Bitcoin has grown in popularity, and many people are trading and profiting greatly from it. The massive growth of cryptocurrencies in recent years has created a ton of opportunities for fraud. Scammers are always looking for new ways to steal your money as their popularity rises.
Bitcoin transactions are not completely anonymous because a blockchain is a publicly accessible ledger that keeps track of them all and makes them visible to anyone.
This explains why these scams have spread so widely around the globe.
I recently came across a report from the FTC that exposed the shocking truth regarding losses due to BTC fraud. It appears that investment scams are the main cause of losses that began on social media. False investment opportunities caused a whopping $575 million of all crypto fraud losses recorded to the FTC since 2021.
I am quite concerned about how common these frauds are and the possible financial losses they can lead to.
There is always an education phase when new technology becomes popular with the general public, during which beginners learn the ins and outs of the technology.
Scammers then begin to appear when the technology gets more widely used, preying on and taking advantage of the traders.
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In this article, I will give you some pointers on how to spot a scammer and catch them before they trap.
How are BTC scams carried out?
The two most prevalent kinds of Bitcoin scams are:
- You might be tricked into disclosing your private keys, security codes, or login information for your digital wallet. By doing so, they can get into your wallet and steal your crypto.
- A scammer will offer phony investment opportunities to convince traders and businesses to send Bitcoin directly to scammers.
But that’s not all; you should also be aware of other tactics scammers use to trick you.
Phishing scams are still widely used. Scammers send emails with a link that is connected to a bogus website to gather your personal details, such as your BTC wallet key information, which is required to access funds within the wallet.
Once the hacker has all the information, they steal the cryptocurrency.
This is one of the widely used scam on Cash App.
To avoid phishing scams, never enter login credentials or other sensitive information from an email link. Always go directly to the site, no matter how trustworthy the website or link appears.
Fake apps and websites:
Fraudsters create fake crypto trading websites or crypto wallets to trick victims. Due to their similarity, users find it difficult to distinguish between real and fake ones.
Scammers also make fake apps that are available for download from the Apple App Store and Google Play. These fraudulent websites are simple to spot and can be deleted, but they still have an effect on many users’ finances.
As mentioned above, these websites are designed to be phishing pages. As a result, all the login information you provide will end up in the scammer’s hands, including your password, recovery phrase for your crypto wallet, and other financial details.
People who make big claims or promises should not be trusted. Only scammers guarantee big returns and make the ‘no risk’ guarantee. No financial investment can guarantee future returns because investments can go down as well as up. Any crypto offering that promises you will definitely make money is a red flag.
There is a big chance of losing money on Websites, Facebook and Instagram posts, and salespeople on the street: who promise you to make money with crypto coins fast. But in reality, the chance of losing your money is close to 100%.
Love interest (Romance scams):
Dating apps are often used to trick traders, where one party takes time to win the other party’s trust. The second most common crypto-related harmful tactic is romance scams.
According to the Federal Trade Commission, people who paid romance scammers with crypto reported losing $139 million in total in 2021, more than any other payment amount.
Imagine you met someone on a dating app like Tinder,’ and after communicating with them for a few weeks and building trust, your friend offers you to make a crypto investment and make good money and tries to explain everything that leads to the transfer of coins or account authentication credentials.
Investment requests from unknown people are never genuine. That’s a “BIG RED FLAG.”
The scammer will create a fake wallet and ask you to deposit bitcoins or other coins there; once done, you will no longer be able to access the wallet, and your Bitcoin balance will be lost.
Avoid investing in fraudulent cryptocurrency offerings and store your money in secure digital wallets.
Pump and dump scheme:
Crypto pump and dump tactics have recently gained a lot of attention in the worlds of finance and cryptocurrencies. Social media provides many examples, but they can disappear just as quickly.
A scammer will present false information to persuade people to buy large amounts of the new cryptocurrency. Once they have the money from their victims, they will sell their coins and disappear.
