Scam Terminology Dictionary

Key Definitions for Informed Investing

Familiarity with fraud-related vocabulary helps investors identify potential scams. This dictionary provides clear definitions of terms commonly associated with crypto fraud schemes.

A - D

Address Poisoning: A scam where attackers send small transactions from addresses that look similar to legitimate ones, hoping victims will accidentally copy the wrong address for future transactions.
Airdrop Scam: Fake token distributions that require victims to connect their wallets to malicious sites or pay fees to claim worthless tokens.
Boiler Room: High-pressure sales operations where scammers use aggressive tactics to convince victims to invest in fraudulent schemes.
Clone Phishing: Creating exact replicas of legitimate websites or emails to trick users into entering credentials or making payments.
Crypto Dusting: Sending tiny amounts of cryptocurrency to wallets to track transactions and potentially identify wallet owners for targeted attacks.

E - H

Exit Scam: When operators of a cryptocurrency project or exchange suddenly disappear with investor funds, shutting down all operations.
FOMO (Fear of Missing Out): Psychological tactic used by scammers to create urgency and pressure victims into making hasty investment decisions.
Front Running: Exploiting advance knowledge of pending transactions to profit at others' expense, common in DeFi environments.
Honeypot: Smart contracts designed to appear profitable but contain hidden code that prevents users from selling or withdrawing their funds.

I - L

Impersonation Scam: Fraudsters posing as celebrities, influencers, or support staff to trick victims into sending cryptocurrency or revealing credentials.
Initial Coin Offering (ICO) Scam: Fraudulent token sales where developers collect funds for fake or abandoned projects, leaving investors with worthless tokens.
Liquidity Mining Scam: Fake DeFi protocols that promise high yields for providing liquidity but steal deposited funds through malicious smart contracts.

M - P

Mining Scam: Fraudulent cloud mining services that collect payments but never provide actual mining power or returns.
Pig Butchering: Long-term romance scams where fraudsters build relationships over weeks or months before convincing victims to invest in fake platforms.
Ponzi Scheme: Investment fraud where returns for existing investors are paid from funds contributed by new investors rather than from profit.
Pump and Dump: Artificially inflating an asset's price through coordinated buying and misleading promotion, then selling at the peak.

Q - T

Recovery Scam: Secondary scams targeting previous victims, offering to recover lost funds for an upfront fee but providing no actual service.
Rug Pull: When developers abandon a project and run away with investor funds, often by draining liquidity pools or disabling selling.
Seed Phrase Scam: Tricks to obtain wallet recovery phrases, including fake support, phishing sites, or malware that captures typed seed words.
Shill: Someone who promotes a cryptocurrency while hiding their financial interest, often paid to generate artificial enthusiasm.

U - Z

Unregulated Broker: Trading platforms operating without proper financial licenses, offering no investor protections or recourse for fraud.
Wallet Drainer: Malicious smart contracts or websites that, once connected to a wallet, automatically transfer all assets to the attacker.
Wash Trading: Artificially inflating trading volume by repeatedly buying and selling the same asset, creating false impressions of market activity.
Zero-Day Exploit: Attacks exploiting previously unknown vulnerabilities in software, smart contracts, or protocols before patches are available.

Stay Informed

The cryptocurrency scam landscape evolves constantly. Bookmark this page and check back regularly for updates. For platform-specific investigations, browse our review database.