Bitcoin Forum

Updated on: August 07, 2020.

Table of contents

Introduction

Different types of crypto scam
1. ICO, initial coin offering scam
2. Ghost Exchanges and wallets
3. Fake exchanges and wallets
4. Unregulated exchanges
5. Trading bitcoin or strong altcoins for shitcoins
6. Ponzi scheme
7. Airdrop scam
8. Phishing
    i.   Email phishing attack
    ii.  Phishing by impersonation
    iii. Phishing by dust attack
9. P&D scam
10. Fake mining sites
11. Social media and dating site scams
12. Malware scam
13. Bitcoin recovery service scam

Scam prevention
1. Using reputable wallets and exchanges
2. Setting up 2 factor authentication and other additional layers of protection
3. Check the Link URL and shortened links
4. Download from the true and official source
5. Be careful of ICOs, shitcoins, HYIP ponzi scheme and fake airdrops
6. Avoiding too real to be true offers[
7. Avoid sharing personal information
8. Careful with cloudmining and other mining scam



Introduction
Scam, a fraudulent business scheme is now very common all around the world. And, today, scam as increase in digital world. Now, with the avent of bitcoin and other cryptocurrencies, scammers have also deployed tactics used to strip crypto users of their cryptocurrencies, especially bitcoin.

Bitcoin has been the main target of scammers because it is the most valuable cryptocurrency with very expensive price. Although, they also target well established altcoins like ethereum and litecoin. There are many ways now that scammers do there malicious activities and I will talk about them one after the other.

The different types of scams
There are many ways attackers strip away cryptocurrencies  from their cjctims and thes are some commone means. Scammers are having more tactics daily and more can be added later.

1. ICO, initial coin offering scam
Thesd are new projects in which investors are allowed to support with their investment capitals. But, nowadays, many turned to be failed projects, some also are intentionally scam projects in which scammers will offer new projects and used malicious ways to scam investor. From 2017 to this year, over 70% ICOs are scam projects in which investors lose investment capitals.

2. Ghost Exchanges and wallets
Some exchanges and wallets can mimic the appearance of a true and legit exchanges. They do this by have a link similar to the exchange or have a fake application that someone to be a victim can download. Once payment is made into the exchange or wallet, the person's money is gone.

3. Fake exchanges and wallets
These are exchanges and wallets that fake, they are not mimicking the appearance of a particular exchange or wallet but will create an app or website link that users can use to access. This type of scam is very real. Someone should be careful of the exchanges or wallet he is using. Using a well known wallet and exchage is best against this type of scam.

4. Unregulated exchanges
There are some exchanges that decoy users to low prices cryptocurrencies  and quick return. Like the one that I was tricked into. It was a form of investment, 10% return in a day. But, the coin is a shit coin and devalued from 50 satoshi to less than 0.001 satoshi. This resulted to loss for me. This kind of offers are common on unregulated or not well regulated exchanges.

5. Trading bitcoin or strong altcoins for shitcoins
There are some coins that are called shit coins, today they may worth 500 satoshi. But, in later weeks or months, their worth could dropped down to 1 satoshi. I have fall victim of this before as I said in number 4 above.

6. Ponzi scheme/HYIP
All ponzi scheme are scam, this is now common way to scam, the earlier investors including the ponzi scheme owner will gain but the late investors will lose. Fomo and late investors are the ones that lose. Just like a pyramid. The owner and early investors are not many and gain from the fomo people and late investors that are very many before the scheme will crash.
High yield investment program are also scam. Ponzi scheme can fall under this section too but there are many other high yield investment programs. Scammers are trickery and they can use this way to scam too.

7. Airdrop scam
Some people wonder how free airdrop can be a scam. There are many fake airdrops, and why don't you think what is the benefit of those launching fake airdrops because you don't invest and have nothing to lose. Don't forget that you will have to complete some tasks before collecting the fake cryptocurrency. These are tacrics used by scammers to reveal some identities about you after verification. Also, the airdrop links can contain malware that be installed on your device and be used to steal bitcoin or altcoins from you.

8. Phishing
There are many types of phishing attacks. Phishing can be through contacting you through email, personal messages, or calls.

Email phishing attack
Scammers can send you fake emails claiming they are officials from the company of the wallet or exchanges you are using and ask you to follow certain process in which you will fill a form. With this, if you provide them with your private key using the link, then, consider your money gone. They also get close to you first to create trust and later ask you to provide them some informations about you. They will use the information against you to steal from your crypto wallet.

Phishing by impersonation
Also there are many other ways scammers use for phishing attack, another one is phishing through impersonation. They gather vital information about you and later contact you and use tricks to gather sensitive informations from you.

