Defi Scams - Most Common Scams in the DeFi Space

Press Release • October 17, 2022

In the world of Defi, scams are unfortunately all too common. This article looks at popular Defi scams, how they operate, and how to protect yourself.



We'll also provide tips on what to do if somebody scammed you and how to report a scammer. Finally, we'll discuss the implications of DeFi scamming and present examples of successful prosecutions.


What Are DeFi Scams, and How Do They Work? 

Decentralized Finance (DeFi) is a term that has gained enormous popularity over the years. DeFi is the shift from centralized financial systems to peer-to-peer finance enabled by decentralized technologies built on the Ethereum blockchain.


DeFi promises a more equal and accessible financial system, but it's still largely unregulated. Lack of regulation has made DeFi a haven for fraudsters, who have plundered millions from unwary consumers.

We can summarize a typical scam in three steps:


  1. The scammer creates a fake project or impersonates an existing one.
  2. The scammer promotes the fake project or impersonates the existing one to generate interest and attract users.
  3. The scammer exits the scam, leaving users with worthless tokens or no access to their funds.


The Most Common Types of DeFi Scams 

There are many types of scams in the DeFi sector, but some are more common than others. Let us look into a few of this industry's most frequent criminal schemes.


Phishing scams

DeFi is not immune to phishing scams. Due to the intricacy of several DeFi protocols, fraudsters have managed to successful target newcomers. 


The most common type of phishing scam in the DeFi space is impersonation. This is when a scammer creates a fake website or social media account that looks identical to a legitimate one. 


They will then use this fake account to try and trick users into sending them money or personal information. Another common type of DeFi scam is the Ponzi scheme. Instead of investing the money, the fraudster pays out previous investors. 


This scam is widespread in the DeFi space, as there are often high returns from investing in new protocols.


Scams Involving Fake or Stolen Identities

One of the most common scams in the Defi space is identity theft. Someone uses your personal information to register a new account or access an existing one. 


They may also use your information to apply for credit cards or loans or to make purchases in your name.

Another way that identity theft can occur is when someone steals your private key or recovery phrase. This gives them access to your accounts and allows them to make changes or send funds without your permission.


Pump and Dump Schemes

If you are not new to the field of financial investments, then you must have probably heard about pump-and-dump schemes. 


A group conspires to acquire a cryptocurrency at the same moment to drive up its price. Afterward, it sells it when at the peak price after promising a group of traders that this would not happen.


Pumpers make a profit, whereas dumpers lose. Sadly, it’s as simple as that. Pump and dump schemes are not new and have been around for quite some time. They are so common that the U.S. Securities and Exchange Commission has issued an investor alert about them.


Forgery and Counterfeiting of Digital Assets

Unfortunately, not every project in the DeFi world is legitimate and original. Forgery and counterfeiting are rampant, with scammers selling digital assets that don't exist or aim to look like something else.

This scam generally happens when someone creates a website or social media account that looks identical to a legitimate project. However, the page has slight changes that allow the scammer to redirect funds to their wallet. 


For example, a scam on Twitter happened when someone created a fake version of the popular Defi project Uniswap. The account looked identical to the official one, except that it had one letter changed in the URL. 

This small change allowed the scammer to siphon over $150,000 worth of Ether (ETH) from unsuspecting users.


Fraudulent Activities Associated with Initial Coin Offerings (ICOs) 

Last but not least, ICOs tend to have an association with fraudulent activities. In an ICO, a company offers digital tokens for investors’ fiat currency or cryptocurrency. However, many ICOs are scams, with companies using the funds raised to enrich themselves instead of developing the project.


A severe fraud associated with ICOs is when the team behind the project absconds with the funds. This type of fraud is, technically, an "exit scam." 


In an exit scam, the team often creates a fake project website and whitepaper, promising huge returns to investors. They will then raise money from unsuspecting investors and make off the cash, leaving investors high and dry.


How to Protect Yourself from DeFi Scams 

At this point, you will probably be wondering how you can protect yourself from falling into one of these scams. Below are a few tips.


  1. Do your research: This is the most important thing you can do. When you are looking at a project, make sure to read up on it as much as possible. Look at the team’s backgrounds and the project’s roadmap, and try to find as much information as possible.
  2. Don’t invest more than you can afford to lose: This general rule applies to all investments, but it is essential in the DeFi space. These projects are still very new, and there is a lot of uncertainty surrounding them. As such, you should only invest an amount you are comfortable losing.
  3. Beware of social media scams: Social media is a great way to stay up-to-date on all the latest news in the crypto world. However, it is also an excellent way for scammers to reach many people. Be careful about the links you click on and the information you trust.
  4. Look for projects with KYC and audit certifications: If a project has undergone a KYC (know-your-customer) or audit process, it passed a vetting procedure. This adds an extra security layer and gives you peace of mind. SolidProof, PeckShield, Hacken, and Solidity Finance are popular companies taking care of this aspect.


