Crypto fraud & scams: what every Hercle client should know

A client awareness guide from Hercle

As a Virtual Asset Service Provider (VASP), Hercle operates under strict regulatory obligations to safeguard your digital assets. But technology alone cannot protect you if fraudsters target you directly. This article explains the most common crypto-specific scams, how to recognise them, and what to do if you are approached.

Why crypto is a prime target

Crypto-asset transactions are fast, global, and — in most cases — irreversible. Once funds leave your wallet to a fraudulent address, recovery is nearly impossible. This makes crypto particularly attractive to criminals.

As your VASP, Hercle never initiates unsolicited contact asking you to move, transfer, or reveal credentials related to your holdings.

Common crypto scams

1. Pump-and-dump and rug pull schemes

You encounter an advertisement — often on social media or messaging apps such as Telegram or WhatsApp — promoting a 'limited-time' investment in a new crypto token promising high, rapid returns. You are encouraged to invest a small amount first, then larger sums.

What actually happens: the scammers artificially inflate the token price, sell their own holdings at the peak, and the value collapses — leaving you with worthless assets. In a rug pull, the project is shut down entirely and the funds disappear.

⚠️ Red flags to watch for: guaranteed returns, urgency to invest now, unsolicited contact via messaging apps, unknown token or exchange platform, no verifiable track record.

2. Impersonation scam (seed phrase / private key theft)

After posting a question online about a wallet or platform issue, you receive a direct message from someone claiming to be customer support — from Hercle, a known exchange, or a trusted provider. They ask for your seed phrase (the list of words that unlocks your wallet) or your private keys.

What actually happens: anyone who has your seed phrase or private keys has full, permanent control of your assets. This loss is irreversible.

🚫 Critical rule: Hercle will NEVER ask for your seed phrase, private keys, or passwords — not by email, phone, message, or any other channel. No legitimate institution ever will.

3. Phishing

You receive an email, pop-up, or social media message appearing to come from Hercle or a known crypto platform, warning of a security issue and asking you to click a link, download an app, or scan a QR code. The destination site looks identical to the real one.

What actually happens: you install malware or surrender login credentials. The fraudster then empties your account.

✅ How to verify: always access Hercle services directly via the official URL you have previously verified. Never follow links in unsolicited messages. Check for HTTPS and exact spelling of the domain.

4. Giveaway scams

An announcement on social media — often featuring the name or image of a well-known brand or celebrity — claims that sending a small amount of crypto will result in double the amount being returned. The website and materials look professional.

What actually happens: there is no giveaway. Your sent funds are gone permanently.

5. Wallet poisoning (look-alike address)

You notice a new address in your wallet transaction history that closely resembles one you have used before — differing by only a few characters, often in the middle of the string. Scammers deliberately send a tiny amount to your wallet from a fake look-alike address so it appears in your history and auto-suggestions.

What actually happens: if you copy the wrong address from your history and send funds, the money goes to the scammer and is permanently lost. This scam exploits the habit of copying and pasting without verifying the full address.

✅ Best practice: always verify the complete wallet address — character by character — before confirming any transfer. Do not rely on address history or auto-fill.

6. Romance investment scam

Someone contacts you via social media or a dating app, builds a relationship over weeks or months, then introduces a 'highly profitable' crypto investment opportunity. They guide you through setting up an account and making an initial deposit to make the scheme appear legitimate.

What actually happens: the scammer extracts as much money as possible before disappearing. The investment platform is shut down. Your personal information may also be used for identity theft.

7. Ponzi scheme

You are invited into a crypto investment project promising consistent high returns, often with a referral or multi-level structure where you earn rewards for recruiting others. Early participants receive apparent payouts, making the scheme look credible.

What actually happens: returns are funded by new entrants, not real profits. When new investment slows, the scheme collapses and funds are lost. Victims often unknowingly become promoters.

Steps to protect yourself

1. Pause before acting. Scammers deliberately create urgency. Take time to verify before transferring any funds or sharing any information.

2. Protect your credentials. Never share your seed phrase, private keys, or passwords with anyone — including entities claiming to be Hercle.

3. Verify addresses. Check all wallet addresses character by character before confirming transfers.

4. Use official channels only. Access your account via the URL you have independently verified. Do not follow links from unsolicited messages.

5. Check authorisation. You can verify if a crypto provider is authorised in the EU via the ESMA register. Report suspicious platforms to your national financial authority.

6. Secure your devices. Enable multi-factor authentication on all your accounts and keep your device software up to date.

7. Limit public exposure. Do not share details about your holdings, transactions, or investment activity publicly.

Hercle security note

Hercle operates as a regulated VASP and applies institutional-grade custody and security protocols to your crypto and fiat assets. Our team will never contact you out of the blue to request fund movements, credentials, or personal data.

If you receive any communication claiming to be from Hercle that feels unusual, contact us immediately through your verified relationship manager or official portal.

If you suspect you have been targeted

1. Stop all contact with the suspected scammer immediately.

2. Do not make any further transfers.

3. If your wallet is compromised, move remaining assets to a new, secure wallet.

4. Revoke suspicious smart contract permissions using a trusted permission checker.

5. Contact Hercle through official channels without delay.

6. Report the incident to the police or your national financial supervisory authority.

⚠️ Beware of 'recovery room' fraud: if someone contacts you claiming to recover your lost funds for a fee, this is almost certainly another scam.

Still have questions? Contact our team through the official Hercle portal or reach out to your relationship manager directly. You can also contact us at matteo@hercle.com or risk@hercle.com.