Scammers are constantly on the lookout for new ways to steal money, and the huge expansion of cryptocurrencies in recent years has offered numerous opportunities for crypto scams. If you are interested in crypto, you should be aware of the bitcoin scams. Please continue reading to learn more about common bitcoin scams and how to avoid them.
Common Bitcoin Scams
There are numerous types of crypto scams. Among the most common are:
1. Fake Bitcoin Exchanges
In 2017, South Korean financial authorities and the local Bitcoin community exposed one of the most insidious Bitcoin scams: a fake exchange called BitKRX. It presented itself as part of the largest trading platform in the country and took people’s money.
To avoid this, you should stick with popular, well-known Bitcoin exchanges and Bitcoin forums so you get news of fakes quickly.
2. Ponzi Schemes
Bernie Madoff is perhaps the most well-known Ponzi schemer. He did it with mainstream investments. But the principle of a pyramid scheme, in which you take money from new investors to pay previous investors, can be applied to Bitcoin scams.
MiningMax, one such scheme, brought in $200 million before 14 fraudsters were arrested. As you can imagine, the investors never got any returns on their Bitcoin investments.
3. Fake Cryptocurrencies
A common scam is to present a new cryptocurrency as an alternative to Bitcoin. The idea is that it’s too late to cash in on Bitcoin and that you need to invest in one of these up-and-coming cryptocurrencies.
My Big Coin was shut down for this reason. The fraudsters behind My Big Coin took $6 million from customers to invest in the fake cryptocurrency and then redirected the funds into their personal bank accounts.
4. Old School Scams
If somebody emailed or called and said they were from the IRS and that you owed back taxes that had to be paid immediately, would you send them money? Many people do.
Instead of having the victim wire money via Western Union or transfer funds to a bank account, con artists are contacting victims and demanding that victims transfer bitcoins.
The best way to avoid this scam is to be skeptical of phone calls or emails that say they’re from a government agency. Legitimate authorities wouldn’t contact you that way, and they won’t ask for bitcoins.
5. Malware
Malware has long been a way for hackers to get passwords needed to access computer networks or steal credit card and bank account numbers. Now they’re using it to conduct another one of the most common Bitcoin scams. If your Bitcoin wallet is connected to the Internet, they can use malware to get access and drain your funds if you’re not protecting yourself from malware.
You can download malware by clicking links in your email. You can also download it from websites and social media. There might be a post, for example, where someone claims a certain program allows you to mine bitcoins for free. Download it, and you get malware.