What to Do If Somebody Scammed You

If you think someone scammed you, there are a few things you can do:


  1. First, try to resolve the issue with the person or company you believe scammed you. This may be difficult, but it's always worth a shot.
  2. Contact your local consumer protection agency if you can't resolve the issue.
  3. You can also file a complaint with the Federal Trade Commission (FTC) or the Better Business Bureau (BBB).
  4. Finally, you can contact a lawyer to discuss your legal options.


How to Report a DeFi Scam 

If you think you've been the victim of a DeFi scam, consider taking a few actions to report the criminals.

First, report it to the project team or protocol developers if possible. They may help you recover your lost funds or take action to prevent others from being scammed in the future.


You can also report the scam to a crypto exchange or wallet provider. Obviously, this is applicable if you used any of these channels to access the DeFi project. Many of them have fraud departments that can help you get your money back or prevent future scams.


Finally, you can report the scam to law enforcement. This is often a long shot, but it's worth doing if you've lost a significant amount of money.


The Consequences of DeFi Scamming 

Besides losing your money, scamming in the DeFi sector has several adverse effects on the industry. For instance, it undermines the trust in decentralized finance protocols and gives scammers free marketing.

When a user falls into a scam, it's not only the investor who loses money. The whole DeFi industry is negatively affected by it. 


Scammed users will likely be more cautious in the future, leading to a decrease in trust in decentralized finance protocols. Using popular DeFi protocols and services, they can reach a larger audience and scam more people. In addition, it gives scammers free marketing. 


Examples of Successful DeFi Scam Prosecutions 

In recent years, there have been several successful DeFi scam prosecutions. Here are some notable examples:


In 2019, the US Securities and Exchange Commission (SEC) charged a company called EtherDelta with operating an unregistered securities exchange. The Ethereum blockchain-based decentralized exchange EtherDelta enables users to swap ETH and ERC20 tokens.


The SEC alleged that EtherDelta's founder had illegally profited from the exchange by operating it as an unregistered broker-dealer. Coburn agreed to pay $300,000 in penalties and disgorge nearly $13 million in ill-gotten gains.


In 2020, the CFTC accused My Big Coin Pay, Inc. of running a fraudulent virtual currency operation.

My Big Coin Pay promised investors they could use virtual currency to buy and sell goods and services. However, the CFTC alleged that the company used investor funds to pay for personal expenses, including travel and luxury goods.


The CFTC ordered My Big Coin Pay to pay $6 million and disgorge nearly $360,000 in ill-gotten gains.

These are just a few examples of the many successful DeFi scam prosecutions that have taken place in recent years. These cases show that law enforcement is taking action against DeFi scams. If you have been a victim of a DeFi scam, you should contact a lawyer to discuss your legal options.


The Importance of Verifying Senders and Receivers Before Transferring Funds 

One last thing you should consider before transferring funds is verifying both the sender's and receiver's addresses. Too many people have fallen victim to scams because they didn't confirm the address before sending funds. 


If you're not sure how to verify an address, here are a few tips: 


  • Check if the address is valid on Ethereum's leading network. You can do this by pasting the address into a block explorer like EtherScan. 
  • Make sure the address has a balance. If it doesn't, that could be a sign that it's not a valid address. 
  • If you're sending funds to an exchange, check if the exchange has a page on EtherScan. If it does, compare the addresses to make sure they match. 


These are just a few of the many ways you can verify an address. By taking these extra steps, you can help protect yourself from scams.


Bottom Line - Protecting Yourself from DeFi Scams Takes Education and Awareness

The best way to protect yourself from DeFi scams is to educate yourself and stay aware of the latest scams. Understanding how these scams work can help protect yourself and your hard-earned money.


Contact a lawyer to discuss your options if you think you may have been a victim of a DeFi scam. There were cases in which the legal authorities managed to get the victims their money back.

Disclaimer: This is not trading or investment advice. The above article is for entertainment and education purposes only. None of the content on Crypto Folds is investment advice nor is it a replacement for advice from a certified financial planner. Please do your own research before purchasing or investing into any cryptocurrency.  