Phishing by dust attack
Process of phishing can start by dust attack. Dust attack is when scammers send very minute bitcoin to someone. They send this to link many address to your wallet and know about your transactions. If they see large transactions through your wallet, then, they will proceed to phiching attack in order to scam you. They can also look for means to install malware on your device to steal bitcoin from tour wallet.

9. P&D scam
It it called pump and dump, as the name implies, the scammers will start a project, pump it with their investment capitals so that the price will increase. Investors will invest because they are seeing the peice rising and not knowing it is a scam tactic. Investors invest and the price will rise further. So, the scammers will take their large share of investment capital and withdraw it which is called dump. So, the value of the coin will greatly fall. Therefore, investors will lose.

10. Fake mining sites
There are some sites that offer to use your devices to mine for you and given you cryptocurrencies. There are some links provided by the mining sites that can contain malware. This will be installed on your device and you will not know. So, if you what to send bitcoin to someone, this malware can change the address. Aside, also be careful of the ads and links you click.
Another is clould mining, most cloudmining these days are not profitable as new coins are shit coins and as old coins are halving and resuckng the mining reward. Also lastly, as mining difficulties are increasing. So, scammers, see it as a way to scam. They offer profitable offers that can not be real and some people fall for this scam.
There are still mining in which you will be asked to upgrade. After you pay, your money can be completely gone. There are very more ways scammers use in mining scams.


11. Social media and dating sites
Dating sites and social media are means some scammers meet someone to scam. They can be contacting you daily, showing care and also be your friend. Later, they will offer you scam offers. You would have trusted them and send  bitcoin or other cryptocurrencies  to them. Also, be aware of links clicked on social media, it can also installed malware on your computer or phone.

12.  Malware scam
I have explained little about malware above, we browse a lot daily and we click on ads and links. Do you know these ads and links can contain malware? Even, emails from ghost and fake exchanges above can contain malware. This can be used by hackers to change wallet addresses to scamer address while you are performing transactions. There are trojans that are claimed to steal google factor authenticator. To avoid this, download only official apps rather than any third party app download also be careful of the sites you visit. More about this is discussed below on how to prevent scam.

13. Bitcoin recovery service scam
There are sites that claim to recover back bitcoin stolen from wallets or which victim sent intentionally to scammers. Normally, bitcoin transaction with 1 confirmation cannot be reversed again, and the bitcoin is completely gone for ever. If recovery sites request the victim to pay certain amount of bitcoin to recover the bitcoin for him, it is just a scam and should be avoided. The best is to contact your wallet customer care and not any recovery service.




Scam prevention

I want you to know that even using the safest exchanges and wallets does not mean you can not still be scammed, so, you need to be careful a lot. Using hardware wallet and paper wallet can help you to avoid some of these scams but also protecting your devices against malwares is important. Treating your computer like human and be consious of any malicious activities. Check the address you want to send bitcoin or other cryptocurrencies  to before sending. These are some of the ways you can avoid scams listed below.

1. Using reputable wallets and exchanges
Use a reputed wallets and exchanges will also help you. Some wallets and exchanges are fake or ghost some are not regulated or not well regulated and can result to scam. Read about thebscam exchanges above that are well explained. In addition, hardware wallets  can be a lot useful. It is one of safest means to store bitcoin and other altcoins but you still have to protect it again scammers.

2. Setting up 2 factor authentication and other additional layers of protection
Most wallets have additional layer of protection that users can use to additional protection their wallets.Example of 2 factor authenticators such as google authenticator, sim authentication, universal 2nd factor and one time passwords can help protect your cryptocurrencies from scammers.
Also, use of passphrase on trezor and eight digit pin on larger nano are also excellent of additional protection

3. Check the Link URL and shortened links
One thing I like to check before clicking on links/URL is to check for the s on https. For example check all links I pasted below. You will see that they are all https://. Some links can be http//: in which there is not 's' in front of http which are not seure and safe links or URL. The s stands for securuity.

Also be careful of shortened links, scammers use this way to easily scam by putting malware on the links. This kind of links has been well explained above. Used in airdrops, social media and fake mining sites.

4. Download from the true and official source
Do you know that I have heard cases of ake and ghost wallet and exchange apps on app stores. The best to do is to visit the wallet or exchange official site to download their apps. This is the best way you can be sure an app is not a ghost one.


5. Be careful of ICOs, shitcoins, HYIP ponzi scheme and fake airdrops
Shitcoins most of the time can take from you and maybe not give you anything in return than losses as I explained about this shit coins above. Be careful of fake airdrops and also high yield investment programs or other ponzi schemes.
Be aware of ICO they turned out to be 70 failed and scam. You can check their white paper, copy it and paste it onx google. If you see it kn another site, that means, the project is a scam one. But, also, know that a project can be legit but failed. So be careful.

