How to avoid Bitcoin and cryptocurrency scams? (2024)

The use of Cryptocurrencies is increasingly widespread, be it the well-known Bitcoin, or any of the others that have been emerging in recent years. Virtual currencies have the advantage of being secure, anonymous, and immediate. One of their main allures is that they do not require a bank or other types of intermediaries to function.

However, virtual currencies also present numerous dangers and risks that you should be wary of before you start to use and invest in them. In this article, we will explain some of the most frequent crypto scams and how to avoid them.

Phishing

Phishing (the theft of online credentials, pretending to be an authoritative figure, company, or individual in order to reveal confidential information), is one of the most common practices used by cybercriminals. Phishing comes in different shapes and sizes and the following list is not exhaustive, but we will give examples of a few different methods used.

Cloned websites

These are websites that appear to be almost identical to the official sites, whether it be an exchange office, an online wallet or an Initial Currency Offer (ICO). These fake pages are spread through online advertising – including Google. Just because a page appears in the list of top pages when you do a Google search, does not mean that it is a legitimate page.

The difference between the official websites and the fake is usually as small as one or a few characters altered in the URL, as the original sites have already bought the web domain with the real name. This method has been used on pages like: MyEtherWallet, Blockchain.info, and the Token Bee ICO.

Fake support teams

These are pages that are almost identical to the original, including the logo and appearance. Cybercriminals send emails to users, supposedly for the Support Team to inform users of technical problems with their accounts and ask them to send the Support Team confidential information to solve it. The fake Support Team mail may even include links to the official webpage in an attempt to convince you that they are genuine.

Telephone scams (vishing)

For this form of scam, criminals get your phone number by tricking your phone company and transferring your line to another SIM card. From here, they have the possibility to enter new passwords and gain access to your online wallets.

Ransomware

Ransomware is a type of malware that hijacks your computer (and the documents that are stored on it) and only releases control in exchange for the payment of a ransom. In this type of scam, cybercriminals often ask for payment in cryptocurrency due precisely because of its advantages, such as immediacy and anonymity. According to some studies, in almost all cases of ransomware (98%), victims must pay the kidnappers in a virtual currency.

Cryptojacking

Mining cryptocurrencies (Cloud Mining) is a free virtual currency creation process. It is the result of solving complex problems through the use of computer equipment. Although it is a legal process, cyber-scammers have begun to hijack groups of private users in order to do the mining through their PCs and thus, earn more money. Of course, they are doing so without the victim's knowledge. The victim may notice their device starting to work more slowly (since the device is mining money).

Fraudulent celebrity advertising

This type of scam uses fake celebrity accounts, who supposedly offer cryptocurrency gifts to fans who send a small sum to a specific address. Scammers create these accounts on social networks using the name of celebrities knowing that they will attract a large number of trusted fans. It has already happened with personalities like Elon Musk and Bill Gates. The worst part is that followers will contribute to the spread of the hoax by sharing the initial post.

P2P exchanges

As you know, P2P (peer-to-peer) networks allow for direct information exchange online and are used, for example, for downloading content such as movies or music. In the case of cryptocurrencies, advertising began to appear in chats and on social media platforms offering the purchase and sale of virtual currency. While it is true that some of these ads are about real companies, many others are scams. They ask you to send money, and upon doing so, the seller will disappear without leaving a trace. Doing these types of transactions with unknown entities is very risky.

How to avoid scams

Now comes the million-dollar question: How do I avoid becoming a victim of one of these scams? Here are some key tips:

• Investigate and research: If you decide to invest in cryptocurrency, fully inform yourself on how it works, which companies can be trusted, etc.
• Pay attention: When you see irresistible offers online, pay attention to the URLs, the appearance of the page and the comments of other users on the networks. If it looks too good to be true, it probably is.
• Keep your private keys safe: Never store them in a digital format (anyone can hack your computer) and don't keep funds online for too long.
• Only do your business with trusted people and companies, so if something goes wrong, you have some kind of legal support.