Bitcoin scams are like a box of chocolates. You never know what kind you’re going to get.
The number of bitcoin scams has been rapidly rising. As the saying goes by the future of the world is cryptocurrency. But are we sure our crypto is safe and privacy is intact in the world of cryptocurrency? We’ve been familiar with many crypto scams like the Mt.Gox scam, Twitter hack, etc.
We cannot run from scams but we can be familiar with the different scam services. The goal is to make blockchain safer to use for everyone by exposing scammers who abuse it. I’ve listed some of the mixers which are claimed to be scammed by many users.
Here are the Bitcoin scams that you should be on the lookout to avoid.
Fake Bitcoin Mixers
There are many online platforms that provide mixer services for those looking to conceal their cryptocurrency transactions. There are also a number of online guides that users can read to learn how to mix their own cryptocurrencies.
Cybercriminals and scammers have managed to find a way to take advantage of these mixer services to scam cryptocurrency holders looking to conceal their transactions and identity online.
A very popular site for mixing bitcoin on the internet directs users to a number of phishing sites that have been known to deceive users of their bitcoin leaving them no recourse to retrieve their stolen funds.
Here is a list of fake Bitcoin Mixers which are scam sites:
The scammers use similar domain names which the original services use and promoting their fraudalent websites throught search machine SEO and social media.
Fake Bitcoin Investing Scams
Bitcoin is an abstraction of an abstraction. It’s a store of value that not only doesn’t take any physical form, but also lacks any backing by the full faith and credit of a sovereign government.
Enthusiasts find these aspects of cryptocurrency deeply appealing. Many Bitcoin investors believe the less government involvement in money, the better. Others prefer to engage in financial transactions that are hard to trace by the authorities.
Unfortunately, these are also big advantages for scammers who set up fake websites purporting to offer new investors the chance to make a quick buck. This is what happened to one victim of a 2017 scheme from Australia.
The man, whom ABC Everyday identified as Jonathan, saw an Instagram post that advertised the chance to make a 50% return mining for Bitcoin. He initially sent the site $50, and soon thereafter got $30 back in profit.
Moreover, the Instagram account was full of testimonial videos and other folks endorsing the service, and had thousands of followers. It looked legitimate.
He then prostelyzed his newfound opportunity to friends and family. All in all, Jonathan, his family and friends chipped in about $20,000. Then the account disappeared, and the thief with it. Not only did he lose his money, but some of his friends no longer speak to him.
The entire cost of these types of Ponzi-style Bitcoin scams can be enormous.
“Many people have reported being lured to websites that look like opportunities for investing in or mining cryptocurrencies, but are bogus,” per the FTC. “Sites use fake testimonials and cryptocurrency jargon to appear credible, but promises of enormous, guaranteed returns are simply lies.”
How to Recognize Bitcoin Scams
It’s easy to look at these individual cases and marvel at how foolish the victims seem to be.
Why was Mike listening to a woman he’d never actually met and agreeing to invest hundreds of thousands of dollars? How could anyone give away $500,000 worth of Bitcoin to a business partner without at least picking up the phone to discuss the deal? How could someone believe that they could get a guaranteed 50% return?
The problem is that it’s easy to lose your skeptical faculties when you feel like you’ve met your future spouse, you’re chatting with who you think is a close partner or you believe you’ve found a sure thing. It’s easy to lose sight of red flags when these confounding factors cloud your judgment.
That’s why it’s important to keep a few rules of thumb in mind whenever someone you’ve never actually met comes to you with a chance to make money in Bitcoin.
- Don’t believe the hype. Any claim of a guaranteed return, especially a very sizable guaranteed return, should always be treated as a scam. There are practically no legitimate investments that can double your money in a week or a month, or even a year, as Bernie Madoff’s victims can attest. Likewise, ignore any claim that your Bitcoin investment can be “multiplied.”
- Bitcoin for Bitcoin’s sake. The reason why Bitcoin has risen so dramatically in value recently is because genuine investors believe they can sell it to someone else for a higher price at a future date. That’s what makes crypto a highly speculative investment. Always ignore “investment opportunities” that claim to be helping you get in on special or rare deals that involve Bitcoin.
- Obsessed with Bitcoin. Let’s say you meet someone online, and they really want you to invest in Bitcoin. They’re almost certainly lying to you. Meanwhile, the government–especially the Social Security Administration–doesn’t track you down and demand instant crypto payments. If you’re dealing with someone who is demanding that you adopt Bitcoin in some fashion, disengage and call the cops.
If you suspect that you’ve been the target of a crypto scam, file a report with the FTC. When you share information about Bitcoin scams, it can help the FTC investigate fraud methods and keep Americans aware of new scams.