If you are reading this, then the chances are that you are indeed interested in bitcoin and crypto exchange. The newcomers in this field might not be completely sure about the system’s stability — nobody ever wants to lose money for nothing. But, actually, the fact that bitcoin exchanges are usually not controlled is not the main problem of this market (but, of course, an important one). Another highly discussed issue that every person can fall victim to: we are talking about crypto scams.
A crypto scam is a type of fraud when cryptocurrency (like bitcoin) is involved. There are different kinds of crypto scams, also called bitcoin scams, especially when bitcoin is involved. We will discuss these kinds later. Even if you consider yourself to be a rather professional bitcoin trader, you can face this problem. In case of scams, no one is insured. That is why we are here to help you avoid such problems in trading, which eventually lead to losing money, and enjoy the safety of your crypto wallet and the safety of the bitcoin exchange as such.
Professional scammers might earn much more than just a thousand dollars. If you have never faced them before, you are lucky. The main goal of the scammers is to get the property (usually material) that does not originally belong to them. This is an easy way to obtain money and get richer. That is why a bitcoin market is a place that scammers could not walk away from.
Bitcoin Scam Test In The Flesh
But knowing that you can suffer from bitcoin scams will only increase your stress and make you depressed — we do not want that. We think that “forewarned means armed,” and we are here to prepare you for this improvised war. Do not worry; knowledge is our weapon, not the knife or the gun.
If you want to feel that your bitcoin wallet is safe, answer the following questions for yourself. They will help you realize if the bitcoin exchange platform you use is trustable or not.
You might not know the answers to all the questions we suggest. That is totally fine, but if you find these answers, use them.
1. Have you met negative reviews concerning the service you are checking on Reddit?
If other people already faced bitcoin scams on the platform you are interested in; probably, they spent some time sharing their problem with other users. This is the matter of solidarity and increased attention: the more discussion a certain service gets, the higher are chances that others will avoid problems with it.
Click this link — this is the link to the tool to answer this question properly.
2. Are there links between this site and other platforms considered to be rather legit?
This is a matter of reputation: if a legit site is linked to the site you are checking, probably, it made sure that there will not be problems with the scams.
Click this link — this is a link checker, a tool to answer this question properly.
3. How old is the domain of the service you are checking? Is it more than six months old?
If the domain is rather old, it is probably the platform you can trust; meanwhile, relatively new domains make people ask questions about their reliability.
Click this link — this is a domain age checker, a tool to answer this question properly.
4. What is the rating of the domain of the platform you are checking? Is it over 20?
Click this link — this is a domain rating checker, a tool to answer this question properly.
5. Have you met negative reviews on the platform you are checking on Bitcointalk?
Bitcointalk is a reliable source of information who want to read reviews on certain sites. If you meet a lot of negative reviews on your service here, probably, you should not trust it.
Click this link to answer the question properly.
6. What is the Alexa rank of the platform you are checking?
Top Alexa rank sites are considered to be trustable platforms.
Click this link and check the Alexa rank of your service.
7. Does the platform offer high yields?
If the service you are checking offers an impossibly (or close to impossibly) high yield, put it simply, more than 20% profit every year, this is the reason to start asking questions.
8. What does Google say about the platform?
If Google reviews state that there were cases of scams on this service, probably, you should not trust it too much.
9. Can you “process personal data” of the platform? Is it available?
We added this question to make you think about the “transparency” of the platform you are planning to use. Can you find information about the developers? About their offices? Anything that can link you to real people?
The more information about the company and its creators you can find, the higher your chances are that this is a trustable service.
10. What exactly does this service suggest: to make money from cloud mining or from Bitcoin mining?
The last question we offer is a rather general one, just for you to think:
11. Do you see that the platform you are checking is offering something too good to be true?
This is a matter of common sense: there is no free lunch. Unexpectedly good promises often turn out to be a decoy.
Answering these simple questions will help you realize if the platform you are planning to use for exchange is reliable or not, thus protecting you from various kinds of scams. As for the latter, we are about to discuss them in a minute.
Bitcoin Scams: Kinds And Examples
Scams can be found everywhere because this is how human nature works: some of us are too trusting, and others do not mind using this weakness. In the bitcoin community, there are different kinds of frauds you can meet since cryptocurrency is a volatile area. In the list below, you will find the most common bitcoin scams — obtaining this knowledge will be helpful to protect you from fraudsters.