$1 Memecoin Relaunches as Community-Led Movement Against Inflation and Dollar Erosion

By Press Release • July 29, 2025
A decentralized crypto protest is gaining traction amid rising economic uncertainty. The $1 coin , abandoned in 2024, has officially been relaunched.  The resurgence is linked to recent macroeconomic news as symbolic protest against today's challenges, such as inflation and fiat monetary policy. The team behind the $1 sees an overall erosion of trust in the economy, starting from central banks. What began as a joke is now an on-chain movement. This initiative represents frustration with monetary debasement and gathers people who are not pleased with the current institutional opacity. A Protest Coin for a Turning Point in Monetary History The reawakening of $1 comes as a cascade of macroeconomic shocks and cultural flashpoints that challenge assumptions about fiat stability. This moment is defined by a convergence of forces: The U.S. dollar has fallen 11% year-to-date. Global de-dollarization is accelerating: BRICS nations are shifting to local currency trade, while the EU is exploring EUR-settled energy markets. The “One Big Beautiful Bill” (OBBB) legislation has passed, triggering renewed public debate over national debt and inflation risk. Elon Musk has dragged the fiat debate into the mainstream, using X as his battlefield: He reposted: “Tax cuts are worthless if the government keeps overspending. Inflation is the real tax.” When asked if the America Party would embrace Bitcoin, he replied, “Fiat is hopeless, so yes.” Both posts from Elon went viral, galvanizing conservatives, Bitcoiners, and disillusioned voters alike. Within this context, the $1 coin has resurfaced as a symbolic instrument. The project is a digital protest born from cultural frustration. From Abandonment to Decentralized Continuity After its original developer exited in late 2024, the memecoin was left without a roadmap, treasury, or active team. A decentralized group of supporters voluntarily assumed the website and social media channels, transforming the abandoned coin into an evolving anti-fiat campaign. The name itself references the loss of purchasing power over the last century. In 1913, $1 held the value equivalent to $32.47 at the time of writing, which is the project’s target price today. The memecoin reclaims that lost value symbolically as the “unprintable dollar.” The team's strategy is not based on promises of utility or price predictions, but on cultural alignment and the pursuit of financial sovereignty. A Digital Echo of a Historic Signal The phrase “Just buy $1 worth of this coin” is the official name of the project and echoes the famous 2011 appeal by early Bitcoin advocate Davinci Jeremie: ”Just buy $1 worth of Bitcoin.” That same ethos (individual action as quiet defiance) now fuels the $1 movement. The difference is that this message is now embedded in meme culture, open contribution, and collective resistance. Supporters also fund the movement through the project's NFT collection. These digital collectibles serve not as speculative assets but as community badges. These are small, symbolic acts of support with the underlying message. A Movement, Not a Product The $1 project offers no central leadership, no development roadmap, and no technological utility. Its value lies in what it represents: A critique of unchecked monetary expansion A decentralized symbol of protest A tokenized community in an era of financial uncertainty Participation is open, and contributions are voluntary. Messaging is coordinated publicly through social channels, with no presales or treasury allocations tied to the token itself.​​The ultimate goal is cultural as much as financial. If and when the price surpasses one US dollar, the statement becomes undeniable: the unprintable dollar outperformed the one that was printed into irrelevance. That moment will serve as both validation and the centerpiece of the movement’s narrative. About $1 The $1 memecoin is a community-led crypto protest launched on Solana in 2024. It was revived in 2025 by a decentralized group of volunteers. It operates without a central team, funding, or promised utility. The token is intended to draw attention to long-term fiat debasement and the diminishing purchasing power of government currencies. The accompanying NFT collection helps fund outreach and operational efforts. $1 is not a financial instrument. It is a cultural response to macroeconomic disillusionment. Anyone wishing to find out more about the $1 project and its long-term view can visit the official website . The social media pages below (X and Telegram) are another way to keep in touch with this team. X (Twitter) | Telegram | Reddit

Predictino Launches Public PREDINO Presale to Bring AI Forecasting to Crypto Traders

