20 Bitcoin scams and how to spot and avoid them ( 2018 Updated )

20 Bitcoin Scams and How to Spot and Avoid them in August, 2019

Bitcoin fraud, similar to some other investment fraud, comes in different shapes and sizes. Here are a few common types of scams that you should know about:

In December 2017, the executive of the US Securities and Exchange Commission (SEC) issued an announcement about the absence of investor insurance for those purchasing digital forms of money.

A number of concerns have been raised regarding the cryptocurrency and ICO markets, including that, as they are currently operating, there is substantially less investor protection than in our traditional securities markets, with correspondingly greater opportunities for fraud and manipulation.”



The Most effective method to Avoid Bitcoin Scams

In the event that you are using Bitcoin or are hoping to begin using it, here are the most well-known Bitcoin scams you have to keep an eye out for:

All in all, the question is, how would you recognize these scams and maintain a strategic distance from them out altogether? While we can’t escape fraud schemes for the last time, here are basic approaches to shield yourself from Bitcoin fraud.


The ‘Guaranteed High Returns’ Ponzi/pyramid Scheme

A Ponzi scheme works by drawing in individuals with guarantees of multiplying their investment in medium-term. It’s pain free income with negligible effort, however you should exchange Bitcoin to them first as a store. You are given high-loan costs and your underlying deposit will increment once new financial specialists pour in.

Essentially, you are paid using the cash new financial specialists bring into their framework. This works out before all else, be that as it may, when new investors never again purchase in, the framework breakdown and you lose your cash.

Special Instructions to Avoid from Ponzi/Fraudulent business models:

  • Pay special attention to cryptocurrency projects that urge you to recruit new investors to appreciate greater benefits.
  • Never trust a plan that guarantees returns that sound pipe dream.


Crypto Trading Bots Scams

It should be noticed that trading bots can without much of a stretch end up being frauds. This has been an especially normal issue with trading bots in the forex space however has likewise influenced the digital money space.

For instance, late in 2017 network individuals cautioned about a bitcoin exchanging bot called Hexabot.

Hexabot first stopped withdrawals from its stage and after that close down its site in what seems, by all accounts, to be a leave trick by the platform’s proprietors.



Fake Bitcoin Wallet Scam

Much the same as your standard wallet, a Bitcoin wallet is a virtual space where you store your Bitcoin cryptocurrency using a software program.

This gives the Bitcoin client anonymity and security when transacting online.

Be that as it may, fake Bitcoin wallets have malware planned to take your passwords and take your Bitcoin once you achieve a certain limit.



Bitcoin Exchange Scam

To purchase Bitcoin, you should connect your credit card with your Bitcoin wallet so you pay its proportional in real money. Bitcoin exchange scams offer worthwhile manages modest rates that will deceive you into supposing you’re getting an incentive for your cash. They frequently guarantee that they offer Bitcoin a specific rate lower than the general market esteem however when you send your installment in, your Bitcoin never arrives.

How to avoid fake exchange scams:

  • Stick with well-known and popular exchanges.
  • Thoroughly research any exchange or wallet before creating an account — who is the team behind the exchange or wallet? Where is the company registered? Are there reliable reviews from other users confirming its legitimacy?
  • Don’t let yourself be pressured into depositing funds or providing any personal information.
  • Don’t just randomly pick a wallet from the app store — only download apps and software from legitimate wallet providers and exchanges.


Bitcoin Cloud Mining Scam

Obscure to many, Bitcoin cloud mining is a genuine operation that enables individuals to mine Bitcoin without the disconnected issues regularly attached to it. You never again need to manage hardware, mining programming, or network issues – the Bitcoin mining is done through the cloud. Scammers exploit this and you get next to zero profits for the cash you contributed.

The most effective method to avoid from mining scams:

  • Altogether look into any cloud mining task before joining.
  • Does it utilize https? Does it have an public mining address? To what extent has it been doing business? Would you be able to locate any genuine audits from different clients? Does the site have an enlisted domain name?
  • Be to a great degree careful about organizations that “ensure” benefit.


