Last updated on April 3rd, 2023 at 08:55 pm
Since the introduction of Bitcoin and cryptocurrencies in general, there have been reports of several scams which involves millions of dollars. Some of the most common Bitcoin scams include fake websites, blackmail, fake mobile apps, email scams, giveaway scams, and social media phishing.
2020 recorded massive scams of over 86 attacks and the attackers went away with over half a billion dollar worth of cryptocurrencies. There were far more recorded crypto scams in 2020 compared to 2018 and 2019.
In 2021, the number increased exponentially with over $14 billion worth of cryptocurrencies stolen. As people become more aware, new styles of scams are springing up daily and if you are not careful, you can lose your entire savings to these guys.
In this article, we will discuss some of the common Bitcoin scams and 5 different ways to avoid them. If these scammers manage to trick you into making mistakes when attempting a Bitcoin transaction, they may end up stealing your Bitcoin and it might be virtually impossible to recover your stolen assets or get to the scammers.
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It might be important to know that these scams are not just for Bitcoin alone, there have been several successful scams and attempts on other crypto assets. NFT scams are also on the rise too. Generally, you should be very careful when doing crypto transactions. Let’s get right to it.
6 Common Bitcoin Scams
Bitcoin and cryptocurrency scams come in a similar format, first, they will trick you into getting access to your wallet by getting your private information like security codes or private keys. And then they move on to transfer or steal cryptocurrency directly from your wallet.
Some of the common Bitcoin scams include:
- Fake websites
- Blackmail
- Fake mobile apps
- Email scams
- Giveaway scams
- Social media phishing
1. Fake Websites
As a new crypto user, it might be difficult for you to identify fake websites and differentiate them from legit ones. Many of these websites are designed in such a way that it looks very real and sometimes they go as far as cloning original websites.
They promise you huge profits with big investment opportunities, and also in crypto mining. The steps to invest may be easy, but it will practically be impossible to withdraw your earnings as the scammers run away with all the money and further shut down the website.
The main purpose of this type of scam is to gather as much investment from naïve people as possible and then shut down, rinse, and repeat the process with a new domain.
2. Blackmail
Blackmailing in cryptocurrency is not entirely popular, but there have been recorded cases in the past. In this type of scam, perpetrators fabricate information about you and threaten to release them if you don’t comply by sending them Bitcoin payments.
They opt for payments in crypto because it helps them remain anonymous with the transaction. They can get your information like your email when you sign up to their websites or use any of their fake products unknowingly.
The pressure from this type of scam might lead you to send them whatever amount of Bitcoin payment they want.
3. Fake Mobile Apps
This is almost similar to the fake website scam, only in this one, they don’t make use of the web, instead, they introduce mobile applications. This has become a rather popular way to trick and scam people of their crypto assets.
The app is developed in such a way that it resembles the original and then they trick you into believing you are using the real mobile app. This scam aims to trick you into releasing your crypto keys to gain access to your digital wallet.
When they gain access and control over your crypto wallet, they can make away with whatever amount of Bitcoin and other cryptocurrencies you have saved up.
Poloniex, a popular cryptocurrency exchange app fell victim to this kind of scam. The scammers developed a fake app that looked just like Poloniex and lured more than 10,000 users to download it and possibly jeopardize their savings before they could notice.
4. Email scams
Today, emails are one of the best and easiest ways to communicate and reach out to potential clients or customers in any business. The scammers send fake emails to people, making it look like it is from a reputable and legitimate source.
In this type of email, the purpose is to give a sense of urgency, luring you to make a quick decision in sending them crypto payments. For example, they can send an email about a limited offer on a product or an investment.
Without proper research and observation, you might end up sending Bitcoin or other cryptocurrencies to them. With the introduction and rise in crypto-based investments like NFTs (Non-fungible tokens) and ICOs (initial coin offerings), there are more ways now for scammers to gain access to your crypto.
