by the prospect of easy money and driven by greed, the victim tries to withdraw the funds. However, they are told there’s a withdrawal limit and that they need to top up the account with, say, $1,000 to unlock the full $11,000. After sending this money, they discover (or sometimes don’t) that the website is fake, and instead of gaining any funds, they have sent their own money to scammers, losing both the money they deposited and the fake funds they were hoping to withdraw.
Why we fall: The desire for opportunity, paired with FOMO, drives impulsive decisions that override caution, making even the most prudent individuals susceptible to greed and scams.
The trust trap — ‘Betrayal from within’
Fraudsters frequently take advantage of positions of authority and hide in plain sight to carry out their scams.
Take, for example, a company that decided to handle its own crypto payment processing in-house, relying on the expertise of its talented engineers. Confident in their ability to bypass expensive third-party services, they stored funds directly in a company wallet. Months later, a vigilant financial controller noticed something troubling: while ad sales had surged, the expected revenue was nowhere to be found.
An internal investigation revealed that a subtle tweak in the payment system had funneled millions in crypto to an unknown destination. Despite their best efforts, the company never recovered the lost funds — and never found out who was responsible.
Why we fall: We naturally trust those we are close to - like family, friends and colleagues. This gives us the sense that we would never be betrayed - a vulnerability that can easily be exploited.
The power disadvantage — ‘There is no other option’
Targeted exploitation is a common method used by scammers. They take advantage of their victims when they’re most financially or emotionally vulnerable — using desperation, greed or even hope against them. They use privileged information to strategically choose their victims, making this a form of calculated manipulation.
In a disturbing example of such exploitation, Russian-speaking ransomware gang REvil hackers specifically targeted companies insured against ransomware attacks. After infiltrating a US-based insurance firm, they accessed a list of clients covered for such incidents and deliberately went after those companies, knowing they were more likely to pay the ransom.
Why it worked: Power disadvantage. The scammers held full power, knowing their targets would rather pay up than allow their data to go public, which would have further expensive repercussions. There was simply no other option for the victims.
Picking ourselves up: Learning from others’ mistakes
Participants in the crypto ecosystem can strengthen their security practices and make them habitual by learning from others.
One striking case involved Dutch law enforcement’s takedown of the Hansa darknet market. After arresting the two German operators and seizing the servers from Lithuania, they didn’t shut the market down immediately. Instead, they allowed it to continue operating for another month, silently monitoring over 1,000 daily transactions.
This covert strategy allowed authorities to collect critical data on more than 10,000 users and their addresses. When the market was finally taken offline, the operation had provided a treasure trove of intelligence, which was shared with Europol. This led to widespread arrests and a significant blow to the darknet underworld.
This case highlights how proactive observation, continuous education and a well-executed strategy can turn the tide against even the most elusive scammers. Falling for a crypto scam doesn’t mean someone is unintelligent or foolish — it means they’re human. Scammers thrive on exploiting vulnerabilities, from overconfidence to emotional desperation. However, understanding the psychological tactics they use is key to preventing future attacks.
Understanding the psychological triggers scammers use to manipulate funds from users’ wallets to theirs is key to understanding how to prevent becoming a future victim.
How we rise: Learning from the experiences of others, staying educated and practicing vigilance are the most powerful tools for protecting ourselves from scams. By developing stronger habits, enhancing our awareness and using available tools, we can turn potential downfalls into opportunities for growth and security in the digital asset world.
Companies like Crystal, a blockchain intelligence company, help governments, crypto businesses, and financial institutions investigate cryptocurrency crimes. Using real-time blockchain intelligence tools, like transaction monitoring and aggregated transaction visualization, Crystal helps law enforcement agencies and companies make quick, informed decisions against crypto-related threats.
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