Common Bitcoin Scams – Beware Of Fraudsters

Fake Cryptocurrency Exchanges

One of the most prevalent scams is the exchange of bitcoins. Even though a decentralised network manages Bitcoin, investors continue to buy or sell the cryptocurrency for exchanges.

Investors will be excited to have an exchange and may believe any source promising an exchange for their Bitcoins, but later they will realise that it was all a trap to steal their money.

This scam is complicated to find out. You have to think twice before moving with such a type of exchange. This scam leads to the loss of all your funds unexpectedly.

Fake ICO

ICO (Initial Coin Offerings) is in trend among all organisations to raise their capital fund to kickstart their business. When investors look for considerable gains, they go behind this fraudulent ICO. With the advent of blockchain technology, many organisations are in the digital market of cryptocurrency with innovative ideas.

They begin their own business by offering the ICO. And these opportunities provide the space for fraudsters to hack the investor’s Bitcoins. Plenty of scammers are available with this fake ICO. They produce a false website and ask investors to deposit their Bitcoins into the fake wallet.

Ponzi Schemes

This scheme can be identified easily, but still, people go behind this scheme. If any crypto project motivates an unreasonable and illogical high return on investment, clearly note that it is a Ponzi scheme. It acts like a pyramid scheme. It encourages investors to recruit new investors. The fund of new investors is taken to pay the old investors.

Phishing Scams

Phishing scams are yet another type of common scam among the bitcoin scams. Here the hackers will try to get your data, like user credentials, through Email. An email scam is a type of Phishing Scam.

When scammers get access to a username and password, it is easy for them to hack your Bitcoins from a hardware wallet.

Pump and Dump Scam

Pump and dump have been a traditional scam, but now, it has become one of the standard Bitcoin scams. Here, a group of fraudsters will purchase a stock of currency; as a result, the supply is reduced, and the demand is increased.

Now the price of the currency will be inflated, and the fraudsters will be in search of investors of Bitcoin investment. They guarantee to provide the stock with a lower price than the going rate, and investors fall for such scams.

Rug Pull Scams

A Rug pull is very much similar to ICO scams. In that, a highly anticipated cryptocurrency project turns out to be vaporware that doesn’t exist. To generate interest and attract investors, it may be common to see a cryptocurrency “aped” on social media or in crypto communities by founders or developers.

Then, the originator or developer vanishes with the money from investors. In other words, investors have the rug pulled out from under them. These kinds of scams are relatively common in cryptocurrency because it doesn’t take much for a scammer to create enthusiasm, especially if they’re somewhat of a showman.

Man-in-the-Middle Scams

A man-in-the-middle scam requires a third party to intercept information between an investor and their exchange or another investor. The scammer can access sensitive information, like passwords or wallet keys, and uses them to swipe your assets.

These scams are carried out by scammers using technical ruses and wireless internet signals. Although these are not typical scams, many investors could nonetheless be at risk.

Social Media Giveaway Scams

Endless frauds run fake Bitcoin giveaways on Facebook, Instagram, and other social media platforms. They send fake screenshots with fake messages from famous companies or celebrities like Elon Musk promoting the giveaway. Both accounts are with flocks of fraudulent posts, seemingly confirming their legitimacy.

The worst thing that can happen is that you wind up clicking a malicious link, scanning a fraudulent QR code, or entering your account information on the fraudulent site, which can result in a significant loss of money.