The idea behind this scam is simple; mislead others into thinking an investment has great potential with false information. After this, the scammer waits until the stock price is sky-high.
Then they sell however much stock or security they have purchased. Finally, they disappear with their victims’ money. In recent years, this has happened more and more with cryptocurrencies.
This is frequently a quick and “safe” way for criminals to make money because cryptocurrencies are largely unregulated. They may more or less be bought and sold anonymously as well.
Fake celebrity testimonials:
Other popular methods used by Bitcoin scammers to deceive consumers into investing their crypto cash include celebrity endorsements and phony testimonials. Do not believe influencers who appear to be as dishonest as their proposals.
Despite social media platforms promises to crack down on fraudsters, images of well-known celebrities are being utilized as the faces of crypto scams.
The billionaire’s image was used to promote a Google ad for an investment opportunity—purportedly on a new Amazon trading platform for cryptocurrencies.
Elon Musk’s headshot was also used to steal £42,500 ($52,545). Scammers frequently use Musk’s face to advertise “send one Bitcoin, get two back” scams on YouTube livestreams.
The victim had mistakenly believed Tesla’s CEO had approved a cryptocurrency scheme.
Scammers also utilize blackmail emails as a popular social engineering technique. In such emails, scammers claim to have a record of your visits to adult websites or other unlawful web pages and threaten to disclose them unless you share your private keys or send bitcoin to the scammer.
These are criminal extortion attempts that should be reported to law enforcement, such as the FBI. As FBI helps in recovering stolen crypto, as they can help in these criminal extortion attempts.
Any cryptocurrency company that constantly posts on social media or overhypes their products should be deemed suspicious. Marketing that focuses on money rather than any new technologies in production may possibly signal fraud.
Crypto scammers are in it for the money, but cryptocurrencies are not usually a money-making business. Real cryptocurrency coins should be designed specifically to help the blockchain function, and their marketing should be low-key.
Educate yourself to catch Bitcoin scammers
The first line of defense against scams is education about cryptocurrency. Learn the basics of how they work, about the technology that powers them, such as blockchain, and about reputable platforms and exchanges where cryptocurrencies may be purchased and sold.
Read the white paper:
Fake cryptocurrencies will not have white papers, or if they do, they will be incomplete, hastily written, and lacking in information about how money is used.
Check out the white papers of popular cryptocurrencies to see how well-written the ones from new companies are. If they aren’t comparable, be wary about investing in or purchasing a new cryptocurrency.
Never send Bitcoin to anyone for huge returns:
Scammers manipulate traders’ psychology, exploiting greed and FOMO strategies to lure investments from genuine traders and investors.
Initially, they seek to comprehend your pain points. For instance, if you’ve traded without profit, they’ll entice you with massive gains.
Once they sense your interest, they work on building trust to secure funds.
This is how Bitcoin scammers ensnare investors.
I strongly advise against sending Bitcoin to anyone for promised gains, regardless of the circumstances.
Beware of AI scammers use:
You might be aware that artificial intelligence has advanced to a point where generating fake photos and videos is incredibly easy.
You can input a person’s photo and use their voice in the tool to craft any desired video.
For instance, scammers use to exploite Elon Musk’s photo and voice to deceive innocent people. Some even exploit Binance’s branding to steal Bitcoins.
Thus, when someone shares news, be sure to verify it on their official platforms.
If it hasn’t been confirmed there, refrain from sending your Bitcoin.
To safeguard oneself from Bitcoin scams and other cryptocurrency-related fraud, one must exercise vigilance, education, and caution.
Remember, scammers are sharp minded and their manipulation skills can make people believe in them.
There are a lot of cryptocurrency projects out there that can appear too good to be true, and for the most part, they usually are. You should steer clear of them at all costs. Instead, wait to make an investment until you have carefully reviewed the project.
Avoid listening to people who tell you to buy something, especially if it sounds too good to be true.
As long as you follow these tips, your chances of losing money in a bitcoin scam are relatively low. Stay safe and protect your hard-earned money.