Last updated on August 15, 2021
Cryptocurrency Scams 01
Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade. This is ONLY for understanding and education purposes. The content in this article is referred from https://www.finder.com.au and https://bitcoin.org/en/scams
Want to learn what is cryptocurrency? Go to page
What is a cryptocurrency scam?
Cryptocurrencies are complicated, very confusing to new users and lightly regulated all of which makes them an ideal target for scammers but with a little bit of know-how and some good old-fashioned common sense, you can do plenty to protect yourself against cryptocurrency scams.
In this article we hope to talk about below main topics:
How cryptocurrency scams look like? Go to section
Checklist: How to detect a crypto scam Go to section
16 common crypto scams to keep an eye out for Go to pageThis article is coming soon
How cryptocurrency scams look like?
Scams – Bitcoin Revolution, Bitcoin Evolution and Aussie System
“Bitcoin Revolution,” “Bitcoin Evolution” and “Aussie System” are three common cryptocurrency scams circulating in 2019 and 2020.
All are functionally the same scam, periodically being re-used under a new name and promising similar results. They generally claim to be some kind of investment opportunity, and use made-up celebrity endorsements to spread on social media. Recently, these scams have been pretending to be cryptocurrency trading bots.
These posts are often spread through a combination of paid advertising, bots and compromised accounts.
This is an example of what the scam posts look like:
People who follow the link in these social media posts will usually arrive at a website that’s been dressed up to imitate a legitimate news outlet, with a made-up story about the scam product and fake testimonials.
Victims who sign up for these kinds of scams are generally led to make some kind of payment into an account, which then creates the illusion of profits. In the past, Bitcoin Revolution has simply used a random number generator to create this illusion.
The scam generally continues until the victim decides to try to withdraw these apparent profits, only to discover that none of it is real.
Sometimes they will be put in touch with an “agent” who will tell them they have to make additional payments before they can withdraw their funds.
Cryptocurrency trading bots are a real thing, but they do not risk-free money machines as these kinds of scams suggest. Similarly, there are safe ways to buy and sell Bitcoin, but it’s not a risk-free money machine either.
Checklist: How to detect a crypto scam
Unsure whether a particular crypto website is a scam or not? Use this checklist to help sort legitimate providers from those platforms you’re better off avoiding altogether.
- Does the website connect securely over https (not http)? If the address starts with “http” instead of “https”, the data you send to the website is not secure.
- Can you see the word “Secure” or an image of a padlock in your web browser’s address bar? This indicates that a website is secure.
- Does the website’s URL have any noticeable spelling mistakes or errors? If so, it could be a fake.
- Does the site feature bad grammar, awkward phrasing or spelling mistakes? If it does, this doesn’t necessarily indicate a scam, but it does mean you should proceed with caution.
- Does the website promise abnormally high returns? (For example, does it claim you’ll be able to double your investment?) This should raise a big red flag and is a common indicator of a scam.
- Is there an “About us” page? Does it show the real people behind the company? Does it provide any details about where the company is registered? If there’s little or no information about who the company is and what it does, you could be dealing with a scam.
- Do legitimate, reputable websites link to this site? This could indicate that the site is trusted and respected.
- What do other users say about the website? Are there any negative reviews and if so, what do they say? The crypto community is usually pretty quick to spread the word about scams.
- Who is the registered owner of a domain or website? Is the owner hidden behind private registration? Has the domain been registered for less than six months? (You can find this information by searching for the platform’s URL registration details on a site like WHOis.net). The more you can find about people/company behind a website, the better.
- Is there anything else about the website that raises red flags or just seems too good to be true? If there’s something that just doesn’t seem right, trust your gut.
- Does the website claim any celebrity endorsements? Many investment scams use fake celebrity endorsements to get people to lower their guard.
- Did you first hear about it on social media, or did they approach you first? Social media and unsolicited messages are common ways for scammers to reach new victims.
Please note that this checklist is far from foolproof, as it’s possible for a website to pass several of the above tests with flying colours and still be a scam. The important thing to remember is to do your due diligence before providing any personal or financial information to any website or app.