TL;DR

There are several cryptocurrency scams in the blockchain sector. Some of the most common include blackmail, fake exchanges, fake giveaways, social media phishing, copy-and-paste malware, phishing emails, pyramid and Ponzi schemes, and ransomware.

Let's briefly discuss each of them so you can avoid the most common scams and keep your cryptocurrency assets safe.

Introduction

Whenever a new technology is introduced to the world, scammers will continue to look for a way to gain an advantage. Unfortunately, Bitcoin offers cryptocurrency scammers an interesting opportunity as it is a borderless digital currency.

The decentralized nature of Bitcoin allows you to have complete control over your investments. However, it also makes it more difficult to define an appropriate regulatory and enforcement framework. If scammers somehow manage to trick you into making mistakes when using Bitcoin, they could end up stealing your BTC and there is practically nothing you can do to get your cryptocurrencies back.

That said, it is essential to understand how scammers operate and learn how to identify signs of risk. There are many scams associated with Bitcoin, but some are more common than others. Therefore, we will discuss eight of the most common Bitcoin scams and what to do to avoid them.

Common Scams Associated with Bitcoin (and How to Avoid Them!)

Blackmail (Blackmail)

Blackmail, or Blackmail, is a well-known method used by scammers. They threaten to disclose the victim's confidential information unless they receive some kind of reward for not doing so. This reward is usually delivered in cryptocurrencies, with Bitcoin being the most common of these.

This type of scam works by scammers finding or falsifying sensitive information about you and taking advantage of that information to force you to send bitcoins or other forms of money.

The best way to prevent scammers from blackmailing you with your bitcoins is to be careful when setting your login credentials. It is important to be aware of the websites you access and the people you provide information to. It is also advisable to use two-factor authentication whenever possible. If you know that the information used to attempt the scam is false, you don't need to worry.

Fake Exchanges/brokers

As the name suggests, fake exchanges are fraudulent copies of legitimate cryptocurrency exchanges. Typically, these scams appear in the form of mobile apps, but you can also find them as desktop apps or fake websites. Be careful as some fake exchanges are very similar to the original ones. They may seem legitimate at first glance, but the goal is to steal your money.

Typically, these fake exchanges will attract cryptocurrency traders and investors by offering free cryptocurrencies, competitive prices, low exchange rates, and even gifts.

To avoid being scammed by a fake exchange, you must save the real link (URL) and always check it before logging in. You can also use Binance Verify to check the legitimacy of URLs, Telegram groups, Twitter accounts, and more.

When it comes to mobile apps, be sure to check the developer information, number of downloads, reviews, and comments. Check out Common Mobile Scams for more information.

False draws

Fake sweepstakes or giveaways are used to steal your cryptocurrencies by offering something free in exchange for a small deposit. Typically, scammers ask you to send funds to a bitcoin address first, claiming that you will receive more bitcoins in return (e.g. "send 0.1 BTC to receive 0.5 BTC"). But if you make these bitcoin transactions, you will receive nothing and will not be able to recover your sent funds.

There are many variants of sweepstakes scams or fake prizes. Instead of BTC, some scams will request other cryptocurrencies, such as ETH, BNB, XRP, among others. In some cases, they may ask for your private keys or other sensitive information.

This type of scam tends to be most common on Twitter and other social media platforms, where scammers use popular tweets, viral news, or advertisements (such as a protocol update or an ICO).

The best way to avoid fake sweepstakes/prizes scams is to never participate in any type of offer where you need to send something of value first. Legitimate giveaways and sweepstakes will never require you to send funds.

Phishing on Social Networks

Social media phishing is a common Bitcoin scam that, like fake sweepstakes, you're likely to encounter on social media. Scammers create an account posing as someone respected and with a high level of authority in the crypto industry (also known as impersonation). Then they offer fake sweepstakes or giveaways through tweets or direct chat messages.

The best way to avoid phishing scams on social media is to verify that the person is really who they say they are. There are often indicators of this on certain platforms, such as the blue verification markers on Twitter and Facebook.

Malware Copy-and-paste

Copy-and-paste malware is a very sneaky type of scam that scammers use to steal your funds. This malware steals data copied to the clipboard and if you are not careful, it can send money directly to scammers.

Let's say you want to send a BTC payment to your friend Bob. As usual, it sends you your bitcoin address so you can copy and paste it into your bitcoin wallet. However, if your device is infected with copy-and-paste malware, the scammer's address will automatically replace Bob's address the moment you paste it. In other words, as soon as your transaction is sent and confirmed, your BTC payment will be in the scammer's hands and Bob will receive nothing.

To avoid this type of scam, you need to be very careful about your computer's security. Be wary of suspicious messages or emails that may contain infected attachments or dangerous links. Pay attention to the websites you visit and the software you install on your devices. You should also consider installing a good antivirus and scanning regularly for threats. It's also important to keep your device's operating system (OS) up to date.

E-mails de Phising

There are several types of phishing. One of the most common involves the use of phishing emails that attempt to trick you into downloading an infected file or clicking a link that takes you to a malicious website that appears to be legitimate. These emails are especially dangerous when they imitate a product or service that you use frequently.

Typically, scammers send a message asking you to take urgent action to protect 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 email phishing scams is to verify that the emails are coming from the original source. If in doubt, you can also contact the company directly to confirm that the email you received is legitimate. You can also hover over email links (without clicking) to check the URLs for spelling errors, unusual characters, or other irregularities.

Even if you don't find anything suspicious, avoid clicking on the links. If you need to access your account, you must do so by other means, such as typing the URL manually or using the link saved in your favorites.

Ponzi schemes and pyramids

Ponzi schemes and pyramids are two of the oldest financial scams in history. A Ponzi scheme is an investment strategy that pays returns to older investors with new investors' money. When the scammer can no longer attract new investors, the money stops flowing. OneCoin was a good example of a crypto Ponzi scheme.

A pyramid scheme is a business model that pays members based on the number of new members they sign up. When new members stop signing up, the money flow stops.

The best way to avoid any of these scams is to do your research into the cryptocurrencies you buy – whether it's an altcoin or Bitcoin. If the value of a cryptocurrency or Bitcoin fund depends purely on the adoption of new investors or members, it is probably a Ponzi or pyramid scheme.

Ransomware

Ransomware is a type of malware that locks victims' mobile devices or computers or prevents them from accessing valuable data – unless the victim pays a ransom amount (usually in BTC). These attacks can be particularly destructive when targeted at hospitals, airports and government agencies.

Typically, ransomware blocks access to important files or databases and threatens to delete them if payment is not sent within a deadline. Unfortunately, there is no guarantee that attackers will deliver on their promise.

There are some measures and precautions to protect yourself against ransomware attacks:

• Install an antivirus and keep your operating system and applications up to date.

• Avoid clicking on suspicious ads and links.

• Be wary of attachments in emails. Be very careful with files ending in .exe, .vbs or .scr

• Back up your files regularly so you can restore them if your computer or device becomes infected.

• You can find helpful ransomware prevention tips and free recovery tools at NoMoreRansom.org.

Final considerations

There are many scams involving Bitcoin. However, knowing how these scams work is an important first step to avoiding them completely. If you can avoid the most common scams, you can keep your cryptocurrency holdings safe and sound.