Although only the harshest crypto scams tend to make the headlines, there are dozens more scams to every single one that is reported. No matter what form it takes, cryptocurrency fraud is on the increase and between October 2020 and March 2021, around $80 million was lost through crypto scams. Based on the same period the year before, this is a 12x increase.
When it comes to Bitcoin fraud, the strength of the cryptocurrency is often played against the victims. Cryptocurrency is designed to be hard to track and, unfortunately, even more difficult to recoup. Often, once the money has been transferred, it is gone, with the exception of a few cases. With Bitcoin scams on the increase, this means that it is thankfully becoming easier to spot some of the more common scams. Here is an insight into a selection of the most common types of Bitcoin scams and how to spot them.
Fraud and Imposters
In these kinds of Bitcoin scams, traders will pose as someone they are not and often charge a handling or processing fee. This kind of scam has affected all trades, from smaller ones involving just a few hundred pounds, to larger trades where the investor has lost thousands. Although these kinds of Bitcoin scams can trick even the most experienced investor, they tend to catch out new investors who aren’t as experienced.
Remember, always take a moment before you click on links sent via SMS or email and avoid installing apps onto your mobile device unless you are 100% sure of the source sending them. You can always check that the links are legitimate by checking reviews and doing a quick browse online.
Technically speaking, bitcoin is an abstract. It doesn’t take any physical form, but also lacks any backing from regulatory boards or governments. Crypto enthusiasts find this aspect of Bitcoin appealing and many investors believe that the less involvement that the government has in money, the better. But, others prefer to engage in transactions that are hard to trace by the government.
Unfortunately, this lends itself to big advantages for bitcoin scammers, who then set up fake websites with the sole purpose of offering new investors the “chance” to get a good return on investment. The entire cost of these types of Ponzi-style Bitcoin scams is huge and many investors have reported being directed to websites that look like legitimate opportunities for investing in cryptocurrencies. These sites use fake reviews and testimonials to appear credible, but their promises on providing huge returns are no more than lies.
One of the biggest and most recognisable scams in Bitcoin is probably the giveaway scam. This scam started during lockdown in 2020 when, suddenly, a large number of celebrities appeared to be giving away Bitcoin or promoting giveaway offers. From Barack Obama to Kanye West, these seemingly legitimate posts were posted from verified accounts however, shortly after, it was found that this was an unprecedented Twitter hack and scam.
These types of scams, unfortunately, are nothing new and appear to only be gaining momentum. One of the most common ways to spot this type of scam is with celebrity-fronted campaigns online on untrustworthy websites, often leading you to further untrustworthy websites where you are encouraged to send money via cryptocurrency. If anything looks too good to be true, it often is, so avoid at all costs.
What To Do If You’ve Fallen Victim To A Bitcoin Scam
If you’ve realised that you’ve fallen victim to a Bitcoin scam, there are some steps that you can take to immediately minimise the damage. Firstly, begin by protecting your information and change all of your passwords, including that on your crypto wallet, and consider using a VPN in the future when trading. There are some ways in which you can retrace your trades and hopefully recover any lost funds through the use of an investment fraud lawyer.
It’s understandable that, if you’ve fallen victim to a Bitcoin or trading scam, you are more cautious when making future trades, that is if you do want to make trades again in the future. One of the best ways to prepare yourself for the world of cryptocurrency again is to read and learn as much as possible to best protect yourself and your hard-earned money. There are many news forums and trusted sources where you can read more are the different cryptocurrencies, including Bitcoin, and recommended trading tips.