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“You Have Been Scammed”: How Not To Fall Into The Trap Of Bitcoin Fraudsters

Jan 11, 2022 - Koby Pearson

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Hi! Koby Pearson here. You have not heard from me in a while. Finally there is a new topic for discussion, and it is worthy of detailed analysis.

In the world of cryptocurrency, bitcoin does not lose its popularity not only among users but also among scammers. Every day they invent new ways to gain your trust and use all available methods to reach your wallet.

How To Avoid Cryptocurrency Fraud?

To keep yourself safe, be on guard.

  1. Check all information carefully.
  2. Before trading bitcoin, study the reviews, and make sure that the cryptocurrency exchange or wallet you choose is legal in your country.
  3. Never tell anyone your private key or the seed phrase to your cryptocurrency wallet. Use cold wallets to store this information.
  4. Check the URLs carefully to protect yourself from phishing.

To find out if the company is legit, simply type the company name and the word “scam”, “fraud” or “legal documents” in the search box.

Don't forget to check out the News and Images section.

Keep in mind that before depositing money in any exchange, you can always ask for an official document confirming that the company is regulated by your country's financial institution. For example, this could be CySEC, SEC, IFCS, and others.

Types Of Cryptocurrency Scams

There are several schemes that scammers actively apply. I will talk in detail about the main ones.


You meet a pretty girl online. After a few days of flirting you move on to more serious conversations about finances and how to make money. "Bitcoin is going down, now is the time to invest in crypto," she writes. She has been successfully investing in bitcoins for three years and is ready to help you improve your financial situation, which was shaken during the pandemic. She knows a "trusted broker". Judging by the photos, her life is really booming: her account has both travel stories and photos from expensive restaurants.

The broker asks for a contribution of $1,000. Then a request comes in for more transfers and just like that you have deposited all of your savings. After that, the pretty stranger and the broker disappear, the website stops working, and the phones are turned off.

Such pseudo-brokers create dozens of throwaway websites masquerading as legitimate investment companies. The scammers use popular social networks, messengers, and dozens of fake accounts to communicate with victims. According to reports, the damage from the actions of fraudsters in each case averages tens of thousands of dollars.

Fake Giveaways And Ponzi Schemes

One popular bitcoin fraud scheme is fake giveaways. Scammers take advantage of the fact that many people want to get cryptocurrency for free. They post ads on social media promising to double the amount that you send to their wallet. However, they send nothing back. To attract victims, scammers often hide behind the names of celebrities.

Recently, experts have seen a surge in such frauds. Not long ago, someone posted a Medium article on Twitter on behalf of Elon Musk, announcing a fake bitcoin giveaway. They asked users to send bitcoins or ethereum, promising to return the doubled amount. This time, the scammers collected $580,000 in bitcoins in a week.

Another example is when scammers used Apple co-founder Steve Wozniak’s name to attract victims. The perpetrators posted videos on YouTube in which they persuaded users to send cryptocurrency to a certain address, promising to send twice as much in return.

Pyramid Schemes

Over the years, cryptocurrencies have risen strongly and shown good returns. This attracts the attention of people who want to make money. But most of them do not have the necessary knowledge to invest competently in digital assets.

Scammers take advantage of this by promising high returns to those who provide them with cryptocurrency allegedly for trust management. They imitate the work of full-fledged investment funds, publishing daily reports on transactions and returns. Moreover, at first, the scammers may even make some payments to the victims, working on the principle of a pyramid scheme. Having trusted the intruders, users start giving them even more money.

The details may differ, but there are some common signs: first, you are is given to believe in your success, obtained as a result of complex mathematical algorithms. In fact, the amount displayed in the personal account, as a rule, is not real. When a user attempts to withdraw money, scammers allegedly transfer the victim's "earnings" to a cryptocurrency wallet (which, of course, does not belong to them) that holds a similar amount in bitcoin equivalent. The victim is asked to pay taxes to a third-party account, and they may later extort money to solve the withdrawal issue.