6. Avoiding too real to be true offers
There are some offers that are very attractive, before you accept any offer, be patient and make thorough investigation about it. Like I said above that cloud mining are now mostly scam but there are still legit ones but not really profitable. If you make your research about cloud mining then you will noticed this and use it to judge if an offer is a scam or not.

Any offer you looked for online and you do not see find about it do not accept it, it is a scam.
Smammers are very wise, they know that  people too can research about known offers like cloud mining. They can offer you what does not exist at all. They will tell you it is new that most people don't know about the business yet. Saying it is the reason for the much profit -It is a scam.

7. Avoid sharing personal information.
I have talked about phishing attack above and this is usually successful by victims carelessness. Someone has to be careful and never share information through links in email, social media, message or call.


 
8. Careful with cloudmining and other mining scam
I talked about this because it is becoming comon. Mining is getting less profitable day by day as strong cryptocurrencies  like bitcoin are halving. But scammers can bring you a web mining offers, using your phone or computer to mine. But having good knowledge about how mining is not that profitable again like before will help you.
Most cloudmining these days are not profitable as new coins are shit coins and as old coins are halving and reducing the mining reward and as mining difficulties are increasing. So, scammers, see it as a way to scam. They offer profitable offers that are not real but profitable and some people fall for this scam.


Conclusion
Most scams that are successful are due to victims carelessness. Some lack information and some are not handling their wallets properly. And lastly, the best way to stay away from not being scammed is to handle crypto activities with great care, knowledge and experiences.



https://en.m.wikipedia.org/wiki/Initial_coin_offering
https://www.thestreet.com/.amp/investing/bitcoin-scams-14640202
https://heimdalsecurity.com/blog/cryptocurrency-fraud-scams/amp/
https://swissborg.com/blog/how-to-identify-scams-and-how-to-protect-yourself

You should used an open source authenticator app such as andOTP, Aegis, or Tofu, and not some closed source spyware from Google. Also, SIM or SMS authentication is notoriously easily to hack via SIM jacking and should be avoided.

A passphrase and PIN are not the same thing. Both Trezor and Ledger devices use both. A PIN simply protects the individual hardware device, and stops an attacker who gets their hands on your device from unlocking it. A passphrase is used in addition to your seed phrase to calculate your private keys, and therefore slows down or prevents your coins from being stolen should someone access your seed phrase. Everyone using a hardware wallet should use both a PIN and a password.

It's also worth noting that Trezor devices have a critical vulnerability in them, allowing an attacker with physical access to extract your seed phrase, and should not be recommended based on this.

You should install the browser extension HTTPS Everywhere, but be aware that using https sites doesn't make you immune from scammers.

In addition, you should verify your download's signature(s) prior to installing it.

This is so informative and helpful.

Now I know more about using open source authenticator. Even, recently, a Trojan was revealed to reveal google factor authenticatoion codes to hackers.

The pin and the passphrase are helpful in protecting cryptocurrencies  but you make it clear that  they are different. This is so informative too.

You can also add Fake giveaway crypto scams - in which cyber criminals impersonates celebrities in the crypto sphere, notably, Elon Musk or Vitalik Buterin.  And their modus is that they pretend that this personalities are giving out free cryptos, but the catch is that you have to deposit first in order to get the supposedly giveways. And usually they uses medium, youtube and twitter as their main social media to target unsuspecting victims.

Does the fake admin or moderator scam fall in any of these categories were users are asked to send credentials of their account via pm and later to find everything has been swept out.

There was one that happened to me when I was looking for ways to get free bitcoin online, I joined pay per click, and I was referred to a site, the site mine 0.4 btc in just 3 minutes. I muted and watching the whole things before the 3 minutes was completed. It minded 0.4 btc asking me to pay 0.004 btc for me to receive the 0.4 btc. I did not have bitcoin at the time, maybe I would have been scammed. I later know it is a scam tactic.




Have any admin or moderator demanded any credential of your account before? Or did you know anybody this as happened to before?
Provide solid information about this.
 
That beside. Just know that there is no way hackers can not get to someone. People only need common sense to protect their wallet. Giving any access codes of your wallet to someone is a very big mistake.

This is a pretty comprehensive list, thanks for sharing!


I can't recommend this part enough. Hardware wallets can help prevent many of the scams listed in this article. No matter which hardware wallet you choose it will be safer than a web wallet (as long as you keep the recovery seed safe somewhere).

I think you can add to #5 about trading signals.

