[ad_1]
This year has brought considerable growth to the crypto community. Notably, Bitcoin has regained much of its lost value and is well on its way to new all-time highs. Along with this added value comes a number of Bitcoin scams. Unfortunately, the unregulated and private nature of the market makes it ideal for scammers looking to prey on new investors.
Bitcoin has a tendency to get a lot of attention when it enters a bull market. This focus helps drive new users into the market. Problems arise when new investors lack the experience to identify common Bitcoin scams, including fake ICOs, shady trading groups, and fraudulent exchanges. Analysts agree that only education can prevent users from falling victim to these ever-changing patterns.
Bitcoin is forever
The immutable and unalterable nature of Bitcoin means that once your cryptocurrency is sent to another person, there are no refunds or chargebacks. Bitcoin’s peer-to-peer nature makes it ideal for these types of transactions. However, new users are more likely to be unaware of this fact and treat their cryptocurrencies as if they are spending
Bitcoin Scams via Bitcoin News
fiat currency on a credit card or other financial instrument that allows for refunds.
2020 – A mix of old and new Bitcoin scams
This year has seen a combination of patterns so far. These scams range from classic old-school fraud to new industries plagued by fake companies. Here are some of the most popular Bitcoin scams to avoid for 2020.
Sant’Antonio chain
The chains of Sant’Antonio are one of the oldest scams around. In this scenario, someone will send you a random letter stating that you will receive a great reward if you forward the message to others. Of course, you have to put in some money to be “eligible” for these mystical profits. Recently, chain letters have transformed from Western Union and money gram-based schemes to crypto-based alternatives.
Chains of St. Anthony prey mainly on the elderly. They often promise some form of religious endowment or other spiritual blessings to motivate older people to participate in the scam. Unfortunately, these scams could be one of the first ways an elderly individual encounters Bitcoin. To avoid losses, never send loans to people you don’t know or companies that seem suspicious to you.
Social media hacks
Hackers made a brazen social media hack this year. In the incident, hackers took control of the Twitter backend to gain access to multiple high-value accounts. Once they had access to these accounts, they started posting that they would match all donations made through Bitcoin.
It was later revealed that Twitter employees had been hacked. This allowed hackers to access what the developers called “God Mode”. Insanely, the hackers even gained access to the account of former President Obama and other government officials. In total, $ 121,000 worth of Bitcoin was stolen.
Elon Musk Bitcoin Scam Twitter Hack 2020
Scams Scams – Bitcoin Scams
Exchange scams are another type of fraud that is gaining momentum in the market. Trade scams are particularly brutal because they tend to accumulate large numbers of funds before deceiving investors. You should never invest in an exchange that doesn’t have a reputable team or track record. Also, you should be aware that unregulated exchanges pose a greater risk.
A perfect example of a fake trade with millions occurred in 2017. South Korea-based BitKRX has devastated local investors. The company has lured its users with false promises of ridiculous earnings. Whenever an exchange enters the market with ROIs that are not in line with the industry leaders, you need to be patient. Let others find out the hard way if the platform is legitimate. After the exchange has been up and running for at least a year, you can assume it’s legitimate for now.
Fake ICOs
Along the same line of thinking, fake ICOs are a real problem in the market. 2017 saw an explosion in these scam project launches. One report put the total amount of scam ICOs on the market during 2017 up to 80%. Although these numbers are much smaller today, there is still a large amount of fake ICOs declining internationally.
In a fake ICO scam, scammers will use websites with fake ICO details to promote the project to unwitting users. The website usually promises the moon and stars to new users who are desperate for profits. These sites then instruct users to deposit funds into a compromised wallet. Once your Bitcoin is sent, it becomes obvious that you have been duped.
Fake ICOs are a big deal because they happen frequently and cost investors millions. For example, Big Coin stole $ 6 million from customers via one of these disguised campaigns. The platform has led users to invest in the fake cryptocurrency by enhancing its capabilities and technical progression to date. However, once the funds reached the Big Coin wallet, they were promptly redirected to their personal bank accounts.
