Bitcoin Scams How to Recognize, Report, and Prevent Them

Numerous frauds using cryptocurrencies exist. Scammers are after your cryptocurrency just as they are for the money in your bank account, and they will stop at nothing to obtain it. Knowing when and how you’re targeted and what to do if you believe that a cryptocurrency and the communications surrounding it are fraudulent will help you secure your bitcoin investments.

Cryptocurrency scams: Types

Scams using cryptocurrencies often fall into one of two categories:

  • Actions intended to get access to a target’s bitcoin wallet app or authentication information. In other words, con artists strive to get data that would provide them access to a digital wallet or other confidential information, including security codes. In rare circumstances, access to actual hardware is also included.
  • Transferring bitcoin directly to a con artist via impersonation, phony company or investment offers, or other nefarious methods

Social engineering scams- Scammers manage crucial data pertaining to user accounts through psychological manipulation and deception in social engineering schemes. These frauds trick consumers into believing they are interacting with a reputable organization, such as a reputable company, tech support, a member of the community, a coworker, or a friend. In order to acquire the trust of a potential victim and get them to give keys or send money to the scammer’s digital wallet, scammers frequently use any strategy or take as much time as necessary.

Romance fraud- Dating websites are frequently used by con artists to dupe their victims into thinking they are actually in a committed relationship. After establishing confidence, discussions frequently shift to attractive cryptocurrency prospects and the eventual transmission of either money or account authentication credentials. Approximately 20% of the reported losses from romance scams were in bitcoin, according to the Federal Trade Commission.

Giveaway and imposter scams- Scammers also attempt to assume the personas of famous persons, corporate leaders, or bitcoin influencers as they go down the sphere of influence. In what is known as a giveaway scam, many con artists claim to match or multiply the bitcoin provided to them in order to attract the attention of potential targets. Well-crafted messages from what frequently appears to be an existing social media account may frequently engender a sense of legitimacy and urgency.

Phishing scams- Phishing schemes target information about online wallets in the context of the bitcoin sector. Private keys for crypto wallets, which are needed to access bitcoin, are of particular interest to con artists. Their approach is typical of many common scams: they send an email with links that direct recipients to a specially made website where they are prompted to enter private keys. If the hackers have this knowledge, they can take the cryptocurrency.

Extortion and blackmail scams- Email blackmail is another common social engineering technique fraudsters employ. Scammers threaten to disclose pornographic websites or other illegal websites visited by the user in such emails unless the recipient shares their private keys or sends money to the fraudster. These incidents reflect a criminal effort at extortion and ought to be reported to a law enforcement organization like the FBI.

How to recognize bitcoin scams

Scams involving cryptocurrencies may be quickly identified if you know what to look for. Detailed disclosure about the blockchain and related tokens is readily available for genuine cryptocurrencies.

Check out the white paper- A method is followed in the creation of cryptocurrencies. Prior to this procedure, a white paper is often released for public reading that specifies the protocols, blockchain, algorithms, and describes how the entire network will operate. Instead of doing this, the people behind bogus cryptocurrencies release “white papers” that are poorly written, include puzzling figures, explain how the money will be used, or generally don’t resemble a genuine white paper.

Recognize the team members- The members and developers that created the coin should always be listed in the white papers. Although this is usual for open-source, there are several instances where an open-source crypto project may not have identified creators. For conversation, some projects make use of forums and programs like Discord. The white paper is probably a fraud if you are unable to find any of these and it is full of errors.

Investigate the marketing- Using cryptocurrency is typically not a way to make money. They are projects with a specified objective and money or tokens designed to enable blockchain functioning. The next big thing you shouldn’t miss out on won’t be promoted on social media by legitimate bitcoin initiatives.
Reputable businesses employ blockchain technology to provide services.

The marketing has to look more authentic, even though they may use tokens to pay transaction fees on their blockchains. On their websites, all the information will be readily available, and they will have funds available for celebrity sponsorships and appearances.

How to avoid scams affecting cryptocurrency

To avoid getting conned, there are various things you may do. Avoid clicking any links, calling any numbers, contacting them in any manner, or sending them money if you see any of the warning indicators. Additionally:

  • Refuse inquiries for your private cryptocurrency keys.
  • Never believe claims that you will earn a lot of money.
  • Ignore investment managers that approach you and promise to increase your money rapidly.
  • If you’re utilizing an online dating service or app, meet your love interests in person before you give them money.
  • Don’t respond to texts or emails from well-known or obscure businesses claiming that your account has been locked or that they are concerned.
  • Pay little attention to job postings for crypto miners or cash-to-crypto converters.
  • Be skeptical of claims that they have explicit material of you that they want to publish until you provide bitcoin and report it.
  • Refuse “free” money or cryptocurrency.

By Hiren Gami

Hiren Gami is Digital Marketer and Blogger at Tech Gami. He has 9 years of experience in the SEO field. He has launched a blog Tech Gami to share and update the latest Technology information in the domains of Upcoming Mobile Phones, Technology News, Games, and Vehicle News as a whole.