Below are some of the famous bitcoin scams:-
Bitcoin Scam 1: Fake Bitcoin Exchanges
In 2017, South Korean financial authorities and the local Bitcoin community exposed one of the most insidious Bitcoin scams: a fake exchange called BitKRX. It presented itself as part of the largest trading platform in the country and took people’s money.
To avoid this type of Bitcoin fraud, stick with popular, well-known Bitcoin exchanges and forums so you get news of fakes quickly.
Bitcoin Scam 2: Ponzi Schemes
Bernie Madoff may additionally be one of the most commonplace Ponzi schemers. He did it with mainstream investments. But the principle of a pyramid scheme, in which you take cash from new traders to pay previous investors, can be applied to Bitcoin scams. In 2019, three guys were arrested in a $722 million cryptocurrency fraud scheme. The men operated BitClub Network for years. The scheme solicited money from investors in exchange for shares of cryptocurrency mining pools. It also supposedly rewarded buyers for recruiting new investors.
Bitcoin Scam 3: Fake Cryptocurrencies
A common scam is to present a new cryptocurrency as an alternative to Bitcoin. The idea is that it’s too late to cash in on Bitcoin and that you need to invest in one of these up-and-coming cryptocurrencies. My Big Coin was shut down for this reason. The fraudsters behind My Big Coin took $6 million from customers to invest in the fake cryptocurrency and then redirected the funds into their personal bank accounts.2
Bitcoin Scam 4: Old School Scams
If someone emailed or known as and said they were from the IRS and that you owed returned taxes that had to be paid immediately, would you send them money? Unfortunately, many human beings do. Instead of having the victim wire money by way of Western Union or switch funds to a financial institution account, con artists are contacting victims and annoying that victims switch bitcoins. The fantastic way to keep away from this rip-off is to be skeptical of cellphone calls or emails that say they’re from a government agency. Legitimate authorities wouldn’t contact you that way—and they won’t ask for bitcoins.
Bitcoin Scam 5: Malware
Malware has long been a way for hackers to get passwords needed to access computer networks or steal credit card and bank account numbers. Now they’re using it to conduct another one of the most common Bitcoin scams. If your Bitcoin wallet is connected to the internet, they can use malware to get access and drain your funds if you’re not protecting yourself from malware.