Avoid Bitcoin Scams 2023 — How to Spot Them

Cryptocurrency is an incredibly lucrative way to invest, and Bitcoin is at the forefront. If you're a new investor and have observed the success of past Bitcoin investors, you might be experiencing the sinking feeling of, I should've invested earlier.

Now, you’re hyper-aware — you’re sitting on the edge of your seat, waiting for the next profitable opportunity to arise. As you’re in a state of FOMO (fear of missing out), you might be too quick to jump on any chance to get rich quickly.

Unfortunately, con artists out there perform Bitcoin scams and prey on hopeful investors to get rich themselves.

Here at Cryptoholics, we want to help you see clearly as you’re investing in Bitcoin. Explore our guide on Bitcoin scams and how to avoid them to protect yourself as an investor.

What Are Bitcoin Scams?

Bitcoin scams are when money-hungry individuals, groups of people, or companies try to deceive unsuspecting victims into:

  • Sending them crypto
  • Granting them access to their crypto wallets

Bitcoin swindlers operate similarly to other financial scammers. They work hard to gain victims’ trust and offer seemingly amazing deals and lucrative opportunities that ambitious investors can’t pass up. Bitcoin swindlers build a false sense of security and manipulate victims into doing what they want.

bircoin scams

General Advice

A good rule of thumb to follow is this: if someone’s offering you an investment opportunity that seems too good to be true, it probably is.

Most importantly, you should use your intuition in any investment you make. If you have an ill feeling about any aspect of it, avoid it at all costs.

You also shouldn’t be so quick to jump into Bitcoin investments you feel confident in. Do your own research and only buy this crypto asset from reputable exchanges.

Top Bitcoin Scams

Bitcoin scams don’t fit just one mould. Con artists can get creative when it comes to deceiving unsuspecting victims. Explore our Bitcoin scams list to learn what you should avoid:

Top bitcoin scams

Bitcoin Mining Scams

Bitcoin mining scams are some of the oldest ruses in the book, but they are nonetheless effective. Scammers will ask their victims to invest their Bitcoin. In return, the scammer will grant a portion of the company’s hash power (which is what should go towards mining Bitcoin) to the investor. In theory, all pool members will receive part of the profits.

However, the funds end up paying only the earliest investors. In the beginning, the platform seems authentic and encourages more users to participate. As new investors enter, old investors make out with millions of dollars, leaving the new ones in the dust. This is the textbook definition of a Ponzi scheme.

Email Scams with Bitcoin

Bitcoin email scams involve con artists sending blackmail emails to victims. These phishing emails will tout messages like “I will harm your family,” “I will reveal an affair you’re having,” or “I will ruin your professional reputation.” Scammers use these messages, even though they’re often empty threats, as leverage to get victims to send them crypto.

Sextortion Scams

A sextortion scam is a type of manipulation and blackmail. A con artist will send a victim an email, claiming that they possess a video of the victim performing intimate, sexual acts in private. In most cases, the con artist doesn’t even have the footage — the threat alone is often enough to get a victim’s attention.

These con artists demand their victims pay them in crypto and promise not to release the “footage” to the public. 

Social Media Scams

It’s easy to trust your favourite influencers — they’re witty, attractive, and all-around charming. Why wouldn’t you take their financial advice if you’re looking to make a quick buck?

The social media realm is the exact wrong place to visit if you’re looking for tips on how to invest in crypto. Many greedy celebrities exist to capitalise off their followers, and, sometimes, social media platforms aren’t secure from outside influence.

Learn about the most common social media Bitcoin scams below:

Twitter Bitcoin Scams

Twitter crypto scams are relentless. Individuals will create fake accounts to ask Twitter users for Bitcoin. The more technically-inclined swindlers will use their expertise to hack already-existing, popular Twitter accounts.

The most infamous example of this occurred back in July 2020. A 17-year-old hacker and several accomplices hacked Twitter’s network and took over dozens of Twitter accounts for several hours. The hacker tweeted from the accounts of highly revered individuals in the finance world, including Elon Musk and Jeff Bezos. The hacker even managed to appeal to a larger audience by taking control of other accounts, like those of Kim Kardashian West, Barack Obama, and Floyd Mayweather.

The hacker managed to solicit more than $100,000 before Twitter managed to intervene. Twitter users were eager to do anything the people they looked up to most asked of them.

twitter scams

Bitcoin Instagram Scams

Bitcoin Instagram scams are very similar to Twitter hustles. A swindler will create an account and post seemingly helpful crypto advice. They’ll gain thousands of followers through a “follow-for-follow” system or purchase followers and blatantly disobey Instagram’s policies.

With a high-profile Instagram account under their belt, a scammer will then start to “hype” up the crypto asset. They promise that it’ll soar thousands of dollars over a short period and encourage their followers to buy it. Then, as the price surges, the scammer will sell off all their holdings — this practice is known as the classic “pump and dump” scheme.

Alternatively, some Instagram scammers will pose as crypto experts. They’ll boast about their past “success” and promise unknowing investors that they can produce the same returns, as long as they send them Bitcoin first. Then, the con artist will run off with the investor’s money, never to be seen again.

Bitcoin ATM Scams

Bitcoin ATMs let users conveniently buy and sell the asset in person. However, they are also opportunities for con artists to make a move.