Ponzi scheme is one of the top bitcoin scams known in the bitcoin world. This is a type of investment scam, also known as pyramid schemes, which hides the idea that old investors are getting money from the new investors, and all of them are thinking that they receive money from some stable financial activity. In other words, the “managers” of this scheme pay previous investors using the deposits given by the newcomers.
This works not only with investors’ money but with the other assets as well. Bitcoin is such a type of asset used in Ponzi schemes too. Nowadays, to perform this scheme, fraudsters use cloud mining or coin doublers. If you see the platform which offers high daily returns, chances are its creators one day will disappear with your money, be careful!
Our advice: use our bitcoin scam test to check the platform you are planning to use. It will help you realize if the service can be trusted.
Nigerian Prince Scam
This type of scam was a frequent case when the Internet was gaining popularity. It can be definitely be added to the category of “old school scams.” The initial idea was the following: someone claiming to be a prince was spreading emails with the desire to help people. But before that, you have to share your assets with this character. In some sense, this is a typical bitcoin scam nowadays.
Someone, who might introduce oneself as the person you actually know, might ask you to send him/her bitcoins. Do not do that. At least you know for sure that you know this person.
Why do “Nigerian princes” use bitcoins? First of all, the transactions here cannot be canceled or reversed. Second of all, bitcoin is about anonymity.
Our advice: never share your bitcoin assets with people you do not know, do not take their word for it. Most likely, you will never see your bitcoin ever again. And even if you send bitcoin to someone you are supposed to know, please, check it twice.
This is a popular bitcoin scam. However, it is used not only in fake bitcoin exchanges. The idea behind this scam is that the fraudsters send links-invitations from fake websites. However, these sites are usually disguised as some trustable sources, like your wallet provider, to distract attention.
Our team once received a letter from this site which seemed to be Coindesk.
In the invitation letter, you see a link, which “you have to follow to log in” for some reason. Reasons, by the way, might already be rather strange and questionable, so this is the first sign to reflect on the trustworthiness of the platform.
If you click the link, you get to the duplicate of the original reliable service, but with a different link. It might be full of fake accounts to seem more real. Pay attention to the link: if it starts from “HTTP,” not from “HTTPS,” most likely, you cannot trust this source. Thus, you have to check its SSL connection: check the presence of the “lock icon” at the beginning of the address of the platform.
Be careful about logging in: once you share your login and password, your online wallet and personal data are no longer secure. Hypothetically, this might be enough not only to get your bitcoin address or other details. The fraudsters can now access your bank account and transfer funds to themselves. This scheme will require more time, but in the world of the scam, everything is interconnected.
Duplicate site owners might do a lot to make their services look like real platforms. They might perform all basic issues: apply market research to generate audience insights, actively scan device characteristics of the users for identification, set and display personalized ads, select basic ads, create a personalized ads profile, measure ad performance, eve ask for precise geolocation data. If you leave too much personal information on such sites, and if they get your phone number, the fraudsters might even perform several phone calls.
They might create fake celebrity endorsements or fake news stories to attract more trusting users.
Our advice: pay particular attention to the invitation links or the requests to log in somewhere. Try not to follow the link the email asks you to follow. The best way to access the platform is directly from the browser, avoiding any links. Sometimes you might be offered some additional bonus for following the link — do not trust it. These are fake giveaways.
Another thing you can pay attention to is whether in the letter you are addressed by your name or not. Trustable sources do have your name and will use it to address you, while fake services will use something like “sir” or “dear customer.”
An additional piece of advice: please, do not open attachments that you see in the email. This cloud end badly. Delete such emails instead or add them to the “spam” box.
Private Key Scam
The name of this scam, actually, explains it all. This is one of the common scams, which is usually about fraudsters getting access to your data, usually the key (private), or seed phase.
This type of scam itself can be divided into several forms:
- The fraudster can send you a key to be used in your own wallet, thus getting further access to your funds. For the example, check this link.
- Asking trader to share the key (which also works sometimes with the help of persuasion methods).
- Asking the trader to provide remote access to the computer, which thus allows fraudsters to get private kay with no obstacles. For the example, check this link. The fraudster might introduce himself as the professional who can solve some kind of a problem (in case of the problem, of course) or as someone respected in a certain community.
Our advice: do not give the data to anyone, even those who pretend to be someone you are supposed to know. Keep your key and other details in secret, do not share them with those who ask to do it, even if they sound rather persuasive.
