In the fast-moving world of decentralized finance (DeFi), scams are evolving as quickly as the tech itself. One of the most deceptive and dangerous is the honeypot crypto scam. If you’re new to trading tokens or even a seasoned investor looking for the next memecoin, understanding what a honeypot is could save you from becoming the next victim. A honeypot crypto scam is a type of smart contract trap. It allows users to buy a token, but silently blocks them from selling it, effectively locking up their funds. From the outside, everything looks functional: There is liquidity, price movement and transaction history. Still, once you buy in, there is no exit . You can purchase the token, but when you try to sell it, the transaction fails silently or is blocked. Your funds are locked in the contract, and the only wallet allowed to withdraw or transfer tokens is the scammer’s own. Honeypots are built using carefully engineered smart contracts, typically on Ethereum or BNB Smart Chain . Scammers exploit the flexibility of Solidity (the programming language behind Ethereum) to embed malicious logic into the token’s code. Some of the common tactics include: What makes honeypots especially dangerous is that even tech-savvy users can fall for them. Tools like Etherscan or BscScan may show the contract as verified, and price charts can display realistic activity. However, unless you review the smart contract code line by line or use automated auditing tools, the hidden trap can go unnoticed. In short, a honeypot scam isn’t just a bad investment; it’s a rigged game where the house always wins. Honeypot scams in crypto are designed to trap investors by using smart-contract trickery. They follow a three-stage process, and understanding how it works can help you avoid losing your funds. The scam begins when an attacker deploys a malicious smart contract on a blockchain like Ethereum or BNB Smart Chain. This contract is made to look like a normal token with liquidity, price charts and sometimes even fake community engagement. It may show up on popular DEX tools or be promoted in Telegram groups and X threads to gain trust. Like a baited trap, everything is carefully set up to appear safe and profitable. Once investors buy the token, the hidden restrictions in the contract kick in. These include disabling the sell or transfer functions for everyone except the scammer’s wallet. From the victim’s side, it looks like they made a successful purchase, but when they try to sell, the transaction silently fails. There’s no warning. No error message. Just locked funds. To outsiders, the token still appears active with “real” buyers, giving the illusion of a growing project. But in reality, every buyer is stuck. This phase exploits FOMO (fear of missing out) and social proof to attract more victims. Once enough people have invested, the attacker, whose wallet is the only one allowed to sell, dumps the tokens or withdraws the liquidity pool, cashing out the victims’ funds. Since no one else can exit, the token crashes to zero, leaving investors with worthless assets. The entire scheme is coded into the contract from the start. It doesn’t depend on market trends or team behavior; it’s a technical trap built into the blockchain. Honeypot scams in crypto aren’t one-size-fits-all. Scammers use different tactics to trap investors, all designed to look legitimate on the surface, but with no real exit once you’re in. Below are the most common types of honeypots: While both honeypots and rug pulls are deceptive crypto scams, they work in fundamentally different ways; recognizing those differences can help you avoid costly mistakes. Imagine entering a store that looks fully stocked, brightly lit and filled with customers. You pay for a product, but when you try to leave, the exit is locked and the staff vanishes. That’s a honeypot. Now imagine a different scene: You walk into a store, pay upfront for something the owner promises to deliver “soon.” But the next morning, the store is gone, signs, shelves, website, everything wiped clean. That’s a rug pull . Both are crypto scams, but they play out very differently. Here’s a comparison table highlighting the key differences between a honeypot and a rug pull: Not all crypto scams are onchain. Some start with hardware. A recent case exposed how a fake cold wallet sold via Douyin (China’s TikTok) became a modern-day honeypo t. The wallet looked factory-sealed but came preloaded with a private key secretly controlled by scammers. Once the user transferred funds, over $6.9 million was stolen within hours. These “honey traps” trick users with discounted prices and fake legitimacy. Behind the scenes, compromised devices and social media ads are being used to run professional-grade theft operations. Always buy wallets from trusted sources, initialize them yourself, and avoid third-party resellers. Today’s crypto threats go beyond code; they target convenience, trust and human behavior. Did you know? You can report Bitcoin scams easily using platforms like Chainabuse for global blockchain fraud or Scamwatch if you’re based in Australia. Honeypot crypto scams are designed to trick investors by looking like real opportunities. With a few checks, you can spot the red flags before you fall into the trap. Here’s how: This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.