Investigate the company or website before any transaction

There are records accessible in online discussions of organizations and programming that offer authentic services.

You can likewise ensure that the site is scrambled by checking in the event that it utilizes HTTPS rather than HTTP.

Ask individuals you know and trust to prescribe organizations and sites for services you are occupied with.



Don’t follow referral links or outbound links

Try not to follow obscure weblinks. You can get an email as far as anyone knows from some mainstream bitcoin benefit that proposes you to visit their site utilizing the data of your BTC wallet.

For this situation the results are very unsurprising. Complete a little research of any service that asks you individual information.

This applies to all the Bitcoin scams we discussed, as they frequently show fake promotions that instruct you to tap on connections that divert you to their site.

Try not to tap on supported advertisements that appear on indexed lists and never follow an outbound link from messages, suspicious or something else. On the off chance that you should, open another tab and enter the site URL physically to look at it.



Check for Malware

Before downloading anything onto your gadget, check for malware. It’s in every case better to be cautious and check whether there are executables that contain viruses.

The more we execute on the web, the more defenseless we are to data scams that destroy our investments.

To secure your funds, try to do your due constancy when making transactions online and evade misrepresentation.

Special Instructions to Avoid from malware tricks:

  • Always Update your antivirus software routinely to secure yourself against malware.
  • Never download and introduce programs except if you’re pretty certain they’re from a respectable, genuine supplier.
  • Try not to open suspicious attachments.



The main scam on the list is one that you likely could be acquainted with as of now, as it’s likewise been broadly used to target clients from real banks.

Known as “phishing,” this sort of trick happens when you get a spontaneous email that looks as though it’s from your bank — or, for this situation, from your crypto exchange or wallet supplier.

This email contains a connection that takes you to a site that looks relatively indistinguishable to the trade or wallet you typically utilize, yet is really a trick site.

The most effective method to avoid from phishing tricks:

  • Continuously check URLs to ensure you’re visiting the real site.
  • Try not to click on suspicious links that are messaged to you.
  • Never disclose your private key.


Pumps and dumps

Digital forms of money are frequently expelled as an examiner’s blessing from heaven that are ready for a smidgen of market control, which has prompted the ascent of what are known as “pump and dump” plans.

This is the place substantial gatherings of purchasers focus on an altcoin with a little market top, purchase that coin as once huge mob at a specific time to drive its cost up and afterward pitch to exploit the huge value rise.

This kind of thing is unlawful in conventional securities markets, however is a typical event in the to a great extent unregulated universe of digital currencies.

Truth be told, there are a few online groups and discussions committed to this correct practice, so it’s essential that you stay clever and realize how to avoid these tricks.



Hacked exchanges

As made reference to, utilizing trustworthy trades can result in clients being defrauded. This regularly happens when the trade itself is assaulted by cyber criminals.

There have been some prominent cases fitting this bill, however they’re not disengaged circumstances.

In contrast to banks, client stores at bitcoin trades ordinarily are not safeguarded against robbery.



Fork Scams

A prime open door for wallet scammers is amid a fork, when holders of a cryptographic money may be issued coins of the forked cash and in need a place to keep them.

At the point when bitcoin gold was released scammers exploited the way that clients would search for some place to put their tokens of this new digital money. Through some site, they provoked clients to surrender their private keys for this and different coins with the end goal to produce bitcoin gold wallets.



Physical Threats

These are not so much scams, but rather they are winding up more pervasive and are unquestionably worth monitoring, particularly in the event that you claim a considerable measure of digital money.

Numerous individuals have been assaulted, robbed, and even seized, so criminals can access a wallet and take some cryptographic money. A portion of these ongoing cases may stun you.

UK brokers assaulted – It is accounted for that couple merchants were as of late met with a furnished posse at their Oxfordshire home.