Phishing And Fake Apps

Another common trick used by scammers is phishing, creating a copy of a site that looks identical to the original. Taking advantage of users' gullibility, they try to convince them to make a transaction to a third-party account. Fraudsters create a fake wallet site to store cryptocurrency. The user goes to it and downloads a fake application. He then installs the wallet and transfers cryptocurrency to it, unaware that he is sending funds to scammers. Another risk is that not only a fake wallet can be downloaded, but also a virus that steals data.

There is another way to cheat. The trader goes to a fake trading site or downloads a fake app and enters their username and password on it. The information gets to the attackers, and then they can use it to gain access to the user's real account.

Not long ago, Amazon was involved in a similar scheme. The news broke on social media that the company would include Bitcoin in the list of accepted currencies by the end of the year, and in 2022 it would issue its own token. The news was not confirmed in any way, but it only played into the hands of the scammers. Dozens of fake ads appeared that led users to fake Amazon websites promoting new tokens. For the average user, it is not easy to tell the difference.

Fake Exchanges

You can lose your savings by buying and selling cryptocurrency for fiat money. One of the most popular ways to exchange digital coins for fiat is through exchangers. Traders transfer assets to the service, which sends currency in return, for example, to a bank card or e-wallet.

There are hundreds of exchangers, and scammers can hide among them. They promise you a profit after buying digital coins from a real exchanger and then reselling them on a fraudulent platform. Real exchangers are used in such schemes to increase trust. After receiving the funds, they may appropriate them for themselves, explaining this for a variety of reasons. For example, they claim that there was a technical problem, the transaction "hangs" in a blockchain, or they blame the user for a wrong address or for not pressing the "pay" button.

The essence of the scheme is that the user buys cryptocurrency on a real platform. Then he turns to the fraudsters' platform, because they offer a very favorable exchange rate of cryptocurrency for fiat money. But the exchange does not happen. As soon as the user sends the funds to the fake exchanger, he loses them.

Signs Of Scam

Scammers work according to well-established schemes that allow them to gain the trust of users to then deceive them. Here are the signs by which you can identify scammers:

  • Fraudsters in most cases rush their "clients" and try not to give them time to realize what is happening.
  • Exclusive information and offers. Fraudsters use a ruse about "secret bugs" and “one in a lifetime” opportunities to attract attention.

Promises of inflated returns, 50% or even 100% per month.

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Latest Articles


How Do I Protect Myself From Online Fraud?

Fraud on the Internet has been around for about as long as the world wide web itself. From year to year, fraudsters develop new tricks and techniques to deceive their potential victims. To avoid getting into online traps, be sure to follow some basic rules:

  • Check your social media privacy settings and never share information with people you don’t know.
  • Create strong and different passwords for each website you use. Experts say you should change all your passwords once in a few months.
  • Always be cautious when using public Wi-Fi. You can use it for general browsing, but never use it for shopping or banking.
  • Do not open suspicious texts, pop-up windows, links, or attachments in emails.
  • Never send money or give credit card details, online account details, or copies of personal documents to people you don’t know or trust.
  • Be wary of unusual payment requests. Scammers will often ask you to use an atypical payment method, including gift cards or virtual currency, such as Bitcoin.

What to Do If I Have Become a Victim of Online Fraud?

Sometimes people choose not to report fraud because they are embarrassed that they fell for a scam. Remember that fraud is a crime, and fraudsters will continuously find new ways of tricking people. Anyone can become a victim, so you need to do your best to prevent this.

The first thing you should do if you become a fraud victim is to contact the police. Come to the local police station or call an emergency number to get advice. Contact your bank first if credit cards, online banking, or cheques are involved.

If your funds were transferred via an electronic payment system (PayPal, WebPay, etc.), it makes sense to contact the support service. The support service can block a scammer's account, preventing potential theft.

Can I Get My Money Back?

If fraudsters have stolen your card details, you need to call your bank's support service and block your card. After that, go to the bank and submit an application to cancel the transfer. Reviewing your application can take up to 30 days. Remember to bring evidence that you were deceived and take it both to the bank and the police.

According to the statistics, only 23 percent reported money out of the 1.7 million cases was lost, meaning you have a chance to return your funds.

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