6 Common Bitcoin Scams That You Must Avoid

There are people who have become millionaires by trading in Bitcoin. This is the most popular and expensive cryptocurrency. This is the reason why it not only attracts traders but scammers as well. You might have heard of the Bitcoin pyramid scheme scam or Bitcoin ponzi scheme. However, there are some more scams that you must be aware of. Cryptocurrencies are not regulated.

So, let’s learn about these scams:

Fake Bitcoin Exchange 

BitKRX is one of the examples of fake Bitcoin exchanges. This fake bitcoin exchange was exposed by the South Korean Bitcoin community and financial authorities. This exchange claimed to be a part of the country’s largest trading platform.

These exchanges ask users to provide their personal data to sign up. After that, victims complete the KYC process and make a deposit. During the KYC process, the fake site collects the victims’ personal ID information.             

Ponzi Schemes

Many con artists have used these tricks to make money by scamming investors. Ponzi schemes are also applied to Bitcoin and other cryptocurrencies. You must be aware of the Bitcoin pyramid scheme scam. Three men operating BitClub Network were arrested in 2019. This cryptocurrency scam involved $722 million. The Bitcoin Ponzi scheme is a scam in which an investor gets rewards for recruiting new investors. However, this is a Bitcoin pyramid scheme scam. 

Fake Cryptocurrencies 

As you already know, no other cryptocurrency is as expensive as Bitcoin. This is the reason why some people think that it is too late to invest in Bitcoin. Such investors fall victim to fake cryptocurrencies. Con artists target such investors to attract investment for their up-and-coming cryptocurrencies which are fake cryptocurrencies. Once you invest in a fake cryptocurrency, all the funds go to the personal account of the scammer. A fraudster made $6 million with My Big Coin. 

Old School Scams 

You received an email or call from someone claiming to be from the IRS. The person asked for back taxes that must be paid immediately. Will you make this payment? Some people do pay. The con artist does not ask for money via Western Union. You are asked to transfer Bitcoin. It is easy to avoid such scams. You simply have to be skeptical. No legitimate agency asks for Bitcoin. Don’t forget to report such calls or emails. 

Malware

This is an old trick hackers use to get passwords. These passwords help them in stealing bank account numbers and credit card information. Now, hackers are using this trick for Bitcoin scams. They want to access your Bitcoin wallet and once they have got access, your funds are gone. Therefore, make sure that your Bitcoin wallet is protected against malware. Be aware of programs making promises such as free Bitcoin mining.

Pump-And-Dump Scam 

This is an old trick used in the stock market. In this trick, scammers work together and invest in penny stocks. As a result, the price of stocks has increased. They make big promises to attract investment from outsiders. Now, this technique is used in Bitcoin trading as well.