US financial specialist abducted – Louis Mezza was as of late charged for the capture and burglary of his companion in a supposed instance of digital currency robbery.

Moscow investor assaulted – The most recent significant instance of an assault including bitcoin supposedly occurred in Moscow.



Man-in-the-Middle Attacks

Basically, man-in-the-center (MITM) attacks can change the goal of cash transfers.As the name infers, programmers catch information bundles as they travel between two exploited people.

In case you’re attempting to make a deposit utilizing Bitcoin, a MITM can change the destination of your exchange, letting you well enough alone for cash and your planned beneficiary asking where the deposit is – all they have to utilize is malware by means of emails or a mutual Wi-Fi network.

How to Avoid

To remain safe, use a VPN.

Since authentication protocols are particularly intended to avert these kinds of assaults, a VPN guarantees end-to-end encryption, making you unknown over open systems.



The ‘Take Your Cash And Go Missing’ Scam

It appears presence of mind to be careful about apparently genuine Bitcoin merchants, who request money in advance to purchase Bitcoins for your benefit. In any case, numerous cases have risen that demonstrate such tricks are normal.

Such a scam was as of late revealed in the UAE, wherein the fraudster acted like an online Bitcoin dealer and baited an artless investor to meet his accomplice and hand over a colossal measure of money to him to buy Bitcoins. When the money was in his grasp he kept running off with it, just to be caught by the police before he had the opportunity to exchange the cash to his partner, based offshore.



Traditional extortion schemes

At last, how about we not disregard customary extortion schemes. The enhanced security that bitcoin exchanges offer over fiat exchange imply that it, alongside different cryptographic forms of money, are perfect for coercion. It has turned out to be progressively regular for crooks to ask for related installments in bitcoin or much more private coins.


The notorious WannaCry ransomware assault propelled in July 2017 and contaminated PCs over the globe. Records were scrambled and programmers would just give them back in return for bitcoin installments.

The sums exploited people were charged were allegedly several dollars at once, and programmers were thought to have left with few thousand dollars worth of bitcoin.



Exit scams

A standout amongst the most notable tricks in the realm of ICOs is the leave trick. It is like the pump and dump trick we discussed before, yet for this situation, it’s typically the makers controlling the incentive for the sole reason for off-stacking.

New companies make a considerable measure of publicity around their new digital currency, driving up the estimation of the tokens. The makers normally hold an extensive bit of the tokens and just dump it when the esteem is up.

The esteem at that point plunges, leaving speculators with useless tokens.


Amid the period between its dispatch in August 2017 and its suspension in December 2017, the Plexcoin ICO accumulated few million in ventures.

Be that as it may, resources were solidified and author Dominic Lacroix was charged in the wake of being blamed for duping financial investors by making false cases and guarantees than couldn’t be conveyed upon.



The ‘Buy Bitcoin Online At A Huge Discount!’ Clickbait Scam

Be exceptionally wary of catchy promotions/Ads that guarantee an extraordinary Bitcoin bargain. These are frequently advertising strategies of scammers who utilize alluring advertisements as misleading content.

Clicking on the link in such advertisements would take you to the site of a phony Bitcoin trade and in the end to an installment interface. When you pay, there’s no hearing once again from the alleged trade – No installment affirmation and no Bitcoins credited to you.

Phishing scams by means of email additionally work likewise. Regardless of how bona fide the source looks, don’t tap on any hyperlinks gave in it!



Fraudulent ICOs

Enticed by the galactic value rises bitcoin has encountered since its initiation, numerous ordinary purchasers adventure into the universe of cryptographic money searching for the following huge thing.

All things considered, if any new type of bitcoin ever really arrives, getting in at the ground floor could see early-adopters gain a fortune.

The most effective method to Avoid from fraudulent ICOs:

Altogether look into any ICO before purchasing in. Take a look at the group behind the project, its white paper, the reason for the cash, the tech behind it and the specifics of the token deal.




