Bitcoin. We hear a lot of talk about Bitcoin, but do you understand what it is? Bitcoin is a cryptocurrency, a form of electronic cash. It is a decentralized currency without a central bank or a single administrator. It is a digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds for online transactions.<\/p>\n
Bitcoin is mostly anonymous and mostly anonymous. The jury is still out on the legality and usefulness of bitcoin, leaving it in a grey area at the moment. Nonetheless, Bitcoin has become a very hot commodity, and because of that, it is now the target of scammers and fraudsters. This article will educate you on what to look for to avoid becoming the victim of an online Bitcoin scammer.<\/p>\n
Bitcoin scams are much more challenging to identify mainly due to the fact that bitcoin is an unregulated form of currency that is essentially a mere number that is only given value based on an agreement. It is basically like a money bag with a lock on it. The code is given to the recipient of the bitcoin. Scammers are having a heyday, and there are numerous bitcoin scams.<\/p>\n
Malware is the hallmark of many online scams. Cryptocurrency poses an increased threat in and of itself. Recently, a tech support site issued a warning about cryptocurrency targeting malware to warn customers about sending crypto coins via transactions.<\/p>\n
This type of malware called CryptoCurrency Clipboard Hijackers, which manages 2.3 million bitcoin addresses, works by monitoring the Windows clipboard for cryptocurrency addresses. If one is detected, they will swap it out with an address they control.<\/p>\n
They switch addresses used to transfer crypto coins with one the malware controls, thus transferring the coins to scammers instead. According to the Asia Times<\/a>, even macOS malware has been connected to malware scams involving cryptocurrency investors using trusted sites such as Slack and Discord chats, coined “OSX\/Dummy”.<\/p>\n Another popular scam is for the scammer to pose as an affiliate branch of a respectable and legitimate organization. South Korean scam BitKRX presented itself as a place to exchange and trade bitcoin but was fraudulent. The fake exchange took on the part of the name of the real Korean Exchange (KRX) and scammed people out of their money by posing as a respectable and legitimate cryptocurrency exchange.<\/p>\n Ponzi bitcoin scam is the worst combination of words imaginable for financial gurus. Several organizations have scammed people out of millions with Ponzi schemes using bitcoins, including the South Korean website Mining Max. The site is not registered with the U.S. Securities and Exchange Commission, promised to provide investors with daily ROI’s in exchange for an original investment and commissions from getting others to invest (basically, a Ponzi scheme).<\/p>\n The site was asking people to invest $3,200 for daily ROI’s over two years, and a $200 referral commission for every personally recruited investor. The fraudulent scam was reported by affiliates resulting in 14 arrests. Some governments are considering putting their currencies on the blockchain system. The biggest challenge facing bitcoin now is the potential for misuse.<\/p>\n This is a classic scam involving bitcoin and cryptocurrency is simply, fake currency. One such arbiter of this faux bitcoin is My Big Coin. Plain and simple, it is phony bitcoin. My Big Coin is a cryptocurrency scam that lured investors into sinking an alleged $6 million and was sued by the US FTC. Among other things, the site fraudulently claimed that the coin was being actively traded on several platforms ad misled investors by claiming it was also partnered with MasterCard.<\/p>\n[aesop_image img=”https:\/\/socialcatfish.com\/scamfish\/wp-content\/uploads\/2019\/12\/My-Post-7-1.jpg” panorama=”off” imgwidth=”100%” align=”center” lightbox=”off” captionsrc=”custom” captionposition=”left” revealfx=”off” overlay_revealfx=”off”]\n Along with the rise in blockchain-based companies, fake ICO’s became popular as a way to back these new companies. Given the unregulated nature of bitcoin, the door is wide open for fraud.<\/p>\n Most ICO frauds have taken place through getting investors to invest in or through fake ICO websites using faulty wallets or posing as real cryptocurrency-based companies. The U.S. Securities and Exchange Commission issued a warning in 2017 about ICO scams and faux investment opportunities in 2017.<\/p>\n For example, Bitcoin Savings and Trust was fined $40.7 million by the SEC for creating fake investments and using a Ponzi scam to scam investors. The organization’s leader allegedly scammed investors into giving him 720,000 bitcoins promising a 7% weekly interest on investments, which he then used to pay back old investors and grow his accounts.<\/p>\n Bitcoin investors have been duped by this scam in which there is a promise of bitcoin gold. The bitcoin gold allegedly duped investors out of $3.2 million in 2017 by promising to allow them to claim their bitcoin gold.<\/p>\n The website used links of a legitimate site (Bitcoin Gold) to get investors to share their private keys or seeds with the scam. Before the fraud was done, the website managers (scammers) were able to get their hands on $107,000 worth of bitcoin gold, $72,000 of Litecoin, $30,000 of Ethereum, and $3 million of bitcoin!!!<\/p>\n The pump and dump scam is especially dangerous on the internet. The basic idea of this scam is that investors hype or pump up a particular cryptocurrency, which is usually an alternative coin that is very cheap but the high risk on investor websites and blogs. Once the scammers pump up this particular coin, which skyrockets very quickly, they cash out and dump their bitcoin onto the na\u00efve investors who bought what they thought was the next big thing.<\/p>\n There is no one formula to guarantee you can avoid being scammed, but it is critical to keep up to date, stay alert, and be aware of the latest happenings regarding scams. A few helpful hints:<\/p>\n It is never truly safe to enter your private key or mnemonic phrase for a pre-existing wallet into any online website. When you want to sweep new coins for a pre-fill wallet address, send your old coins to a new wallet first before you expose the private keys of the original wallet. Private key management dramatically reduces your risk of being scammed.<\/p>\n In summary, knowledge is power. This article identifies the most common bitcoin scams and also provides tips for how not to become a victim of bitcoin scams.<\/p>\n Also, you should always contact Social Catfish<\/a> for additional assistance if anything seems suspicious. Utilize these professionals for help before you make a mistake and open yourself up to becoming the next victim of bitcoin scammers.<\/p>\nFake Bitcoin Exchanges: BitKRX<\/h3>\n
Ponzi Scheme: Mining Max<\/h3>\n
Fake Bitcoin Scam: My Big Coin<\/h3>\n
ICO Scam: Bitcoin Savings and Trust and Centra Tech<\/h3>\n
Bitcoin Gold Scam: MYBTGWallet.com<\/h3>\n
Pump and Dump Scam<\/h3>\n
How to Avoid Being a Victim of Bitcoin Scams<\/h2>\n[aesop_image img=”https:\/\/socialcatfish.com\/scamfish\/wp-content\/uploads\/2019\/12\/My-Post-6.jpg” panorama=”off” imgwidth=”100%” align=”center” lightbox=”off” captionsrc=”custom” captionposition=”left” revealfx=”off” overlay_revealfx=”off”]\n
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