Résumé
There are several cryptocurrency scams in the blockchain space. Some of the most common ones include blackmail, fake exchanges, fake gifts, social media phishing, malware targeting your clipboard, phishing emails, Ponzi and pyramid schemes, and ransomware. .
Let's briefly discuss each of them so you can learn how to avoid the most common Bitcoin scams and keep your cryptocurrency funds safe and functioning properly.
Introduction
As long as new technologies are introduced into the world, fraudsters will continue to look for a way to take advantage of them. Unfortunately, Bitcoin offers cryptocurrency scammers an interesting opportunity because it is a borderless digital currency.
The decentralized nature of Bitcoin allows you to have complete control over your investments. However, it is also more difficult to delineate a regulatory and law enforcement framework. If scammers manage to trick you into making mistakes when using bitcoin, they may end up stealing your BTC, and there is virtually nothing you can do to get your cryptos back.
That said, it's essential to understand how scammers work and learn to identify potential red flags. There are plenty of Bitcoin scams to watch out for, but some are more common than others. That's why we're going to look at eight common bitcoin scams and how you can avoid them.
8 bitcoin scams and how to avoid them
Blackmail
Blackmail is a well-known method of scammers who threaten others with revealing sensitive information if they are not paid in some way. This reimbursement is generally made in the form of cryptocurrency, more particularly in Bitcoin.
Blackmail involves scammers finding or fabricating sensitive information about you and using that information to force you to send them bitcoin or other forms of money.
The best way to avoid being blackmailed by scammers out of your bitcoins is to carefully choose your login credentials, the sites you visit online, and the people you give your information to. It's also a good idea to use two-factor authentication whenever possible. If the information they are blackmailing you with is false and you know it, you can rest easy.
Faux exchanges
As their name suggests, fake exchanges are fraudulent copies of legitimate exchange sites. Typically, these scams are presented as mobile apps, but you can also find them as desktop apps or fake websites. You have to be careful, because some fake exchanges are very similar to the originals. They may seem legitimate at first glance, but their goal is to steal your money.
Typically, these fake exchanges will attract cryptocurrency traders and investors by offering free cryptocurrencies, competitive prices, low exchange fees, and even freebies.
To avoid falling victim to a fake exchange, you should bookmark the real URL and always verify it before logging in. You can also use Binance Verify to check the legitimacy of URLs, Telegram groups, Twitter accounts, etc.
When it comes to mobile apps, be sure to check the developer information, download counts, reviews, and comments. Visit Common Mobile Device Scams to learn more.
Fake gifts
Fake gifts are used to steal your cryptocurrencies by offering something for free in exchange for a small deposit. Typically, scammers ask you to first send funds to a Bitcoin address so that you can receive more Bitcoin in return (e.g. "send 0.1 BTC to receive 0.5 BTC"). But if you make these transactions in Bitcoin, you will receive nothing and you will never see your funds again.
There are many variations of fake gift scams. Instead of BTC, some scams ask for other cryptocurrencies, such as ETH, BNB, XRP, and others. In some cases, they may ask for your private keys or other sensitive information.
Fake giveaways are most commonly found on Twitter and other social media platforms, where scammers take advantage of popular tweets, viral news, or announcements (like a protocol upgrade or an upcoming ICO).
The best way to avoid these scams is to never enter a contest where you must first submit something of value. Legitimate gifts will never ask you for money.
Phishing on social networks
Social media phishing is a common Bitcoin scam, which, like fake giveaways, will take place on social media. Scammers create an account that looks like a recognized crypto person (this is called identity theft). They will then offer fake rewards through tweets or instant messaging.
The best way to avoid falling victim to a social media phishing scam is to verify that the person is who they say they are. There are usually indicators on certain social media platforms, such as the blue symbol on Twitter and Facebook.
Malware targeting your clipboard
Malware targeting your clipboard is very vicious. This type of malware hijacks your clipboard data, and if you're not careful, you'll send money directly to the scammers.
Let's say you want to send a payment in BTC to your friend Bob. As usual, he sends you his bitcoin address so you can copy and paste it into your bitcoin wallet. However, if your device is infected with malware of this type, the scammer's address will automatically replace Bob's address the moment you paste it. This means that as soon as your Bitcoin transaction is sent and confirmed, your BTC payment will be in the hands of the scammer and Bob will not receive anything.
To avoid this type of scam, you need to pay close attention to the security of your computer. Beware of suspicious messages or emails that may contain infected attachments or dangerous links. Be careful about the websites you browse and the software you install on your devices. You should also consider installing an antivirus and doing a regular scan of your computer. It's also important to keep your device's operating system (OS) up to date.
Phishing Emails
There are several types of phishing. One of the most common is phishing emails, which attempt to trick you into downloading an infected file or clicking a link that takes you to a malicious website that appears legitimate. These emails are especially dangerous when they imitate a product or service you use frequently.
Typically, scammers include a message asking you to take urgent action to secure your account or funds. They may ask you to update your account information, reset your password, or upload documents. In most cases, their goal is to collect your login credentials to try to hack your account.
The first step to avoiding phishing is to check if the emails come from the original source. If in doubt, you can also contact the company directly to confirm that the email you received came from them. Then you can hover over the email links (without clicking on them) to check the URLs for spelling mistakes, unusual characters, or other irregularities.
Even if you don't find any clues, avoid clicking on the links. If you need to access your account, you must do so through other means, such as manually entering the URL or using your bookmarks.
Ponzi schemes and pyramid schemes
Ponzi or pyramid schemes are two of the oldest financial scams in history. A Ponzi scheme is an investment strategy that allows older investors to make a profit on their investment with newer money. When the scammer can no longer attract new investors, the money stops flowing. OneCoin was a good example of a cryptocurrency Ponzi scheme.
A pyramid scheme is a business model that pays members based on the number of new members they refer. When no new members sign up, the flow of money stops.
The best way to avoid getting trapped in one of these systems is to do your research on the cryptocurrencies you are buying, whether it is an altcoin or Bitcoin. If the value of a cryptocurrency or bitcoin fund depends solely on the arrival of new investors or members, you are likely dealing with a pyramid or Ponzi scheme.
Ransomware
Ransomware is a type of malware that locks victims' mobile or computer devices or prevents them from accessing valuable data, and they must pay a ransom to resolve this lock (payment is usually made in BTC). These attacks can be particularly destructive when aimed at hospitals, airports or government agencies.
Typically, ransomware blocks access to important files or databases and threatens to delete them if payment is not received by the deadline. But unfortunately, there is no guarantee that the attackers will honor their promise.
There are some things you can do to protect yourself against ransomware attacks:
Install antivirus and keep your operating system and applications up to date.
Avoid clicking on suspicious ads and links.
Be wary of email attachments. You should be especially careful with files that end in .exe, .vbs, or .scr.
Back up your files regularly so that you can restore them if you become infected.
You can find helpful ransomware prevention tips and free recovery tools at NoMoreRansom.org.
Conclusion
There are many bitcoin scams to be wary of. However, knowing how these scams work is an important first step to avoiding them all. If you can avoid the most common bitcoin scams, you can keep your cryptocurrency holdings safe.
Do you still have questions about Bitcoin scams and how to avoid them? Check out our Q&A platform, Ask Academy, where the Binance community will be happy to answer your questions.