5. Giveaway scams
Everybody likes a good giveaway. It’s always nice when you get a valuable thing for no price at all. These types of scams come across to you in form of adverts on social media like YouTube, Twitter, Facebook, Instagram, and other social media platforms.
They once again portray a sense of urgency in this one with a limited offer time stamp and promise to multiply or match the amount of cryptocurrency sent to them. They come across to you as a once-in-a-lifetime opportunity.
It might be difficult to tell this scam since so many legit giveaways have been done on social media as well, this is why it is always advised to do your extensive research before you engage.
6. Social media phishing
This is a common Bitcoin scam that you will most likely find on social media just like the giveaway scams. Scammers create social media accounts, impersonating someone popular in the cryptocurrency space.
The next thing they do is create fake giveaways and share them via tweets or direct messages. They offer you an amount of cryptocurrency if you participate in whatever they are promoting on those platforms.
In 2021, Elon Musk impersonators scammed over $2million worth of cryptocurrencies from users. There are other recorded cases like people impersonating Vitalik Buterin, co-founder of Ethereum, especially since the announcement and successful completion of the Ethereum Merge.
5 Ways to Avoid Bitcoin Scams
Bitcoin scams may be increasing almost daily, but you can take some measures to be aware and how to avoid them.
Below are some of the ways you can avoid Bitcoin scams:
- Do a proper research
- Protect your digital wallet private keys
- Avoid social media ads and Google ads
- Protect your business
- Ignore cold emails
1. Do a proper research
This particular advice can never be overemphasized. When you get offers in form of emails or direct messages, it is proper and advisable to do extensive research on the supposed platform or individual sending it.
Take some time to properly research instead of investing your money right away. If they come with a social media account, go further to look for that account across other social media platforms and confirm how legit it is.
If they come at you with a familiar name or familiar website domains, go ahead and do some google search to confirm if there is an actual offer from that project.
2. Protect your digital wallet private keys
As you already know, your private key is access to your digital wallet. Scammers getting a hold of this will most likely mean that you are going to lose most or all of your crypto assets.
Under no circumstance should you share your private key with anyone? If a person or company requests you to send your private keys to participate in a form of giveaway or any other type of investment, it is most likely a scam and you should avoid them.
3. Avoid social media ads and Google ads
Many scams are brought to you through social media ads and even Google ads. In 2021, some reported fake and impersonating websites purchased Google ads campaigns to lure crypto enthusiasts into investing in fake opportunities.
Eventually, these scammers were able to steal cryptocurrencies worth over $500,000. Only engage with ads from trusted crypto platforms and once again, do your research to determine which platforms are legit before you engage.
4. Protect your business
If your business is not properly protected, scammers can impersonate your enterprise and lure your customers into paying in Bitcoin for selling counterfeit products to them. This in turn can spoil or damage the reputation of your organization.
However, there are several business impersonation removal software available that you can use to protect your business. This software alerts you if your business is compromised by scammers. They can help to find and remove any impersonation attempts and also prevent any online theft.
5. Ignore cold emails
A cold email can be described as the first email sent to a receiver to catch their attention and get benefits in terms of sales or other opportunities.
If you are contacted out of the blue about an opportunity like a crypto investment opportunity that feels too good to be true, it is most likely a scam. Never log in to your digital wallet through links from suspicious emails because you just might be giving access to your wallet unknowingly.
Final Thoughts
While cryptocurrency adoption is becoming increasingly popular, it has become very important to protect yourself and your businesses against attacks.
Furthermore, it is also important to do proper research on products and offers before engaging as it is almost impossible to recover stolen funds from your wallet.
With the above advice followed properly, it will be difficult for you to fall prey to these scams.
Victor Swaezy
Victor Swaezy is a crypto-journalist with more than 3 years of experience in covering blockchain technology and digital currencies news. Known for his comprehensive reporting, Victor has contributed to leading industry publications such as Coinfomania and Crypto News Guru, providing market participants with the required knowledge to make informed decisions. When he is not working, he loves to watch movies and have a good time.