Pump and Dump Scams
Pump and dump scams are prevalent on the stock market. The idea behind this is that fraudsters, who bought cheap assets, construct the positive vision of it so that its price rises. After that, they sell the assets, and the price inevitably falls, leaving the investors without money.
This works with bitcoin as well. So, before purchasing, double-check all available information to make the correct decision.
Do not forget to use our Bitcoin scam test to check the platform you about to use.
Can We Trust Bitcoin At All?
The newcomers in the field frequently ask this question. Bitcoin, as something you cannot touch, might seem to be untrustworthy at first glance. Some might think that bitcoin itself is already a huge scam, with fake exchanges and fake deals.
We will not delve into the issue of how bitcoin works here, and we will not explain the technology behind it. The key idea is that the only insecure thing about the whole technology is the people and the human factor. If you hear that someone lost a few thousand dollars on bitcoin, this is not because the technology “ate” it. This is because of people being not careful and responsible enough about their funds.
Bitcoin as such is not about some “fake exchange of fake assets.” This is not some “get rich quick scheme.” This is a science that requires time and responsibility to learn, just like bitcoin mining (which also raises a lot of questions among those who do not know much about it).
“How much money can we lose on bitcoin?” — a popular question asked by skeptics. We are here to answer: as long as you treat your funds irresponsibly and carelessly, as long as you send money to those you do not know, you will be losing your funds, regardless of whether these funds are bitcoin or something else.
Advice If You Got Scammed
Of course, the most obvious thing to recommend if you want to avoid the consequences of the scam is just not to get scammed. But, if it happened, we provide you with some steps to perform:
- Write a report on the platform where you got scammed on such services as BitTrust, BadBitcoin, and TrustPilot.
- Share your situation with other users in the comments, and your experience might help others avoid this problem in the future.
- File a lawsuit against the platform which deceived you. It might take time and money (or might seem like something which is not worth it), but this is a responsible step of a responsible citizen.
What Can We Do To Feel Secure?
Sometimes, if a person trades a lot, one cannot stop keeping bitcoin assets in the wallet. Does it mean that there is no way to stay secure? Actually, that is not quite true. We prepared a couple of tips to feel safe when keeping money in the wallet.
- Use two-factor authentication (2FA)
2FA protection is a way to confirm a user’s identity, usually with the help of a code sent to the user’s mobile phone, which has to be inputted in the special field. With the help of 2FA, even if the fraudsters manage to get your password, they will not be able to enter the code and will not get total access to your account.
The most popular 2FA applications nowadays are Authy and Google Authenticator.
- Create strong password
We believe it is rather obvious not to use the birth date or the name of the dog as your passwords. The best option is a string with random symbols, but it is usually hard to remember.
There are special password managers, which serve to create new strong passwords and keep them private.
- Use reliable networks
Home networks are usually safer than public ones, but if using a public network is the only option, do not forget to use VPN (a Virtual Private Network).
- Use the third party
This is an option if you need to make a bitcoin transaction, but you are not certain about the person you are dealing with. To do it safely, use a third-party escrow service, Bitrated, for instance. For smaller deals, one confirmation will be enough.
The Final Word
A bitcoin scam is a problem nobody is immune from. To avoid the consequences, we strongly recommend passing the bitcoin scam test we provided here. Additionally, please, keep in mind the following suggestions:
- Do not provide your personal information to people you do not know, especially if they ask to send them seed phase.
- Do not follow suspicious links, do not enter your log-ins or passwords.
- Use two-factor authentication on your accounts.
- Use safe network connection for bitcoin-related issues.
Before you start trading bitcoin, we want you to remember a simple rule: be careful about your personal info, display responsibility, and do not trust those you do not have reasons to trust. These steps will protect you from potential scams in the future.
How can you tell a Bitcoin scammer?
If you want to identify a bitcoin scammer, we recommend you answer the questions of our bitcoin scam test. These questions will help you check whether the platform you are planning to use is suspicious and questionable and realize if you can trust the service or not.
Is the Bitcoin system a scam?
The bitcoin system itself is not a scam. However, this is a popular place for fraudsters to “do their things.” Unexperienced and irresponsible users many times fell victim to bitcoin scammers. They steal people’s money, assets, and so on by pretending to be someone they are not.
How do I get my money back from a Bitcoin scam?
If you suffered from a bitcoin scam, getting your assets back might be a complicated task. Usually, the more time passes from the scam, and the smaller your chances are to fix the situation. However, you might try using Chargeback. This is the platform that is claimed to be rather effective in this question. However, you can use other services to get your money back from a bitcoin scam.