The unfortunate reality is that frauds, scams, and hacks are a common occurrence in the world of Bitcoin and cryptocurrencies. Even though Bitcoin has been around for more than a decade, it’s still a relatively new technology in the grand scheme of things. However, amidst this new technology are safe methods to purchase Bitcoin, like Bitcoin Depot ATMs.
You could encounter scams that use social engineering, fake exchanges, rug pulls, and much more. (Don’t worry if you don’t know what those things are, we’ll talk about them in a bit.) Or don’t be surprised if you come across a phishing scam that acts as simply a ploy to gain your trust and run off with your Bitcoin.
To avoid getting swindled by these con artists, you need to stay vigilant and always be on alert when dealing with Bitcoin or any other cryptocurrency. With that in mind, let’s take a look at how to spot Bitcoin fraud.
There are plenty of fraudsters out there who would love nothing more than to separate you from your Bitcoin. With that in mind, here are some signs to look for if you want to spot Bitcoin fraud.
You come across a project or opportunity that promises amazing results, better than anything you’ve seen anywhere else. If that’s the case, your fraud alert should be telling you that the project you’re considering is probably a scam.
Keep an eye out for these types of scams. They look and sound legitimate, but they’re blowing smoke when they promise big returns. Tread carefully, pay extra attention to what’s going on, and be ready to bail at the first sign of fraud.
A common practice used by scammers is manipulating the emotions of their target. If you discover that someone you think you can trust is asking you to send crypto for a reason that doesn’t feel legitimate, there’s a good chance you might be in the process of getting scammed.
If someone is asking for you to pay with your crypto upfront in exchange for great rewards on the back end, you’re probably dealing with a scammer. This is a common tactic used by fraudsters and nefarious parties. Unfortunately, if they get their hands on your Bitcoin, there’s little chance you’ll ever see it again. Remember, if someone asks for Bitcoin with the promise of a huge payout, proceed with caution.
There are several types of frauds and scams out there. Here are a few of the more common ones you may encounter.
There’s a good chance you’ve encountered or heard of a Ponzi scheme at some point. These scams are also known as pyramid schemes, with top-tier users receiving “proceeds” from newer users. It’s been around long before Bitcoin, but it’s now weaseled its way into the world of cryptocurrencies.
Even though the US government has made a concerted effort to root out Ponzi schemes, they are still popping up on a regular basis. Be on the lookout for Ponzi schemes by identifying promises of huge rewards at little or no initial risk to you.
If you’ve never heard of a rug pull, consider yourself lucky. These fraudulent schemes are very similar to ICO scams. (ICO stands for Initial Coin Offering and is a method through which funds are raised for new cryptocurrencies.) A new and exciting cryptocurrency is hyped as the latest and greatest in the world of crypto. The catch is that the coin doesn’t actually exist.
It’s common for a certain group of people to bolster one of these fraudulent coins by heavily promoting it on social media. This is done to drum up interest and onboard users before they get wise to the fact that the coin isn’t real. Once they have your money, the development team just disappears, usually with hundreds of thousands - if not millions - of dollars.
Social engineering in the crypto world works almost the same as it does everywhere else. These are ways hackers and scammers steal user funds through phishing attempts, social media scams, and email hacks.
One common example is how a user may receive an email reminding them to update their information or password on a crypto platform. This is usually a phishing scam used to trick users to give away their login information or other personal data. With that information, a hacker can quickly and easily gain access to the user’s funds.
There are no shortage of social engineering scams out there, so it’s important to be extra diligent when you receive a request to change your password or provide your personal information.
But how can you be sure and how can you protect yourself against these scams? We’ll tell you.
Now that you know some of the types of Bitcoin scams and crypto fraud that exist, you need to know how to protect yourself from getting conned. Here are a few ways you can do so:
If you’ve spent any time in the crypto world, then you should know that no matter what, you should do your due diligence before you sign up to use a platform or exchange. Do as much research as possible, especially if you’re going to be buying, selling, or trading Bitcoin or other cryptocurrencies. Review white papers, read feedback left by other users, and dig around on social media before you make a final decision.
There are plenty of questionable platforms and exchanges in the crypto world, lurking and waiting to take your digital assets the moment you let your guard down. If you plan on buying, selling, and trading crypto, you’re better off using an exchange or platform that’s well-known and reputable.
Sure, some exchanges are giving the rest of them a bad name, but that doesn’t mean there aren’t reliable and trustworthy options on the market. Regardless, if you’re not sure completely comfortable with the platform you’re using, don’t hesitate. Move on to another option to ensure you’re not falling victim to a scam.
Above all else, no matter what you’re doing in the cryptosphere, be cautious. Always confirm email addresses, websites, and requests for information. If any of the above have weird fonts or spelling errors, there’s a good chance it’s fake.
Don’t be afraid to explore social media for information on projects and cryptocurrencies that seem too good to be true. Root around on the project’s website to determine how reliable and trustworthy it really is. For example, a crypto with no development or leadership team is probably looking to take your money and run.
Of course, there are safe and secure ways to add Bitcoin to your wallet. One such way is through a Bitcoin Depot ATMs. We provide a transparent, reliable, and trustworthy Bitcoin buying process that ensures your Bitcoin arrives safely in your digital wallet.
Plus, you can use the wallet built right into the Bitcoin Depot app to protect your funds. Head over to a Bitcoin Depot ATM and add some BTC to your digital wallet today!