For investors looking to make substantial returns in short periods of time, high-yield investment programs (HYIPs) can be tempting. Unfortunately, many of these programs turn out to be fraudulent, leaving investors with nothing but lost assets. HYIPs may come in many forms. Common scams include fake futures projects, fake lottery, online job, and romance scam. The hallmark is the promise of incredible returns at little or no risk.

This article lists four common scams to help users better understand and prevent similar scams.

Common scams

1. How HYIPs work

In many cases, HYIPs will have legitimate-looking websites that use complicated investing jargon to seem real. To give you a better idea, here we present an example of a fraudulent investment website that was recently reported by our users.

This fake website claims to be a US-based Forex and cryptocurrency trading firm, offering profitable investment plans, such as a 4% ROI for the starter plan and a 15% ROI for the advanced plan. They also promise that interest on your deposit is acquired daily, weekly, or bi-weekly, and you can withdraw your capital and interest without any fees.

It all sounds like a great way to invest money. You sign up on the website and make your first deposit. Over the next few days, it shows that your account balance is going up and you’re earning high returns. At this point, you might try to withdraw assets and see if everything works as promised. Once you confirm that it is, you deposit more money, hoping to earn even higher returns. Until, all of a sudden, your account is prohibited from withdrawal, or you may have to pay a high fee to access the capital.

In reality, this is just a scam. The account balances that you see on the websites are fake. Unfortunately, many individuals have fallen victim to this fraud, losing significant amounts of money in the process.

2. Phony Promotional Events

Recently, CoinEx has received numerous reports from users who fell victim to a fake lottery event. In these cases, the scammers are advertising this fraudulent giveaway on a fake website using the CoinEx brand name, and they are luring users to take part in a roulette lottery, with a mega prize pool of up to 300,000 USDT.

If you're told to have won the fake lottery, the scam website will then direct you to visit another fraudulent website. What's more, the scammer will provide a username and password for you to claim the winnings.

Once you enter the given login info, you will be thrilled to see a balance of 300,000 USDT in this account, believing you did win the lottery. But this excitement will quickly turn to dismay, when you realize the assets are not available for withdrawal. Instead, you are told to pay an "activation fee" in ETH before claiming the winnings. Despite these obvious red flags, those who get greedy will end up sending ETH to the wallet address given by the scammers, only to find that their asset is gone for good.

3. Online job scams

Scammers often target potential victims by searching recruitment websites and casting a wide net. They post fraudulent job listings that appear to offer legitimate opportunities. These postings typically highlight attractive features such as high salaries, generous benefits, remote work, and simple full-time or part-time roles.

There are two common types of Job scams. The first involves earning commissions by completing tasks, while the second requires victims to pay fees for various reasons, such as on-the-job training, processing fees, etc.

Example: Completing tasks and earning rebate

• Step 1: Scammers will arrange interviews and tests according to the normal recruitment process, and guide users to complete tasks. Such as transferring to a deposit address specified by the scammers. After depositing, the rebate can be seen in user's CoinEx account, and users can withdraw assets normally at this stage. 
• Step 2: Once users receive the real rebate, they begin to trust the scammers. Then the scammers will induce users to transfer more to the specified deposit address, often claiming that a higher deposit will result in greater rebates. 
• Step 3: When the amount reaches a certain level and the user attempts to withdraw assets from the fraudulent platform, scammers claim that the assets have been frozen due to prolonged inactivity, and require the payment of a high deposit or income tax before processing the withdrawal. Despite realizing they have been deceived, some users may still pay the requested fees, only to discover that they are unable to withdraw their assets in the end.

4. Romance scam

In romance scams, the scammer makes friends through social media and becomes an online couple, or the scammer pretends to be an investment mentor and shows off on various social platforms how to easily earn high incomes and leaves contact information.

Case:

• Step 1: Scammers show off their wealth on social platforms to lure users with promises of making money and investing together. After making a small investment in the early stage, users start to trust the scammers.
• Step 2: The scammers then persuaded users to make large deposits by depositing to the fraudulent platform for trading. When users attempted to withdraw assets from the platform, the scammers claimed that their accounts were under risk control. Require the payment of a high deposit or income tax before processing the withdrawal. Despite realizing they have been deceived, some users may still pay the requested fees, only to discover that they are unable to withdraw their assets in the end.

How to spot HYIPs

When it comes to high-yield investment scams, there are a few “red flags” to watch out for.

1. High returns and low risk

Be cautious of anyone promising guaranteed investment returns, particularly in the crypto industry where the risk is high. HYIPs often promise low risk and very high returns on an annual, monthly, weekly, or daily basis. Remember, if something sounds too good to be true, it probably is.

2. Pressure to invest quickly

HYIPs will often place pressure on you to invest quickly, using tactics such as limited-time offers or exclusive investment opportunities to create a sense of urgency. The scammers may also try to exploit your fear of missing out on a potential investment, making it difficult for you to say no.

3. Guiding asset transfer

Any behavior that guides you to transfer funds to a designated payment address in an official capacity is a scam. Please do not trust activity information from unknown sources and do not transfer funds to payment addresses from unknown sources.

How to avoid being a victim

1. Stick to the official channel

CoinEx operates only one official website at coinex.com. Please do not click on any links shared by unofficial customer support, and it is advised to use CoinEx's official verification tool to authenticate the legitimacy of any channel claiming to represent CoinEx, before trusting or using that channel.

2. Ignore unsolicited communications

Disregard and ignore any unsolicited direct messages from other channels (such as telegram and X). Please rest assured that CoinEx official support team will NEVER send direct messages to you, before you contact us first.

3. Avoid private transactions 

Be wary of all kinds of luring information claiming "high-yield", avoid engaging in private transactions with strangers and remain skeptical of online activities that encourage transfers to specific addresses. Always double-check the authenticity of such claims to protect yourself from potential fraud.

4. Beware of "Low-barrier, High-yield" scam

Scammers often exploit people's desire for easy profits by promoting low-barrier, high-yield opportunities. Remember, if something seems too good to be true, it usually is. Always approach such offers with caution to avoid falling into scams.

5. Avoid Transferring assets to unknown payment addresses

Do not trust activities that prompt you to send money to the specific deposit address. Any official request for a transfer to the specific address, especially from unverified sources, is a scam routine.

6. Protect personal privacy

When applying for jobs online or other online activities, refrain from disclosing personal privacy and pay attention to protecting personal information security.

7. Be wary of jobs that require upfront payment

Be wary of any job that requires advance payment or fee. Legal companies will not let their employees advance payment first.

What to do if you have been scammed

1. Cease all contact with the scammer.

Including via email, text, social media, and other channels. Refrain from making any further payments to them to avoid additional asset loss.

2. Contact your local police to report the scam.

Providing all relevant evidence such as the scammer's information, chat logs, and transaction details. While there's no guarantee of recovering lost assets, involving law enforcement increases the chances of identifying the scammer and potentially reclaiming some of your money.

3. Report the scam to CoinEx Support.

Including all details about the scam. Keep in mind that blockchain transactions are irreversible and anonymous, so while CoinEx Support will do its best to assist, recovery of defrauded assets may be challenging.

4. Notify to platform

Flag the scammer's profile on the website, app, or social media platform where you first encountered the scam. This helps protect others from falling victim to the same scam.

5. Be cautious with asset recovery services

Be wary of services that claim to help you recover assets, as these services may be operated by the same scammers. Before choosing any money recovery service, always do adequate research and verify its legitimacy.