Sophia's Blog

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Bitcoin scams and other crypto schemes

Why are there more bitcoin scams?

Bitcoin scams and other crypto schemes
Bitcoin scams and other crypto schemes

Most people don’t know how bitcoin scams work. Some of you might have jumped to this section! Don’t worry, though. Cryptocurrency can be a tricky subject for most people.

You probably know bitcoin because of news reports on people getting rich from it. Your social media feeds might be filled with posts about crypto.

If not, you probably heard of big celebrities promoting them. For example, you may have followed Tesla CEO Elon Musk and his Dogecoin tweets earlier this year.

In other words, most people are familiar with bitcoin as a mysterious asset that celebrities like. The FTC says this gives the cryptocurrency trend a sort of “Wild West vibe.”

Unfortunately, scammers see this as a great opportunity. Many of them know this lack of knowledge about cryptos. As a result, they take full advantage of it.

What are the types of bitcoin scams?

  • Crypto investment scams – A company or person may promise you financial freedom with cryptos. Just buy some coins, then transfer them to this entity, and they promise to pay you back with interest. Sadly, you can’t get your money back unless you pay them more.
  • Blackmail – You may get a message from an unknown email address about your embarrassing photos. Then, they’ll threaten to release the pics if you don’t send cryptos. The FTC says to report such incidents to the FBI as soon as possible.
  • Social media scams – Someone may create a fake account of one of your friends. Afterward, they’ll pose as your friend and ask for cryptos. Others go a step further by hacking celebrity social media accounts. Then, they’ll use it to request cryptos from their followers.
  • Fake websites – Tech-savvy scammers may create fake websites. If you click them, they could send ransomware that locks your PC until you send cryptos. Others may collect your personal information and use that for other schemes.
  • Pump and dump scheme – This often involves a person who owns a certain cryptocurrency. They “pump” the coin by convincing people to invest, jacking up the price. Once it hits a high enough price, they “dump” by selling all the coins. Billionaire Mark Cuban got hit with this when he invested in Iron Titanium.

How do I avoid Cryptocurrency scams?

  • Do your own research (DYOB) – This is a common term among crypto investors. Yet, this works for other types of investments. People are more likely to fool you if you barely know about assets. Always learn as much as you can before starting any investment.
  • Keep calm, avoid FUD – This is another term that means Fear, Uncertainty, and Doubt. You may have felt it when people are following a trend you haven’t yet. First-time investors may sell all their coins after they see dips in value.
  • Check where you’ll buy crypto – People often buy bitcoin from online cryptocurrency exchanges. You should be careful in choosing yours, though. After all, you’ll have to fill out your account with sensitive info, and you’ll also put lots of money in there, too!
  • Decide where you’ll store cryptos – Crypto exchanges can hold coins for users. Yet, you could place your cryptos in a digital wallet for added protection. Even better, put them in a hard crypto wallet for utmost security.

Please note that this article is meant for educational purposes. As we’ve stated throughout, research these assets yourself. Make sure you understand the risks before investing.

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