5 Crypto Mining Scams Explained

Cryptocurrency mining has become an incredibly popular venture over the past few years, with millions of individuals worldwide looking to make a profit from securing blockchain networks. But, as is often the case in the tech realm, when something becomes popular, cybercriminals quickly look for ways to exploit unknowing victims. So, which crypto mining scams should you be aware of?

1. Cryptojacking

hooded person using laptop

Cryptojacking is a fairly sophisticated form of cybercrime that involves using other people’s hardware to mine cryptocurrency. In such a scenario, the attacker will infect various victims’ devices or specific mining hardware to mine crypto for their own profit.

Cryptojacking often requires the installation of malware onto a targeted device. This could be done via a website download, email attachment, phishing, or a similar tactic. Once the cryptojacking malware is deployed on the device, it can either be activated unknowingly by the victim or can auto-execute. When this happens, the attacker is free to mine crypto on the victim’s device without their knowledge. By doing this, the attacker can dodge the upfront and ongoing costs of mining crypto, while still reaping all the rewards.

You can think of larger cryptojacking operations as a sort of botnet, something you will also see in DDoS attacks and spam campaigns. This is because a more widespread cryptojacking campaign will use multiple infected devices to mine cryptocurrency.

The key telltale signs of cryptojacking include slow device performance, overheating, crashes, and unusually high power consumption. If you’ve noticed some or all of these symptoms on your device, run an antivirus scan or get in touch with a cybersecurity expert.

2. Cloud Mining Scams

malicious attacker in the cloud

Crypto mining hardware can be very expensive, with certain products reaching tens of thousands of dollars in price. Because of the cost of crypto mining hardware, the venture has been made inaccessible to many. This has given way to something known as cloud mining.

Cloud mining involves a user paying a platform to mine cryptocurrency on their behalf. In such a scenario, the customer will pay a monthly fee for use of the service’s mining hardware. Whenever a block is mined, the user gets a cut of the reward. This allows people to mine cryptocurrency indirectly, cutting out the steep upfront costs of hardware.

But the cloud mining market has been infiltrated by cybercriminals, particularly through phony websites. These sites will claim to offer healthy cloud mining rewards at competitive prices, when in reality, the operator’s goal is to take your cloud mining fees without offering a single cent in return. A fake cloud mining site could also take your personal data, such as your email address or payment information, and exploit it for their own benefit.

When it comes to cloud mining, scams are incredibly rife, so it’s always worth researching a given cloud mining platform before providing it with any information or payment.

3. Fake Mining Pools

various crypto coin logos in swimming pool

Mining pools are a popular choice among crypto miners. These consist of large groups of miners who pool their hash rates to increase the chance of mining a block and earning the block reward.

To join a mining pool, you’ll often have to pay an ongoing membership fee. The luxury of having a huge combined hash power is what calls for this fee, which varies from pool to pool. When a block is mined, the fee is split between members, sometimes equally, sometimes proportional to how much hash power they dedicated to the pool.

There are many reputable mining pools out there today, but with these legitimate options come numerous scam pools designed to con users out of their money and hash power. Over time, cybercriminals can squeeze a lot out of a potential victim, using their hash power to mine crypto for their own profit, and pocketing their ongoing fees.

Phony mining pools can look entirely trustworthy on the surface, so it’s important to do a little research on the top mining pools for your chosen cryptocurrency so that you can see the general consensus.

4. Faulty and Fake Mining Hardware

close up shot of gpu mining rig

Buying mining hardware online can be a risky ordeal. Some hardware vendors have poor customer support, long shipping times, and high price points, while others are purely designed to con victims. Because mining hardware, such as ASIC miners and GPU rigs, can be so expensive, scam websites stand the chance of stealing thousands of dollars per victim, if not more.

Like any scam website, the basic goal of phony mining hardware sites is to grab your data and funds without offering anything in return. However, some sites may send you hardware that is degraded or entirely different from the product description. Either way, you could lose huge amounts of money through these retailer scams.

To determine if a website is malicious, you can try running the URL through a link checker to see if it is deemed dangerous. On top of this, you should check the website for repeated spelling and grammatical errors, as this is common on scam pages. You can also check the reviews of the site (on an external review site, not the website itself) to see what other customers are saying about the service.

5. Mining Coins With Extremely High Rewards

Illustration of a hand out from computer to grab dollar bill

Mineable coins can become incredibly popular if designed and marketed correctly, and cybercriminals have noticed this. This has given way to scam mining coins. The lure of higher mining rewards can easily trick miners into signing up, increasing the overall demand for the coin, and often boosting its price. This can be great news for the developers, especially if they’ve held back a large portion of the coins for themselves to sell when the price shoots up.

But if you are dealing with a scam mining coin, there’s a good chance that you’ll end up forking out hash power for little to no monetary return. Such scams often result in miners getting rewarded far less than what was advertised, and cybercriminals may even choose to steal any data you provided upon signing up. You should also look out for unusually high fees, as this could be an indicator of a scam.

Crypto Mining Scams Are Dangerously Rife

As more people continue to delve into the crypto mining space, cybercriminals continue to look for new ways to exploit unknowing victims. This is why you need to be aware of the most common crypto mining scams out there today so that you know how to steer clear of them and keep yourself safe.