By Press Release • July 29, 2025
Predictino , an AI-powered trading intelligence platform, has officially launched the public presale of its token, PREDINO. The team is inviting early supporters to participate in this new project belonging to the crypto predictive analytics niche.  The launch is an important milestone in Predictino’s roadmap. The team behind Predictino is working to bring institutional-grade forecasting tools to retail traders. The idea is to combine real-time AI signals with a transparent blockchain infrastructure to support crypto (and other markets) traders. AI Forecasting Meets DeFi Utility Predictino combines various technological pillars, such as: Machine learning Real-time market scanning Advanced predictive modeling The idea is to deliver signal-based insights even beyond crypto for those traders interested in Forex and equities. This team of developers tested internally the AI engine of the project in a process that lasted several months. In all of this, the project’s native token, PREDINO, has a clear scope. Every token holder will have access to a long list of features: Real-time signal streams Predictive dashboards Historical model performance metrics The token also gives holders access to staking, governance participation, and the next updates in the platform. Transparency and Long-Term Utility Unlike many speculative token launches, Predictino emphasizes transparency and functionality. The project is built around a clear utility model, with no hidden mechanics or untested promises. The AI engine will grow alongside the community, with modular updates and data feedback loops improving accuracy over time. The PREDINO token presale allocation includes: 34% for public participants 18% to support development and infrastructure 15% dedicated to staking and access rewards Remaining allocations cover liquidity, team vesting, partnerships, and ecosystem growth. Built in Dubai, Designed for Global Markets Headquartered in Dubai, a global hub for Web3 innovation, Predictino reflects the region’s commitment to crypto transparency and regulatory clarity. As part of its global expansion plan, the platform will soon support additional markets beyond crypto, including forex and equities. The next development phase includes the release of the Predictino AI dashboard. Besides, automated trading features and DAO voting via PREDINO tokens will also become available. About Predictino Predictino is a decentralized AI forecasting platform with new features for its users. The project puts together real-time trading signals in multiple markets (crypto and beyond). PREDINO is the platform’s native utility token, which is now available through its presale. From staking to governance to exclusive features, this team attached several perks to owning the token. The project's official website and social media pages below will help anyone keep in touch with this team. X (Twitter) | Telegram

Bhad Bhabie Launches $BHAD: A Community Token Built with Purpose

By Press Release • February 10, 2025
Danielle Bregoli, better known as Bhad Bhabie, is shaking up the crypto world with the launch of $BHAD, a community-driven token designed to make a real impact. Unlike typical celebrity crypto projects that often leave fans feeling burned, $BHAD stands for transparency, accountability, and purpose. She is proving once again that she’s more than just a viral sensation. This isn’t just another vanity project. $BHAD was created to support two things close to Bhad Bhabie’s heart: funding cancer research and furthering her music career. She’s pledged 50% of her limited 20% stake in the token to cancer research, demonstrating her commitment to using her platform for something bigger than herself. What Makes $BHAD Different?  Since bursting onto the scene in 2017, Danielle has transformed viral fame into a multimillion-dollar career spanning music, beauty, and now cryptocurrency. With $BHAD, she’s taking her entrepreneurial spirit to new heights, using blockchain technology to connect with her fans and supporters in an entirely new way. At a time when many celebrity tokens have been labeled “pump-and-dump” schemes, $BHAD is taking a new approach. It’s fully community-owned, meaning no hidden agendas or backdoor deals. Every transaction has a purpose: to fund cancer research or to grow the creative community surrounding the token. Danielle’s hands-on involvement, from helping lock tokens to hosting live Q&As on X (formerly Twitter) shows her commitment to doing things the right way. The $BHAD community is already growing fast, with over 1,000 members active on Telegram and countless more on Instagram, X, and TikTok. Known as "Bhadies," this group is proving that crypto can bring people together for something bigger than profits. She’s inviting the top 20 $BHAD holders to her 22nd birthday bash at Magic City, Atlanta’s biggest strip club. It’s her way of giving back to the people who believe in $BHAD and showing love to her biggest supporters. Why the Crypto Community Should Care $BHAD isn’t about hype or quick profits. It’s a project designed to bring the crypto and creative worlds together and set a new standard for what blockchain and celebrity initiatives can achieve together. By connecting the crypto space with a greater cause, $BHAD is proving that digital assets can have real-world meaning and impact. How to Get Involved $BHAD tokens are now available through public sale. Whether you’re a fan, a crypto enthusiast, or just someone who wants to make a difference, this is your chance to join a movement that’s about more than just money. Learn more at www.bhad.xyz and follow along on X , Instagram , or Telegram for updates. MEDIA CONTACT: Bhad Bhabie bhadbhabie@giuvenile.com About Bhad Bhabie Danielle Bregoli, aka Bhad Bhabie, became a viral sensation with hits like “Gucci Flip Flops”, featuring Lil Yachty, and “Bestie” featuring Kodak Black and Megan Thee Stallion. Now, she’s using her platform to give back and inspire change. With $BHAD, she’s proving that influence can be used for good—and that crypto doesn’t have to be shady to succeed. Useful Links: Website: https://www.bhad.xyz/ X (Twitter): https://x.com/bhadtoken Instagram: https://www.instagram.com/bhadtoken/ Telegram: http://t.me/BhadToken TikTok: https://www.tiktok.com/@bhadtokenofficial

