The cryptocurrency, Bitcoin, is a digital currency as well as a payment option that does not depend on a bank, government, or any centralized authority for transaction and verification. Instead, a decentralized authority is in charge of its maintenance and management. Bitcoin is also dependent on a decentralized system for its mining, and the system also maintains a record of its distribution in the digital currency market.
As we know, cryptocurrency has derived its name from encryption. The security of online payments and the circulation of Bitcoin in the market are determined by encryption algorithms. Bitcoins are popular and treated as an investment option these days, but they can also be used in day-to-day transactions.
Bitcoin Scammers and their methods of working
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Bitcoin has been a common ground for scammers since it helps them to earn a fortune. Moreover, the absence of strict regulations has made the field of cryptocurrencies more vulnerable to scammers perpetrating to different types of Bitcoin scams.
Here are some strategies scammers own to work their way through the field of cryptocurrency,
- Fraudulent websites
- Spyware and Phishing scam
- Pump and Dump scam
- Affinity Group Forgery
- Extortion or Blackmail scam
- Impersonation of Government agencies
- Initial Coin Offering (ICO) scam
- Impersonation of an investment fund recovery agency
- Fake dating app profiles
- Fictitious employers and job offers
- Payments in Bitcoin
Be wary of fraudulent websites:
Scanners create fraudulent websites that are designed to look like legitimate crypto coin trading platforms. The websites look identical as scammers imitate the theme, design, and even domain name of the legitimate websites which they opt for perpetrating mischief. They often do that to garner information regarding the victim’s digital wallet, or sometimes they let the victim withdraw fake bitcoins to lure them into investing more money. They freeze users’ accounts when they garner the money they desire. Scammers intend to harness a massive amount of money from the victims they target.
Spyware and Phishing scam:
A phishing scam occurs when scammers send victims emails in order to trick them. In the emails, they provide malicious links that redirect them to the website that scammers design to cause harm. Sometimes they deploy spyware in our devices through emails which keep an eye on our every activity and help the scammers to collect our personal information. Thus, scammers collect information related to investors’ digital wallets and steal Bitcoins, as well as other crypto coins.
Pump and Dump scam:
A widespread, commonly seen scam in stocks and investment markets is the Pump and Dump scam. As the name of the scam suggests, scammers first deliberately inflate the price of Bitcoins and stocks by investing in massive amounts or by spreading false news. Then, once they successfully increase the price, they sell all the Bitcoins for a tremendous profit.
Affinity Group Fraudulence:
In affinity group fraudulence, scammers search for groups or organizations which follow a certain belief or share a common interest, race, or ethnicity. Then, they join the group pretending to be one of them. Scammers get them interested in passive incomes and influence them to invest in Bitcoins. They generally target the leader as they believe that if they can manipulate the leader, the other people in the group will follow willingly.
Extortion or Blackmail scam:
Extortion scams occur when scammers garner investors’ personal information and then use it for their personal gain. They keep track of the investors’ activity they target, like visits to adult websites and apps and watching adult videos. They then use the information to threaten the victims that they will leak this information and ask for Bitcoins. Some scammers who perpetrate Bitcoin scams, resort to spyware in order to garner this information.
Impersonating Government Agencies:
As mentioned above, everything is done by decentralized authorities, from the issuance of bitcoins to managing the records of their transactions. Therefore, any process of cryptocurrencies does not involve government agencies in any way. Therefore, one needs to be wary of the calls they receive that claim to be from a government agency, asking for details regarding your digital wallet. Needless to say that they are perpetrators performing cryptocurrency scams.
Initial Coin Offering (ICO) Scam:
Cryptocurrency start-up companies often raise money to release a new coin in the market. They offer high returns to lure investors into buying them. This method of raising money is known as an Initial Coin Offering (ICO). But an Initial Coin Offering scam happens when scammers, pretending to be an authentic company, claim to mine a new coin, raise money in order to do that but do not fulfill what they promised or disappear with the money.
Impersonating an investment fund recovery agency:
There are many investment fund recovery organizations that have emerged as saviors for investors who lose in the process of investments. Scammers pretending to be someone from an investment fund recovery organization contact the investors and promise them as a legitimate organization does. They ask for money upfront to make their promises come true, but in reality, they escape with the money and ignore victims’ calls once the transaction has been completed.
Scammers prevalent in dating apps:
Bitcoin scammers are also prevalent in dating apps. Their mode of working is they first build rapport with people they target and show a great interest in stock markets and cryptocurrencies, and try to perpetrate mischief. For example, scammers tell them they are in urgent need and pretend like the person they target is the only one who can save them and ask for transactions in Bitcoins. Sometimes they just lure the victim’s interest in investing in Bitcoins and then somehow fool the person into giving them their personal information related to their wallet.
Fictitious employers and job offers:
Scammers who perpetrate crypto scams, disguised as recruitment HR of a company that handles mining and circulation of Bitcoins, contact job seekers from employment-oriented apps and websites and offer them jobs that do not exist. When they find their target convinced, they pose their offer of getting employed in exchange for Bitcoins. Think twice before you believe in such offers, as only a few legitimate companies ask for money upfront in order to hire candidates.
Payment in Bitcoin:
Despite being known as a popular investment option, many investors are unaware that it can be used for regular transactions, and among the rest, many investors do not elect Bitcoins for day-to-day payments. So, when someone asks for payments in cryptocurrencies, it is advisable to be skeptical in these situations. Transactions may follow future regrets.
Summary:
As we all know that forgery in the platforms of passive incomes thrive on people’s ignorance. However, being knowledgeable serves as a great countermeasure in restraining the schemes these scammers own to penetrate defenses as it helps us understand the nature of the Bitcoin scam. Furthermore, a zero trust approach can save you from future regrets.
