I’m going to interrupt the regularly scheduled breakdown of top cryptocurrency assets and discuss an ugly topic that absolutely needs to be addressed: crypto scams.

It’s a topic near and dear to me because I almost got scammed myself. Typically, you’d think that fraudulent schemes are relatively easy to identify. Unfortunately, the days of trashing or ignoring pleas from Nigerian princes to cash $5 million checks are gone. Instead, crypto scams are incredibly clever thanks in part to the myriad of technologies available.

Quick story: I almost got suckered into a trap because I was sold an opportunity that was very much in line with prior crypto ventures that turned out to be lucrative. I didn’t realize that something was up until a certain “behavioral tick” triggered an internal red flag that I was possibly dealing with a Russian con artist.

While I was lucky to catch on, there are many that fall prey to these terrible schemes. Let me do my part in helping the community by warning about these crypto scams.

Pig Butchering

According to the U.S. Department of Justice, in a pig-butchering con, “scammers obtain funds from victims using manipulative tactics. The scammer establishes a level of trust with a victim in online communications and then entices the victim into investing in a fraudulent cryptocurrency scheme. Often the victim is enticed to make additional payments before realizing they are a victim of fraud.”

People who engage in pig butchering are the worst and deserve a healthy dose of karma walloping them. It’s one of the double-edged crypto scams: first, the victim is tricked into a relationship that simply doesn’t exist. Then, he or she must deal with the loss of money and the shame that comes with it.

Unfortunately, what makes this scheme so pernicious is that online romance is truly a thing. It’s so much a thing that people no longer think twice about it. But just like the separation of church and state, it’s just best to keep your love life out of your crypto life.

Rug Pull

From CoinDesk, “[a] rug pull is a type of exit scam that involves a team raising money from investors and the public by selling a token only to quietly shut down the project or suddenly disappear, stealing the raised funds and leaving ‘investors’ (i.e., their victims) with worthless tokens.”

It’s one of the most vicious crypto scams because of the seeming clout involved. “Rug pulls can be extensively orchestrated, with nefarious actors leveraging social media influencers and hype-generating campaigns to lure as many victims as possible,” states the blockchain-centric publication.

Now, what makes the rug pull so enticing at first is that fraudsters effectively hype the target token. Once it reaches a certain price point, these folks dump the “asset,” leaving unsuspecting stakeholders with massive losses.

In the world of virtual currencies, it’s so difficult to tell what is a legitimate opportunity that happens to be skyrocketing versus an outright fraud. For that reason, beginning crypto investors should consider targeting only major assets at first. Also, rug pulls tend to occur on decentralized trading platforms.

Phishing

Techopedia provides an excellent definition of phishing as it relates to crypto scams. The con involves “an attempt to trick people into revealing the recovery phrase or private key to their crypto wallet. Much like the phishing we know from the non-crypto world, scammers often pretend to be someone else, such as a representative from a trusted app or crypto exchange.”

I know we love to think that phishing can’t happen to us because we’re tech savvy or whatever. Believe me, it can easily happen to you and so it’s well worth repeating the point. Whenever you get an email of an important nature, be sure to double check who’s sending it. Also, make sure that you’re the one requesting the information. Your crypto broker won’t ask you to login just because.

Now, it might seem like an obvious warning. However, we live busy lives. When you’re juggling multiple tasks and a familiar institution shows up on your inbox, you just might login out of habit. That’s what these phishing crypto scams are preying on. Again, just be mindful.

Giveaways

There’s an old adage that states that there’s no such thing as a free lunch. Truly, there is no such thing as a free lunch. You should be extremely skeptical of giveaways. As the wallet service Kraken points out, this type of con is one of the most prevalent crypto scams.

“Often found on popular social media platforms such as Youtube or Twitter, these are a form of social engineering attack used to convince you to send crypto to scammers,” states the virtual currency service. Now, you might think that you’re street smart and aware of various tricks. Maybe you are. However, the issue is that these con artists are very clever.

Not only that, an emotional element exists in the giveaway con and other crypto scams. Basically, these fraudsters tap into insecurities and in doing so offer a compelling solution. So, it’s not just about the trick itself, which may be easier to spot. Rather, it’s the combo of emotional manipulation that can get you.

AI Trading

With the advent of artificial intelligence – particularly generative AI chatbots – there’s been a hype train surrounding computer-generated content. Indeed, people tend to associate AI with supreme capabilities and that’s not an unreasonable assumption. For example, a chess bot can analyze thousands upon thousands of moves within a second. So, as the thinking goes, the same must be true for market analyses.

In reality, it’s a mixed bag. Yes, AI can analyze years of market data and spit out various probabilities. But that’s just it – they’re probabilities, not certainties. Just because you have an AI protocol crunching the numbers doesn’t mean that its projected assessment is any more accurate than yours. Further, popular chatbots like ChatGPT can get both factual statements and mathematical calculations wrong.

Therefore, you should be extremely skeptical about trading protocols that claim to leverage AI to help you be profitable. While I can’t blast every proposal in existence, there’s a good chance you’re dealing with one of the crypto scams.

Deepfake Scams

Deepfakes are getting scary. Not too long ago, a news story broke that authorities arrested a high school’s former athletic director due to a fake voice recording of the school’s principal saying some rather unsavory things. Given the prevalence of this easily abusable technology, it’s no shock that it represents one of the more worrying crypto scams to avoid.

Of course, what makes deepfakes so problematic is their rising realism. Unless you’re attuned to small details, you can easily be misled. Further, the emotional factor – combining deepfake videos with messages that exploit one’s insecurities – can lead to rash decisions.

What’s perhaps most vexing about deepfakes is that the perpetrators can fake anyone. Such schemes give the impression that popular influencers, thought leaders or celebrities endorse certain coins and tokens when they don’t. And by the time the scheme is uncovered, the con artists simply vanish with the cash.

If you come across videos that showcase celebrity endorsements, always conduct your own independent research. Chances are, you’ve come across yet another example of crypto scams.

MEV-Bot Scam

This is the one that almost got me. MEV stands for maximal extractable value. Per Ledger.com, a MEV is a strategy block that producers (also known as validators or miners) use “to optimize their profitability by deliberately including, omitting, or changing the order of transactions during the block creation process.”

It’s sometimes known as an “invisible tax” because MEVs extract “extra value from a block on top of block rewards and transaction fees.” Now, these scams purport to help you skim some off the top through a complex coded algorithm, which is provided for you. It sounds wacky at first but advanced crypto traders routinely utilize coding to give them an advantage.

Plus, I’ve personally been involved with passive income schemes that have generated crypto earnings. What’s more, I even asked AI protocols to “read” the MEV-bot code and nothing seemed amiss. However, it was the aforementioned behavioral tick that clued me in to the scam.

As I later discovered, pretty much every MEV bot out there is a con job. Just stay away.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.