How do you recognize bitcoin scams?

Bitcoin is new and it works differently than what many people are used to. Unfortunately, scammers take advantage of people’s lack of knowledge to scam them out of money. Don’t become a victim: in this article you can read about the types of scams, how they work and what to look out for.

Scams and fraud are of all times. When the internet was new, internet scams were a big deal. Scammers had discovered all sorts of new ways to trick people into cheating them out of money.

Many people did not know then that e-mails can be forged and that you always have to pay attention to whether the address of the website you visit is correct. It was the era when fraudulent Nigerian princes still regularly victimized and the media was full of warnings about internet scams.

Fortunately, most people today know what to look out for to avoid scams. However, with the advent of Bitcoin, scammers have new opportunities to exploit a lack of knowledge about a new technology. In this article you can read how scams using bitcoin work and what you should pay attention to.

Scams using Bitcoin

It is good to realize that bitcoin-related scams and fraud are not related to the Bitcoin network itself, but to scammers who use it. Also, the Bitcoin network cannot be hacked, but individuals and companies can be hacked.

The Bitcoin network is very reliable: it does exactly what you order it to do. As soon as you send money via the Bitcoin network, it is actually sent. That is why scammers like to use it, because as soon as victims transfer an amount in bitcoin, the loot is in. Bitcoin transactions are irreversible.

Since Bitcoin does not work on the basis of identity, it is then very difficult or impossible to do anything about it or to track down the scammers. It is therefore important to remain alert and aware of the different types of scams that use bitcoin.

NOTE: Scammers are not only active via the internet, but they sometimes also approach people by telephone or in person. They come across as friendly and helpful and can go a long way in instilling trust.

Fraud & theft

  • Do you have your own bitcoin wallet? Then never give your seed phrase to anyone Your seed phrase is the 12 or 24 English words you were given when you created the wallet and it is like a password. If you give that to someone else, they can steal all your bitcoins. A bitcoin company or help desk will never ask you for your seed phrase. If so, you’re probably dealing with scammers.
  • If you do not store your bitcoins in your own wallet, but on a website, at an exchange or in an account of a service provider, there are inherent risks. You literally give them to someone else and only they can return them. So it depends on the reliability of the party to whom you entrust them. In the case of scammers, you can lose everything. Please note: even if it is not a scam , a service provider can be hacked or make mistakes as a result of which funds are lost. Bitcoin companies are regular targets.

Above: Social media scams

  • Does someone promise to send you free cryptocurrency if you send a small amount first? This is a well-known form of scam that occurs frequently through social media, but also through other channels. Scammers regularly use fake accounts that resemble the accounts of famous people. If you send something, you will not receive anything in return.
  • Is a company or other party asking you to pay an invoice in bitcoin ? That is not common and often scam. They probably want a payment via bitcoin, because you can’t get the money back after sending.
  • Does a seller on an online marketplace ask if you want to pay in bitcoin ? Then realize the risk of fraud and ask yourself whether the counterparty can be trusted. Scammers are active who never make themselves heard after receiving the payment.

Fraudulent investment opportunities

Above: example of a fraudulent website

  • Does a website, company or other party offer a daily, weekly or monthly return of a few percent? That is almost always fraud. Companies that claim to know smart trading strategies, trading bots or other methods that guarantee them a higher return are lying. Those are tricks to steal money.
  • Do you see an ad with celebrities claiming to make huge profits through cryptocurrencies? That is almost always fraud. The likenesses of the celebrities are used without their permission and the websites you are redirected to appear real but are fraudulent. The goal is to convince you to send bitcoins to the scammers.


Above: example of a fraudulent website
  • Do you receive emails from companies, investment funds, new blockchain projects or other parties that offer special investment opportunities? Those are mostly spam campaigns from scammers. Don’t fall for it and ignore them.
  • Pump & dumps : Scammers use social media to create as much hype and sensation as possible to drive up the price of a cryptocurrency. When the price has risen enough, they ‘dump’ the cryptocurrency they own at the higher price, eventually causing the price to drop again. Victims thought they were investing in an exciting project or believe they got there early enough to take advantage of the ‘pump’, but are left with a worthless cryptocurrency that is going nowhere.

tech scam

  • Are you being called by a help desk, support department or other kind of employee of a company who offers help, without you having asked for it yourself? Then they are probably scammers. In principle, if you have not indicated that you want to be called, companies will not call you. Don’t transfer money, don’t give them access to your computer through software like TeamViewer or AnyDesk, don’t provide information about your bank account or bitcoin wallet, and don’t install any software they recommend.

Do you notice that they increase the pressure when you counteract? Scammers are sometimes even intimidating. Do not let them get to you. If they claim you’ve been hacked, have a virus, possess banned files, have committed criminal offenses or continue to pressure you in any other way, don’t fall for it and cut off contact.

Phishing & Malware

  • Phishing: Scammers spoof websites, emails, and even letters from existing companies. It tricks unsuspecting victims into thinking they are following the company’s instructions, but in fact they fall into the trap of scammers. Always check whether you are actually dealing with the company in question, and if in doubt, do not take any risks.
  • Are you receiving alerts claiming that your computer, bitcoin wallet or your funds are at risk? Don’t believe that immediately. Sometimes they are fake alerts from scammers trying to play on your fear to convince you to install infected software. If there really is an update, you can usually find information about it on the official website. If you install an update, do it from the official website or from within the software itself.

Above: Example of a fraudulent notification about an update

  • Do you receive emails about software updates for your bitcoin wallet? Be alert and careful as scammers are widely sending out fraudulent ‘phishing’ emails that look like the official emails of real companies. If there really is an update, you can usually find information about it on the official website. If you install an update, do it from the official website or from within the software itself and not via an email you received.
  • New : Scammers recently started sending fraudulent hardware wallets to residential addresses that were captured during hacks. Do you receive a free hardware wallet at your address that you did not order yourself? Then don’t use it and throw it away. You cannot trust it and there is a good chance that it will not secure your bitcoins, but will steal them.

money laundering

  • Is a company or someone asking you to buy bitcoin for them ? Then there may be money laundering, where money launderers want to misuse your identity to ensure that they themselves remain out of sight. You can not only become a victim, but possibly even an accomplice.
  • Work from home fraud: Scammers post jobs for people who want to work from home , often offering relatively high wages. The actual ‘work’ often comes down to buying bitcoin through your own bank account and having it forwarded. Sometimes it’s outright scams, but other times it’s about money laundering where you’re the cat catcher. You can not only become a victim, but possibly even an accomplice.


Report to the police

Anyone who comes into contact with cybercrime has the option of reporting it to the police.

Are you in contact with possible scammers? Not sure or have doubts? Then consider contacting the support department of the bitcoin company you are buying from on your own initiative.

Support departments know the different types of scams and can advise you what to do. They are not there to ‘get’ you, but mainly to help and protect you.

If you contact a support department, do so on your own initiative and do not let yourself be guided by the possible scammers. Then only use the phone numbers, contact form or email address listed on the website of the bitcoin company in question to ensure you don’t get into a conversation with a fraudulent party. Are you a Bitonic customer? Then you can find the contact details on the Bitonic website.

Do you have doubts about the reliability of a bitcoin company? If necessary, contact a competitor to inquire. Although you are not a customer, they also prefer that you are not scammed.

We previously wrote about the various forms of scams that use bitcoin, as well as fake advertisements with famous Dutch people, fraudulent investment websites and phishing attacks. Also read the bitcoin guide Prevent scams.

Footage: Pixabay

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