As Bitcoin’s price surges, it is attracting more thieves. According to the FBI, in 2022, crypto scams resulted in north of $2.57 billion in losses. The average victim lost $54,000. The increasing intersection of cryptocurrency popularity and evolving fraud tactics highlights the critical need for proactive security measures.
Experts from Apex discuss the most pressing risks facing cryptocurrency users, supported by real-world cases and actionable solutions.
1. Protect Your Seed Phrase: The Key to Your Crypto Kingdom
Why It’s Dangerous: Seed phrases are essential for accessing wallets. Storing them digitally—whether in cloud services, notes apps, or screenshots—exposes users to malware that scans for and steals this information. Blockchain.com reports that compromised seed phrases caused 27% of cryptocurrency losses in 2023, with average losses exceeding $85,000.
Real-Life Case: In 2023, scammers targeted wallet users by exploiting cloud-synced screenshots containing seed phrases. Victims collectively lost millions (Kaspersky).
How to Stay Safe:
Write your seed phrase on durable materials like metal or paper.
Store it securely in multiple locations, such as safety deposit boxes.
Never save seed phrases digitally or share them with anyone.
2. Avoid Social Media Scams
Why It’s Dangerous: Scammers increasingly use AI-generated messages and deepfake videos to impersonate trusted figures or organizations, deceiving users into investing in fraudulent schemes. The UK’s National Cyber Security Centre reported that 73% of cryptocurrency scams in 2023 began on social media or through direct messages.
Real-Life Case: A global scam in 2023 used deepfake videos of Elon Musk endorsing fake cryptocurrency projects. The scheme defrauded victims of more than $100 million (BBC).
How to Stay Safe:
Only engage with verified profiles and websites of exchanges or wallets.
Bookmark official pages to avoid phishing links.
Be skeptical of unsolicited investment offers, regardless of who appears to endorse them.
3. Beware of Smart Contract Vulnerabilities
Why It’s Dangerous: Smart contracts enable decentralized finance (DeFi) but are vulnerable to exploits. In 2023, smart contract vulnerabilities accounted for over $686 million in losses (CertiK).
Real-Life Case: In 2023, a high-profile DeFi protocol suffered a $120 million exploit due to flaws in its smart contract. Thousands of users lost their holdings (CoinDesk).
How To Stay Safe:
Interact only with contracts audited by reputable firms.
Limit token approval permissions to prevent wallet-draining exploits.
Use hardware wallets with built-in contract review features.
4. Verify Wallet Addresses to Avoid Clipboard Hijacking
Why It’s Dangerous: Clipboard hijacking malware silently replaces copied wallet addresses with those controlled by attackers. Victims often only discover the change after irreversible transactions.
Real-Life Case: Kaspersky’s 2023 Cryptocurrency Security Report highlighted a 30% rise in clipboard hijacking attacks. One victim lost €50,000 when malware altered the copied address before a transaction (Sophos).
How to Stay Safe:
Manually verify wallet addresses before confirming transactions.
Use QR codes to minimize risks associated with copy-pasting.
Invest in hardware wallets that display and verify transaction details.
5. Secure Your Devices Against Cyberattacks
Why It’s Dangerous: Cybercriminals frequently target mobile devices and desktops using malware, keyloggers, and screen recording tools to extract sensitive information. Symantec’s 2023 Internet Security Threat Report found that 42% of mobile device users experienced breaches affecting cryptocurrency holdings.
Real-Life Case: In a recent attack, spyware targeted Android users, intercepting 2FA codes and draining wallets. One victim reported losing over $200,000 within minutes (Symantec).
How to Stay Safe:
Dedicate specific devices for cryptocurrency transactions.
Regularly update operating systems and apps to patch vulnerabilities.
Enable full-disk encryption and use trusted antivirus software.
6. Always Test Transactions Before Sending Large Amounts
Why It’s Dangerous: Errors in wallet addresses, incompatible networks, or incorrect fee settings can result in irreversible losses. Coinbase’s 2023 report found that 33% of irreversible errors could have been avoided with test transactions.
Real-Life Case: A user lost $10,000 in Ethereum after mistakenly sending funds to a Binance Smart Chain address due to network incompatibility (CoinDesk).
How to Stay Safe:
Send a small test transaction to verify address accuracy and network compatibility.
Confirm receipt of funds before proceeding with larger amounts.
Document successful transaction parameters for future use.
“Cryptocurrency has opened up incredible opportunities, but it has also introduced serious risks—especially with the rise of AI-driven deepfakes,” an ApeX representative said. “Scammers are now using AI to create convincing videos and messages that impersonate trusted figures, tricking people into following false recommendations.
“What’s even more alarming is how quickly these scams can scale. A single deepfake or AI-generated message can reach millions of people across social media in minutes, creating a wave of false trust that’s hard to contain. Education, vigilance, and systemic solutions like better AI detection tools and stricter platform regulations are key. By staying informed and working together, we can protect ourselves and help build a safer crypto space for everyone.”