Common Scams
TL;DR
Several cryptocurrency scams have emerged in the blockchain industry. Phishing, copy-and-paste malware, phishing mailings, Ponzi and pyramid schemes, and ransomware are just a few of the more popular forms of cybercrime.
Let's take a look at the most prevalent Bitcoin scams and how you can protect your bitcoin investments by avoiding them.
Common Bitcoin Scams
Blackmail
Threatening individuals with the exposure of private information unless they are compensated is a common tactic used by scammers. Bitcoin is the most common kind of cryptocurrency used for this type of compensation.
In order to blackmail, scammers either locate or fabricate sensitive information about you, and then use that knowledge in order to coerce you into handing over bitcoin or other types of money.
The greatest approach to avoid scammers blackmailing you out of your bitcoins is to be careful with your login credentials, the websites you frequent online, and the people you disclose your personal information to. Whenever feasible, utilize two-factor authentication to further secure your account. If the information they use to threaten you is untrue and you are aware of this, you may be safe.
Fake Exchanges
According to the name of the game, bogus crypto exchanges are phony ripoffs of the real thing. However, scams may also be distributed via desktop software or phony websites in addition to mobile apps. Because some fraudulent exchanges are quite similar to the actual ones, you need to be vigilant. In the beginning, they may appear to be real, but their purpose is to rob you of your money.
Traders and investors are drawn to these bogus exchanges by the promise of free cryptocurrency, reduced exchange fees, and even presents.
It's a good idea to save the original URL and double-check it before logging in to a bogus exchange to avoid getting cheated. Check the validity of URLs, Telegram groups and Twitter profiles with CoinGecko to Verify.
Verify the developer information, the amount of downloads, the reviews, and the comments when it comes to mobile apps. If you're interested in learning more, take a look at the list of common mobile-device scams.
Fake Giveaways
As a technique to con you out of a small amount of your cryptocurrency, scammers utilize fake freebies. Scammers will frequently ask you to send money to a bitcoin address in exchange for additional bitcoins (e.g., "send 0.1 BTC to receive 0.5 BTC"). The problem is that if you use these bitcoin transactions, you will not receive anything and you will never see your money again!
Fake gift scams come in a wide variety of forms. There are some scams that will ask for other cryptocurrencies, such as Bitcoin (BTC), Ethereum (ETH), and so on. They may ask for your private keys or other sensitive information in some instances. On Twitter and other social media platforms, scammers most typically use popular tweets, viral stories, or announcements to create fake giveaways (like a protocol upgrade or an upcoming ICO).
Avoiding phony giveaway scams is as simple as never entering a giveaway in which you are requested to provide something of value as a first step. Donations are not required to participate in legitimate raffles.
Social Media Phishing
Like bogus giveaways, social media phishing is a popular Bitcoin scam that you're likely to encounter. Scammers will construct an account that appears to be associated with a prominent figure in the cryptocurrency community (this is also known as impersonation). Next, they'll promote phony prizes on Twitter or through direct messages in chat.
Double-checking that the individual is who they say they are is the most effective approach to avoid getting conned by social media phishing. On Twitter and Facebook, for example, there are frequently blue checkmarks to indicate this.
Copy-And-Paste Malware
Scammers use copy-and-paste malware to steal your money invisibly. If you don't take precautions, spyware like this can take control of your clipboard data and send money to criminals.
Think about sending a BTC payment to your buddy Bob. As is customary, he provides you with his bitcoin address, which you can then paste into your own bitcoin wallet to complete the transaction. The scammer's address will immediately replace Bob's when you paste it if your device is infected with copy-and-paste malware. Scammers will receive your bitcoin payment as soon as it is submitted and confirmed, which means Bob will receive nothing.
If you want to avoid this type of scam, you must be extremely vigilant about protecting your computer. Be on the lookout for unusual emails or attachments that may be infected with malware or harmful links. Keep an eye out for the websites you visit and the apps you download. It's also a good idea to install an anti-virus program and run regular scans for potential dangers. Keeping your device's operating system (OS) up-to-date is equally critical.
Phishing Emails
Phishing can take many forms. Using phishing emails to fool you into downloading infected files or clicking on links that take you to a malicious website that appears to be legal is one of the most prevalent methods of spreading harmful code. This type of email can be especially harmful if it imitates a product or service that you regularly utilize.
Most scams contain a message that urges you to take action immediately to protect your account or assets. Your account information may be updated, your password reset, or documents may be uploaded. Their primary purpose is to obtain your passwords so that they can hack into your account.
Phishing email scams can be avoided by first verifying that the emails are coming from the legitimate source. If you're unsure, you may always call the company directly to verify that the email you got was sent by them. Second, by hovering your mouse over the email links, you can see whether any of the URLs include typos, strange characters, or other anomalies.
The links should not be clicked even if there are no red flags. In the event that you need access to your account, you should use a different method, such as inputting the URL manually or saving it to your browser's favorites.
Ponzi and Pyramid Schemes
In terms of financial fraud, the Ponzi and pyramid schemes are among the oldest. An investing plan known as a Ponzi scheme is one in which new investors' money is used to pay out profits to previous investors. Money stops flowing when the scammer is no longer able to attract fresh investors. A notable example of a cryptocurrency Ponzi scheme was OneCoin.
Business models that compensate members based on the number of new members they bring in are known as pyramid schemes. The money stops flowing when there are no new members to enroll.
Make sure you perform your due diligence before investing in any cryptocurrency — whether it's an altcoin or Bitcoin. Ponzi schemes and pyramid schemes rely solely on new investors or members joining in order to maintain the value of a cryptocurrency or Bitcoin fund.
Ransomware
It's a sort of malware that keeps users from accessing important data on their computers and mobile devices unless they pay a ransom (usually in BTC). At the same time, hospitals, airports, and other public institutions are prime targets for these types of attacks.
In most cases, ransomware will encrypt and encrypt important files and databases, and then threaten to wipe them unless a ransom is paid. It's unfortunate, but there's no way to know if the assailants will keep their word.
Ransomware attacks can be prevented by following a few simple steps:
Install an antivirus and keep your operating system and applications updated.
Avoid clicking ads and suspicious links.
Be wary of email attachments. You should be extra careful with files that end with .exe, .vbs, or .scr.
Backup your files regularly so you can restore them if you get infected.
Closing Thoughts
Many Bitcoin frauds are out there, so be on the lookout. As a first step, it is necessary to understand how these scams work. To keep your Bitcoins safe, you need to avoid the most typical Bitcoin frauds.
Last updated
Was this helpful?