DeFi mats
Recently, there has been a lot of hype around the DeFi market. These platforms introduce new protocols that allow users to make cryptographic profits without the need to trade their coins. DeFi seeks to reinvent traditional financial systems using a decentralized approach and blockchain technology. The technology is exciting because it allows users to earn profits by doing activities such as lending their encryption to other users.
Unsurprisingly, all this hype has sent sharks around. There has already been a huge amount of rugs in the industry. A knockout is when a company takes your funding by promising services or profits in return, but suddenly disappears before fulfilling its commitments.
To date, there have been numerous attempts at DeFi rugs this year. Amplyfi.money made headlines in the industry after collecting 2,500 ETH from investors and then magically disappeared into thin air. Unfortunately, they’re not alone, Burn Vault Finance ($ BFV) did the same thing. Over 20 high profile DeFi exit scams have been reported this year.
DeFi’s rise to fame creates the perfect scenario for scammers looking to feed on the FOMO created by high profits and new technologies. New investors must remain extremely diligent. Never invest in a DeFi platform until DYOR and you are unsure of the longevity of the project.
Cloud Mining Schemes – Bitcoin Scams
Cloud Mining Scams are one of the oldest but most effective ways to steal Bitcoins from new users. In a classic cloud mining scam, a company asks you to invest your Bitcoin. In return, you receive a share of the platform’s hash power. This hash power should go towards Bitcoin mining with the profits split among all pool members.
However, these funds only pay previous investors. In this way, the platform appears legitimate for a certain period of time. To stimulate greater participation, these platforms will promise incredible returns and deals like lifetime contracts. Once the platform has made enough profits, the website is suddenly not available in your region. One of the most publicized cloud mining scams occurred in 2019.
In this incident, three men were arrested for committing $ 722 million in cryptocurrency fraud via the BitClub network. Court documents revealed that the group solicited money from investors in exchange for cryptocurrency mining pool shares. Even worse, they also rewarded investors for recruiting new investors.
Hardware wallet theft
Hardware wallet scams are one of the saddest to hear about because it means someone was going above and beyond to protect their cryptocurrency when their earnings were stolen. Hardware scams can be available in a couple of different varieties. In one scenario, scammers sell hardware wallets to users with a secret phrase hidden under a scratch card. The wallet instructions ask users to use the seed key for configuration.
Once the wallet is set up, hackers can access it from anywhere globally and drain the funds in seconds. This scam has left more than one Bitcoin investor without their hard earned satoshis. There are also hardware wallet scams where the wallet comes from an unrecognized company. These wallets send your funds to another wallet after deposit.
Hardware Wallet Scam
The best way to avoid this scam is to only buy wallets from reputable suppliers. You should never buy a used hardware wallet or even one from another source like eBay. If you are serious about protecting your cryptocurrency, you probably shouldn’t buy your protections on a used market.
Fake Mining Platforms – Bitcoin Scams
Another scam that seems to be gaining momentum in the industry is that of fake mining rig providers. Whenever Bitcoin’s value rises, these scammers hit the market with new and exciting mining platforms that promise impossible returns. In some cases, they will send you hardware that doesn’t work or has significantly lower performance.
These hacks have expanded their efforts in recent times. There are cases where they have compromised a reputable account on markets like Alibaba and started selling their faulty products. Most users will then look at the seller’s stellar history and assume it’s not possible for a company to risk its reputation for shady Bitcoin trades. However, it was later revealed that the company lost control of its market.
The easiest way to avoid this scam is to buy mining rigs directly from the manufacturer. Furthermore, you should never pay for any products on eBay, Amazon, Alibaba or other online marketplaces with Bitcoin until the platform accepts the cryptocurrency directly.
Big Bitcoin Scams to Avoid for 2020 – Knowing Is Half the Battle
Now that you have a better understanding of the most common Bitcoin scams you’ll find in 2020, you are ready to keep your crypto secure. Never let your guard down and always maintain a strong security protocol. If you do these things, you are sure to see your stacked sats aging in the safety of your wallet.
