Sadly, this will be a continuously edited PSA to the public.
Bitcoin has an image problem due to the scammers, fraudsters, grifters that are so prevalent out there preying on the unaware. It is up to the Bitcoin community to police for this type of activity and call out the bad when we see it. Bitcoin, as the fastest growing asset over the last 15 years, is a magnet for this type of activity. If people see a way to profit, they will find a way to get it as easy as they can, and usually that means through illegal and immoral means. If it’s too good to be true, it probably is.
Take a look at this list and protect yourself from the bad guys out there.
Any promise to pay you back more than what you paid in.
There is a persistent scam out there asking you to send in Bitcoin and get double back (or more) what you sent in. There is no legitimate free Bitcoin out there, it has too much value now. One exception would be when groups give it out with no reciprocal request such as when we teach about Bitcoin wallets and send you some free Bitcoin)!
Do not send your hard earned Bitcoin to scammers.
Hacker Infiltrating High Profile Bitcoin Accounts to Shill AltCoins
If your favorite personality all of a sudden starts shilling altcoins, when he’s been a Bitcoiner thru and thru, it’s a scam. Don’t buy the coin.
YouTube “LIVE” Broadcasts Featuring Celebrities Shilling Token Investment Opportunities
This is outrageous. But it also shows a lack of understanding and education on the celebrities part to know what they are hawking to the public. I won’t name names here (you can search easily enough) but know that Bitcoin doesn’t need your endorsement. The US Securities and Exchange Commission has brought the hammer down on these celebrities and token creators for shilling unregistered securities. One such instance of a clawback on money paid to celebrities to hawk an altcoin…
Unsolicited Text and Social Media Scammers (Pig Butchering)
A horrendous term for an equally horrendous scam. Pig-butchering. This is so sad and unfortunate when it happens. An unsuspecting target will receive a text message or social media message promoting making money with solid returns. They will send a link to an exchange. The unsuspecting victim will send money to the exchange and watch as the returns magically ratchet up and up and up. But when you go to withdraw, they ask for more money to release the funds for compliance costs or some such nonsense. Don’t trust a text message with your hard-earned money. Attend a Bitcoin meetup and get good advice on legitimate ways to put your money into Bitcoin safely.
Return on Investment Percentages That Appear Too Good To Be True
Have you been promised 127% returns for staking your Bitcoin? Or even 1000% returns? These returns are not legitimate. Companies such as Celsius.Network, FTX, and various defi exchanges promised high returns in exchange for your coin being held by them for staking and liquidity. The reality was your money was then rehypothecated (taken from you and used for other purposes) as leveraged trades for the company to pay their other holder/investors… a ponzi scheme. These companies gambled your money and lost it all.
If Someone Asks For Your Private Keys, it’s a Phishing Scam
Criminals pose as reputable organizations or individuals to trick users into sharing personal or financial information, such as login credentials or private keys.
The Pump N Dump Rug Pull
Pump and dump schemes are when scammers buy crypto at a low price and then artificially inflate its value through false marketing, only to sell their holdings at the new, higher price, leaving others to lose money. Typically with celebrities or pretty women shilling it. These are also known as Rug pulls – scammers create a project or token, attract investors, and then abruptly remove their assets, leaving investors with worthless tokens.
Fake Exchanges
This is a hard one to determine. Fraudulent websites purporting to be legitimate exchanges, where users can buy and sell Bitcoin, instead steal user funds or personal information. If you have to use an exchange, find a name-brand one such as Coinbase or Gemini. But Bitcoiners can also buy Bitcoin from Bitcoin-Only sources such as Strike App, CashApp, River.com, Swan.com.
Fake Wallets
Bogus wallet apps or websites claim to store Bitcoin securely but instead steal user funds or compromise their private keys. This could be another hard to spot scam. Ask a knowledgeable friend, check app ratings, do research on the wallet. Lots of legitimate wallets are out there such as Blue, Mutiny, Breez, Phoenix, Wallet of Satoshi (not in the US), Blink (not in the US).
Fake ICO’s
Fake ICOs (Initial Coin Offerings) are fraudulent companies that claim to have revolutionary ideas and ask for Bitcoin investments, but ultimately disappear with the funds. This was much more prevalent during the 2017 crypto bull run.
Social Engineering
Scammers use psychological manipulation to trick users into divulging sensitive information, transferring funds, or sending Bitcoin to fraudulent addresses. I’ve heard of one scam where the scammers get everybody in a text message network to send money to the scammer and the scammer will “manage” their funds and tell them when it is good to invest, acting as an illegitimate financial advisor.
Mining Equipment Scams
Fraudsters promise high returns on mining investments but instead siphon funds or fail to deliver promised services. Typically I see this in the mining hardware sales industry. If buying equipment, use reputable sellers. If possible, use an escrow service to hold funds until product is delivered.
It’s a Wrap
To protect yourself from these scams, always research a project, exchange, or individual thoroughly, check for red flags, and exercise caution when dealing with unfamiliar entities. Store your private keys securely, use reputable wallets, and never share personal or financial information with strangers. Stay informed about the latest scams and fraudulent activities in the Bitcoin community to stay ahead of the scammers.
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