Some signs include pressure to not miss an opportunity, contacting you and asking for your private keys, or building a relationship with you before asking for cryptocurrency to help them. There are many scams, and more are being created—they are becoming increasingly sophisticated and realistic. Make sure to keep yourself up-to-date on all of the current scam tactics being used by reading about them on official channels. Before this process, there is generally a document published, called a white paper, for the public to read.
This mythical “once-in-a-lifetime” opportunity can lead people to transfer funds quickly in hopes of receiving an instant return. Impersonators claiming to be from the cryptocurrency exchange’s support or security teams also contact crypto owners to trick them crypto events calendar out of funds. In the case of phishing cryptocurrency scams, the false request for payment is in the form of cryptocurrency. The messages might even be from a cybercriminal posing as a cryptocurrency company touting an initial coin offering (ICO) to appear authentic.
Similarly, scams will often have thousands of likes, views, retweets or other types of social proof. After seeing all the apparently free money being given away, victims race to send money to the scammers before they have time to think it over. This has led to the rise of fake ICOs which, with some slick marketing and a little bit of hype, can convince people to buy a cryptocurrency that doesn’t actually exist. For example, one report found that 78% of ICOs in 2017 were scams, while a separate report put that figure at above 80%.
Since computational power is the main resource involved in cryptocurrency mining, it makes sense that it’s now a hot commodity for thieves to get their hands on. Enter malicious crypto-mining, or “cryptojacking,” where hackers exploit users’ computational power through malware. The malware is typically spread by a trojan virus, making a user’s computer part of a larger botnet that combines the computational resources of several victims to mine bitcoin.
Fake giveaways
In some cases, they may ask for your private keys or other sensitive information. Typically, these fake exchanges will attract crypto traders and investors by offering free cryptocurrencies, competitive prices, low exchange fees, and even gifts. Let’s briefly discuss each of them so you can learn how to avoid the most common Bitcoin scams and keep your cryptocurrency holdings safe and sound. According to the FBI, more than 300,000 people fell victim to phishing scams in 2022 and 298,000 in 2023. Collectively, those people turned over $52.1 million to scammers in 2022 and more than $18.7 million in 2023. Norton 360 with LifeLock Select can help protect your devices and personal information from scammers and stop malicious software before it can do harm.
How To Spot Cryptocurrency Scams
In 2017, crypto exchange Poloniex was the target of a sophisticated scam that saw at least three fraudulent Poloniex trading apps listed on the Google Play store. We’ve listed out some of the most common Bitcoin and other crypto scams it’s a good idea to have on your radar. Chances are if you’re about to get get scammed, someone has been there before you. Check for authentic positive reviews about any services you’re going to use.
What is cryptocurrency?
While there might be some legitimate bitcoin investment funds available, there are definitely some some scam ones too. Notably, many companies have been accused of utilizing business models that resemble classic pyramid or Ponzi schemes. As such, it’s fairly difficult for the average person to get started with (and make profitable). Instead, people are investing in large mining companies, or using cloud mining services in an attempt to turn a profit.
In September 2017, ScamBitcoin called out the scam, reporting that the company was promising unattainable daily returns of 4% to bitcoin investors, supposedly funded by its mixing operation. The Bitpetite site was gone by November 2017, but it’s unclear how much money was lost by investors during the time it was running. One in particular was Austrian investment scheme, Optioment which reportedly stole 12,000 bitcoins from more than 10,000 victims.
- Generally, any unsolicited opportunities that come to you with “guarantees” or “promises” for you to make money are a get-scammed-quick opportunity.
- Scammers often use dating websites to make unsuspecting individuals believe they are in a real relationship, whether a new or long-term one.
- Specifically, scammers need a crypto wallet’s private keys—a string of letters and numbers that act like a password and are required to access cryptocurrency.
- Assailants reportedly attacked a cryptocurrency investor with a knife and forced him to hand over around 100 bitcoin, worth about $1 million at the time.
- A Business Insider investigation reportedly uncovered these scams taking place on two exchanges in particular, Bittrex and Yobit.
What’s more, users are extra keen to get in on the action so they don’t miss out on the next big thing. With crazy volatility in the markets, promises of large returns don’t seem that far-fetched. Combined, these factors can lead to some poor decision-making and people falling for scams more easily.
Yet, anyone who’s studied these periods knows that many speculators lost it all while trying to get rich. For example, they might send you an email or text saying a withdrawal was initiated and give you a link to cancel the transaction. Fifteen minutes later, the price was hovering around the $30 mark once again, after early buyers “dumped” and ran.
Some of the most popular exchanges include Bitstamp, Bitfinex, and Coinbase. Since the cryptocurrency field is so new, all exchanges can pretty much be considered relative newcomers. To spot a Bitcoin scammer, watch for red flags like unrealistic promises of high returns, requests for upfront payments, or pressure to act quickly. Scammers often use social media or email to impersonate trusted figures or organizations. Always verify the legitimacy of any Bitcoin-related communication or offer before engaging. The following real-life stories of Bitcoin scam victims highlight the emotional and financial impacts of such frauds, offering insights into the diverse tactics used in cryptocurrency fraud cases.
This cloak of invisibility makes it exceedingly difficult to trace and identify scammers, giving them a significant advantage over their victims. Bitcoin scams present a unique challenge, distinct from traditional fraud in several key ways. Understanding these differences is crucial in learning how to spot a Bitcoin scammer. Just like with any other industry phishing is among the most common type of scam in the crypto industry.