Berachain Airdrop: A Major Success in the Crypto Airdrops Scene

By Press Release • February 10, 2025
In the fast-paced world of cryptocurrency, crypto airdrops have become a lucrative opportunity for both seasoned traders and newcomers looking to earn free tokens. Following the massive success of Hyperliquid’s billion-dollar airdrop, Berachain has now positioned itself as the latest major win for airdrop farmers. With its recent mainnet launch and an impressive $1.1 billion token distribution, Berachain has made waves in the crypto airdrops scene.  Berachain Airdrop Details: A Game-Changer in Crypto Airdrops On February 6, 2025, Berachain launched its highly anticipated mainnet, introducing its native token BERA to the market. To reward its community and early supporters, Berachain distributed 79 million BERA tokens, representing 15.75% of the total token supply. The airdrop targeted community members, liquidity providers, and decentralized applications that contributed to the ecosystem’s growth. Market Reaction and Token Price Volatility Before the airdrop, BERA was trading at around $8, valuing the airdrop at a staggering $632 million and placing Berachain’s market cap at $4 billion. However, as with most major token distributions, BERA’s price experienced sharp volatility. Initially, BERA surged to $14.83, driven by speculation and high demand. Yet, within hours, the price dropped to around $7.68 as traders took profits and liquidations occurred. One of the primary reasons for the price drop was a long squeeze, which forced highly leveraged positions to close, causing cascading liquidations. This level of volatility is common in large crypto airdrops, as many recipients quickly sell their free tokens to lock in profits. Despite the price fluctuations, Berachain’s airdrop remains one of the largest in recent memory, proving that airdrops are still a powerful mechanism for wealth distribution in the crypto world. How Berachain Compares to Other Major Crypto Airdrops Hyperliquid’s Billion-Dollar Airdrop: A Precedent for Success Before Berachain, the most talked-about crypto airdrop was Hyperliquid, which saw its token distribution push the project to a billion-dollar valuation. Hyperliquid rewarded its early adopters generously, setting the stage for Berachain’s similar approach. These airdrop events highlight the growing trend of rewarding active community members instead of relying solely on private sales and venture capitalists. Airdrop Farming and the Search for the Next Big Opportunity Berachain’s success has reinforced the practice of airdrop farming, where users interact with protocols in hopes of qualifying for future airdrops. This strategy has led to increased interest in finding the next big airdrop, as crypto enthusiasts explore new ecosystems for potential rewards. What’s Next? Upcoming Airdrop Opportunities to Watch For those who missed out on Berachain’s airdrop or are looking for the next big opportunity, two projects stand out: Abstract and Kaito AI. Abstract: Pudgy Penguins’ Layer-2 Network Abstract is a new layer-2 blockchain developed by the team behind Pudgy Penguins, a popular NFT collection. While the network has faced challenges in attracting liquidity (with its total value locked at $33 million), many airdrop hunters believe that Abstract is preparing for a major token distribution soon. Kaito AI: The Future of Web3 Intelligence Kaito AI is an innovative AI-powered platform that aggregates and organizes crypto data to provide real-time insights. It has launched a Yaps Points Program, rewarding users for engagement and contributions. While the team hasn’t officially announced a token, speculation is growing that Kaito AI will introduce an airdrop to reward early adopters. Where to Find Airdrops? Top Platforms to Track New Opportunities If you’re looking to stay ahead in the crypto airdrops scene, several platforms specialize in tracking and listing active and upcoming airdrops. Here are two of the best resources: AirdropAlert.com – One of the most established sites for discovering active airdrops, complete with guides on how to qualify for them. FreeCoins24.io – A leading platform curating free cryptocurrency opportunities, including crypto airdrops and giveaways, helping users earn crypto effortlessly. Final Thoughts: Berachain’s Airdrop Sets a New Benchmark Berachain’s $1.1 billion airdrop has proven that airdrops remain one of the most effective ways for blockchain projects to grow their communities. While token price volatility is expected, the long-term impact of these distributions can be immense, fostering engagement and decentralization. With new crypto airdrops like Abstract and Kaito AI on the horizon, airdrop farming continues to be a lucrative strategy for crypto users looking to earn free tokens. For those eager to participate, staying informed through platforms like AirdropAlert.com and FreeCoins24.io is the key to securing the next big opportunity. Are You Ready for the Next Airdrop? If you missed out on Berachain’s massive airdrop, don’t worry—new opportunities are always around the corner. Start researching, engaging with projects, and preparing for the next wave of crypto airdrops!
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