Checklist: How to Spot a Crypto Scam

Uncertain whether a specific crypto site is a scam or not? Utilize this checklist to enable sort to real suppliers from those platforms you’re in an ideal situation staying away from by and large.

  • Does the site associate safely over https (not http)? In the event that the address begins with “http” rather than “https,” the information you send to the site isn’t secure.
  • Would you be able to see “Secure” or a picture of a lock in your internet browser’s location bar? This demonstrates a site is secure.
  • Does the site’s URL have any discernible spelling slip-ups or blunders? Assuming this is the case, it could be a scam.
  • Does the site highlight terrible syntax, awkward expressing or spelling botches? In the event that it does, this doesn’t really demonstrate a trick, yet it means you ought to continue with alert.
  • Does the site guarantee unusually exceptional yields? This should raise a major warning and is a typical marker of a trick.
  • Is there an “About us” page? Does it demonstrate the genuine individuals behind the organization? Does it give any insights about where the organization is enlisted? On the off chance that there’s almost no data about who the organization is and what it does, you could be managing a scam.
  • Do genuine, respectable sites connect to this site? This could show that the site is trusted and regarded.
  • What do different clients say in regards to the site? Are there any negative surveys and, assuming this is the case, what do they say? The crypto network rushes to get the message out about scams.
  • Who is the registered proprietor of a domain or site? Is the owner taken cover behind private registration? Has the domain been enlisted for under a half year? The more data you can discover about the general organization behind a site, the better.
  • Is there something else about the site that raises warnings or just appears to be unrealistic? In the event that there’s something that simply doesn’t appear to be correct, trust your gut.

P.S. This checklist is a long way from foolproof, as it’s workable for a site to breeze through a few of the above tests without a hitch and still be a trick. The vital thing to recall is to do your due determination before giving any close to home or monetary data to any site or application.

Simple Tips to Help You Stay Safe

There are a lot of other basic things you can take to secure yourself against misrepresentation, for example,

  • A proof-of- reserves cryptographic review. In the event that the administration is freely examined it implies that presumably the organization is monetarily dependable and it can satisfy the commitments. At any rate you can check it. A few service may guarantee to give you some staggering security level dependent on high innovations which sound absurd. Be that as it may, having completed a little research you see they don’t have any fundings to meet the requests of clients. 
  • Try not to disturb your mind. On the off chance that an offer is unrealistic, it is probably going to be a Bitcoin scam. Keep in mind, everybody needs to save his cash. There is no space for liberality in this sort of business.
  • Try not to download the product from obscure sites. It can contain viruses that will take your coins.
  • security of your e-wallet is a PC without Internet get to. Yet, ensure that your PC does not require any sort of fix, in light of the fact that if there should be an occurrence of accident it is difficult to restore your cash.
  • Beware of phishing attempts.
  • Make sure that your OS is patched with the latest security updates.
  • Be mindful of ransomware.
  • Use secure non-guessable passwords and take other measures to protect yourself.
  • Use a reliable VPN. 
  • Use 2-factor authentication 
  • Use a cold wallet 
  • Stick with established providers 
  • Always double-check addresses 
  • Never share your private keys with anyone.


The cryptographic money market has to be sure turned into an attractive segment, however financial specialists ought to likewise be particular in recognizing which investment programs are substantial, and where the genuine plan is a Bitcoin scam.

As an undocumented industry, no expert or government body ensures the security or discount of digital money purchasers if there should arise an occurrence of extortion, regardless of whether purposeful or something else.

With the idea of Bitcoin and other digital currencies immaculate by any expert, and after that combined with the anonymity factor gave, the shot of misrepresentation for imperceptibility is more extensive. Utilization of Hardware Wallet, 2-factor confirmation, and other security highlights can undoubtedly ensure hacking hazard decrease.

However, all that would be good for nothing on the off chance that you yourself can not be careful about Bitcoin scam, since it is effectively tricked by a rewarding venture offer.

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering.