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Scams » Scam And Its Types » Bitcoin Scam



Bitcoin scam is an open-source, decentralized digital cryptocurrency scam. Empowered by the Blockchain technology, its defining characteristic is it's decentralization as the system works without a central bank or single administrator. Bitcoin can be sent anywhere, anytime (almost) for free, the network is peer-to-peer and the transactions takes place directly with the end users without an intermediary. People can send or receive money without being linked to real identity across the internet including fosterage persons. Bitcoins are created as an alternative for other currencies, products and services. Scammers have been focalizing people since the invention of money and bitcoin in particular can be used easily for several reasons:
• Very few people really understand it.
• It's more unanimous.
• It's largely unrelated.
Bitcoin Scam


1. The Fragment Ploy :

Bitcoin Savings and Trust was sub alternate. It started out as an ICO (Initial Coin Offering) scam based around a simple Ponzi scheme, which is nothing but a fraudulent investment operation where the operator provides fabricated reports and generates returns for older investors through revenue paid by new investors, and then kept on going. Front on investors were promised amazing returns like 7 percent per week, and ultimately more than 2,65,000 bitcoins were stolen via scam. The whole scheme finally collapsed in 2012, and the organizer Trendon Shavers was caught up and eventually led to his imprisonment and a $40 million fine. The bitcoins that he stole alone were worth around $97 million at the time of his sentencing.

Ponzi Scheme

2. Silk Road's Ridiculous Email Trap :

Silk Road was an unfamous black market for selling and buying drugs and other various illegal things over the internet. The government agreed to auction to offer the Bitcoins seized from Silk Road so it contacted active participants to let them know about the auction. Unfortunately, due to a classic "bcc" email mistake, all potential people could see everyone the email was sent to. That list was quickly copied, stolen and sold. The result was a wave of scam emails sent to all these people who were already interested in buying bitcoins. These emails assumed to be from the government or related agencies, probing out sensitive information that allowed the scammers to steal Bitcoins from those victims.

Email Trap

3. Bitcoin Gold and False Promises :

Bitcoin gold was a project designed to invent a new model of cryptocurrency. Though the model was a little shady, but nothing was particularly illegal. Expert scammers built a website called "" which offered users an opportunity to generate Bitcoin gold wallets. All they had to do was submit their unique private keys used to protect their cryptocurrency wallets. More than $3 million bitcoins were stolen by the scammers, along with a number of other cryptocurrencies. Even the creators of bitcoin gold were roped into the scam.


1. Fraudulent Bitcoin Exchanges :

If you visit any exchange site the first thing you need to do is to make sure it's HTTPS secured and not HTTP. This means that the web traffic is uncorrupted and secured; if it's just HTTP without the "S" that is a huge risk and means stay away. Another thing to look out for are fake exchanges that offer selling Bitcoin for visitors. On these sites you'll see a web form to enter your email and amount you would like to sell. After submitting, you will be presented with a QR code to assign it to your bitcoin. But the money never reach.
Bitcoin Exchange

2. Fake Bitcoin Wallets :

Spotting fake Bitcoin wallets is teadious, because wallets primarily are for storing bitcoin and not trading it. Typically, fake Bitcoin wallets are just scams to infect your machine with the objective of stealing your passwords or private keys. Just like with fake Bitcoin exchange sites, you should check for secured websites. It may be hard to tell if a wallet is fake ,however, a good practice is to ask your friends if someone has used the wallet before.

3. Phishing Scams :

This is a very common scam. Phishing is when someone tries to hoax you into thinking they are a trusted and secured company or website by having you visit a fake one. Typically, phishers associate with you via email or through a fake web pop ups. Best practice is not to click on any hyperlinks in an email or open attachments. Go directly to the website if you have to do business there. A common tactic is to make a hyperlink look real, but if you hover over it you will see the fake website URL. Always check the sender email to view where it's coming from. With fake web pop ups, you have to be careful on the site you are redirecting. The top result could actually be a notice via Google for example, but may result being a fake Bitcoin wallet. Best practice is not to visit sponsored ad pop ups in search results, and just manually type the real website address directly into your browser.
Phishing Scam

4. Ponzi Scams :

Ponzi scams are promises from websites or some similar extravagant claim. Ponzi sites may be harder to spot, but they're easy to figure out once you understand about it. Ponzi sites also have referral programs. This is another red flag, as many times you will see on social media the shared links with referrals within the URL domain. Usually it will look something like this :

5. Cloud Mining Scams :

This is quite tricky because not all cloud mining operations are scams. Some are completely appropriate, however many are scams, so it's best to warn people especially beginners to be aware when looking into cloud mining. Cloud mining is shared mining high power, where people put their funds together to lease Bitcoin mining machines. For consistent operations, this works and can be beneficial. For scams, the results may be low or non-existent. As we've settled above, it's best to trust your intuition and look for red flags.

Cloud Mining


Eventhough there are quite a few scams in the world of Bitcoin, however, you don't have to become a victim. At the end of the day, you can avoid most of the scams by simply being alert and aware of them. With that said, if you're involved or want to get involved in the Bitcoin movement, keep an eye out for the scams established above.
Beware of Scam


1. South Korea dismantles $24 million Bitcoin Pyramid Scheme :

A South Korean court has fined two individuals found guilty of operating a bitcoin pyramid scheme that gathered over approx. $24 million, from investors. According to Korean news agency Yonhap, the first individual is seen as the mastermind of the multi-level investment scheme based out of the Philippines that promised investors high returns through investments in bitcoin. The other individual, who served as chairman of the company managing the investments, is currently collaborated with Interpol engaging in an active search for the scammer.

2. Japanese Police arrest 12 people in $1.8 million fake bitcoin scam :

According to the report, the accused men presented a suitcase containing $200 million, a majority in fake cash, fooling the agent in the process. Falling for the cheat, the bitcoin seller transferred his cryptocurrency to a wallet account of an exchange operator in Yokohama. The men falsely claimed they hadn't received the coins.
Japanese Bitcoin

3. Indian Woman Shares Credentials with Scammers, Loses $55,000 in Bitcoin:

Indian police in the capital city of Delhi are reportedly investigating a bitcoin theft wherein a woman's wallet was supposedly 'hacked' by scammers to approx. $54,000 in current prices.

4. Austrian Bitcoin Scam : 10,000 Victims Lose $115 Million :

Details are emerging about an Austrian investment scheme, called "Optioment", where its operators have reportedly stolen some approx. $116 millio from over 10,000 victims invested in the scheme. The scheme ran a website, now offline, claiming to be a 'premier global Bitcoin investment product'.
Austrian Bitcoin

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