Considered by many the most revolutionary breakthrough of the 21st century, Bitcoin continues to surprise the world with its allure and resilience.
Launched in 2009 as a way to create a decentralized method of exchanging money, Bitcoin is by far the world’s biggest and most valuable cryptocurrency. It peaked at around $20,000 per coin in 2017 and today’s value is just under half that amount.
The Bitcoin Scam Industry
The rise of Bitcoin and the cryptocurrency industry it fathered has created great interest and attention over the last ten years. Nobody is certain as to the projection Bitcoin’s value will take over the medium-to-long term. This uncertainty, however, has not deterred investors from purchasing and trading the commodity.
Such interest and attention has unfortunately given rise to a number of criminal entities that seek to take advantage of innocent and unsuspecting victims through cybertheft and cryptocurrency fraud.
Recent investigations into the darker side of the cryptocurrency world have revealed that victims have been scammed out of an estimated $16.5 billion in digital currencies since 2011.
Types of Bitcoin Scams
The number of Bitcoin scams that have surfaced are too many to list. Hackers and scam artists continue to develop new ways to defraud their victims. New scams surface almost on a daily basis. Below are a few of the most notorious of these:
Fake Bitcoin Exchanges
The rise in popularity of Bitcoin and other cryptocurrencies has created an increase in fake Bitcoin exchanges. These exchanges deceive their users by offering excellent market prices, giving the impression that the user has made a great investment. The user however, discovers later that the Bitcoin exchange is fake and the scammer has run off with the money.
Bitcoin Ponzi Schemes
Similar to mainstream investment scams, the scammer receives Bitcoins from new investors in order to settle accounts with previous investors. This inevitably results in the investors never receiving a return on their Bitcoin investment.
A common scam is to release a new cryptocurrency to the market that promises to rival existing ones. The premise is that the time to invest successfully in existing cryptocurrencies has lapsed and that it would be a great investment idea to purchase a new up-and-coming cryptocurrency. This new cryptocurrency may be featured on a fresh, professional looking website. You can bet that it will exaggerate their client base. The purpose is to create a ‘fear of missing out’ illusion forcing victims to scramble to jump on board.
Using sophisticated techniques, scammers can access your wallet and deplete your funds if you do not have the required malware protection. Malware can be downloaded by clicking on links from unknown email sources, downloaded from the internet and social media, and elsewhere.
How to Avoid Getting Scammed
The best advice is to trust your instincts and go with the common wisdom that if something seems too good to be true, it probably is.
Other tips to protect yourself from Bitcoin fraud is to:
- Stick to popular, well known Bitcoin exchanges
- Ensure you have updated virus and malware protection
- Keep up-to-date on the latest Bitcoin news and red flags
- Research and double check your sources before making a decision to purchase
- Do not trust anyone that approaches you for an investment opportunity
What to Do if You Have Been Scammed
If you have fallen victim to a cryptocurrency scam, take a look at www.mychargeback.com, a U.S.-based company that has successfully recovered over $15 million since opening their doors in 2016.