These shams go something like this: A scammer will call or email a victim and coerce them to deposit cash at a crypto ATM. Feeling threatened, the victim will deposit the cash and scan a QR code address provided by the scammer. This process sends the Bitcoin directly to the scammer. By the time the victim contacts the ATM operator or the local police, there isn’t much anyone can do to punish the con artist.

Bitcoin atm scams

Bitcoin Investment Scams

Bitcoin investment scams involve con artists promising to “invest” your Bitcoin and yield a specific return over a certain period. You should avoid promises like these at all costs, as no one knows how this cryptocurrency (or any other asset) will perform over time.

Local Bitcoin Scams

Are you stressed about Internet scams asking for Bitcoin? Unfortunately, these fraudulent cases might not be your only cause for concern.

A shady “financial advisor” in your area may use social engineering to build your trust and convince you to provide him with your personal information (like your wallet password or exchange log-in information).

Key Takeaways

  • Bitcoin trading scams are rampant, and they take many shapes.
  • Don’t follow the financial advice of any public figure, even if it’s one you look up to.
  • New investors are especially susceptible to the deception social media platforms foster.
  • Crypto scams can occur online or in person.

Reporting a Bitcoin Scam

If you’ve fallen victim to a Bitcoin scam, we understand your frustration. You likely want the con artist to pay for their crimes and prevent other investors from going through the same unfortunate experience.

If you live in Europe, the best course of action is to visit this link and find the cybercrime reporting website for your specific country.

You can also report something you suspect is a Bitcoin scam. Your proactivity can protect investors from prey to relentless con artists down the line.

Safest Crypto Exchanges to Buy Bitcoin

Your best bet for buying and selling this crypto asset is to use a reputable crypto exchange. Trustworthy crypto exchanges:

  • Are well-established
  • Have gained a large, loyal user base
  • Are regulated by authoritative bodies in their respective countries

Our top picks for the safest crypto exchanges to use are:

Bitcoin Scams — Summary

Even if an investment seems legitimate on the surface, you shouldn’t be so quick to flood it. Con artists are out to capitalise on any unsure or inexperienced investor looking to get into crypto.

As long as you follow our guidelines and use a safe crypto exchange like one of the ones we listed above, you should have an unadulterated buying and selling experience.

Bitcoin scams FAQ

Bitcoin Scams FAQ

Is Bitcoin legit and safe?

This crypto asset is legitimate and safe. It’s a decentralized cryptocurrency popular among small- and large-scale investors alike. Publicly traded companies like Tesla and Microstrategy have invested billions of dollars into the asset, so it’s safe to say that this crypto asset isn’t going away anytime soon.

How can you tell a Bitcoin scammer?

Crypto scammers are often good at what they do, making them difficult to spot. You may not be aware of fraudulent activity until it’s too late to do anything about it.

However, you can keep an eye out for these red flags to protect yourself as an investor:

– An exchange asks for the password to your cryptocurrency wallet
– A supposed “crypto expert” on social media is persistent about helping you profit
– A giveaway account asks you to send money first to “cover transaction fees”

How do I avoid Bitcoin scams?

You can avoid a Bitcoin scam by following these tips:

Engage with social media accounts sparingly: Popular social media accounts of legitimate Bitcoin brokers are often victims of impressive impersonations. Protect yourself by taking what Elon Musk and other influencers post with a grain of salt.
Don’t engage in Internet financial transactions: Never buy or sell Bitcoin via direct message on social media platforms.
Don’t be click-happy: Don’t click on URLs connected to social media profiles posting Bitcoin offers that are too good to be true.
Don’t accept financial help online: Don’t believe anyone who persistently promises to help you mine a crypto asset (or even give it to you for free).

How do you know if a Bitcoin is real?

One of the biggest indicators of a fake Bitcoin is if you find it listed “for sale.” Swindlers will often advertise something like “Bitcoin for sale, grab yours for 10% off!” on any platform possible.

Then, they’ll lead you to a fake exchange and convince you to buy however much you can afford. 
When you “buy Bitcoin” on a fake website like this, your money will go directly into the scammers’ pockets, and you’ll likely never see it again.

Can I get back my Bitcoins from a scam?

All cryptocurrencies are deregulated and offer a degree of anonymity. As a result, you might find it very difficult to get your coins back from a scam.

Most cryptocurrency exchanges offer irreversible transactions. This means that if you send a crypto asset to a scammer’s address, you cannot cancel the transaction or request your money back.

Some services exist to help scammed investors get their Bitcoins back. However, you must utilise these services with caution, as many of them are also scams.

Alternatively, you can report the con artist or company, hire a private investigator, or seek legal counsel. Note that while these methods may help some individuals, there isn’t a guaranteed way to get your lost coins back.

Where to report email Bitcoin scams?

The best way to report email scams (if you live in the U.S.) is to file a complaint with the Federal Trade Commission. You can fill out a form here.

European investors can visit Europol’s site to find the appropriate reporting body.

Can a Bitcoin crash?

No matter if you’re heavily invested in this crypto asset or only have a couple of dollars’ worth, you might be wondering, Can it crash?

All types of investing are volatile, and cryptocurrency is no exception. Bitcoin has crashed in the past due to many factors, including:

– New regulations in different countries
– Fear, uncertainty, and doubt (FUD) from investors
– Lower demand
– Interest in other cryptocurrencies

It’s no secret that Bitcoin’s price is erratic, but it’s also resilient. It has bounced back countless times and is the world’s leading cryptocurrency. As long as you’re investing goals are long-term, you shouldn’t worry about occasional price crashes.

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