They're known to easily get newbies attention by simply telling what to buy so that they can pump a certain coin. And once they are successful with that, they'll just leave their people and got the sales because they are selling "signals" for a certain fee.

You are right, this is even common on social media as well. They sell signals. This does not mean the signal is right. At times, it can be right but most times, it is wrong. The best is to analyze and predict yourself than believe on trading signals. Nice one.

To me, trading signals are scam as you said because newbies do fall for such and lose.

I think you have missed the IEO because it is also a scam.

You have made a mistake here, but never mind good post, OP

@OP, you forgot to have #6 in bold. For better presentation, you can use bbcodes like this:

• Email phishing attack
• Phishing by impersonation
• Phishing by dust attack

(If you want to copy the format I suggested, quote this comment first)

Maybe you can add related topics below your post like the Phishing Revisited (https://bitcointalk.org/index.php?topic=5164359) by @Baofeng

---

Can you point out how and why it's a mistake? It's going to help expand this topic.

Your guide on how to prevent bring victimized by scam projects and shitcoins is to vague to be even called a guide for avoiding them. You haven't pointed out how to identify red flags or even where to look at them in the first place so people would literally be left clueless on what they are trying to avoid. If you are trying to avoid scam projects and shitcoins you always need to do some research from their whitepaper's authenticity and their team''s legitimacy other than that you cam also check at their website if they are hosted by a cheap hosting service or their ip addresses are connected to several other scams.

this is wrong based on my observations. more than 95% of ICOs are scam and the other 5% are poor projects with no future at all. ICO by nature is a fund raising and since it is easy and practically free without any supervision it ends up being purely scam.

not being regulated doesn't make the exchange scam. for example the real decentralized exchanges will never be regulated and they are far from being scam.

I will add a little bit to Scam/phishing prevention or protection.
1. Bookmarked important website to your browser
2. Install Ad blockers like uBlock Origin
3. Install phishing protection like Suspicious Site Reporter/MetaCert: Internet Security (these are browser extensions)

Searching is google is not safe anymore, they will give us some fake ads so number 2. is very important. In google play store also they allow some fake apps to be uploaded on their platform so better check the official site for the official android app.

If you do not recommend that the number of scams is increasing in crypto now a hardware wallet is best to avoid scams. Hardware wallets are all good its personal key is never hacked. It has the ability to protect hackers from being kept securely in the hardware wallet.

It's not that Google allows, they can't keep up with tens to hundred thousands of those apps being released. There are those developers which insert malware through their built-in update components so Play Store might not be able to detect until the next scan.

Well wrote OP. Although all points has been discussed on forum but nothing wrong to remind again and again. Because as a human we forget some important things always. Crypto become a great opportunity for scammer to scam anonymously. So we need improve ourselves to prevent scammers. When we will know some basic things about crypto and earning then we may reduce more scammers. I believe ICO scams already reduced more than before. I think more than 97 percent is scam or unsuccessfull. Very rarely 3% raised their hard cap and listed some good exchange. But fortunately that projects also losing value after few days although we won't call them scammers. However, prevent is better than cure, so let's hope at least prevent scammers from forum.

You still have to be careful when using hardware wallets, because as we all know there is a lot phishing websites that pretend to be official ones. And if you give them your seed phrase in order, for example, to "update" your hardware, you will certainly lose everything. Also, hardware wallets have low resistance to physical attacks, when hacker managed to access your wallet not through digital world, but real one. Additionaly, he is able to scam you using well-known "5$ wrench attack", so it is better to never tell anyone that you possess any hardware wallet and even bitcoin.

This is true, but the issue here is that many people trust Google unequivocally, and assume if it is on the Play Store or available as a Chrome extension then it has somehow been vetted and approved, when in reality it has been no such thing, and could contain any amount of malware.

None of these things are a flaw in hardware wallets. If you type your seed in to a random website, then you are going to lose your coins regardless of what wallet you are using. Good hardware wallets such as Ledger devices have some of the highest resistance to physical attacks of any wallet. Hardware wallets are also great to use with a couple of different passphrases, which provides the best possible protection against a $5 wrench attack.

A quality report on scams been paraded on the crypto ecosystem. it is quite clear that some users here has no intention to make the platform a valuable place rather for their own intention. the post made here is for users that are interested in learning how the cryptocurrency platform works. people should avoid gambling sites that involves crypto. it is the new scam in crypto.

It isn't actually matter of wallet. That is just an example. The main thing is if you're using a secure, reliable system such as hardware wallet or any other decent wallet in an unsecure way, you will lose everything. Hardware wallet is not panacea, it still require proper using.

While I agree with you that passphrase+seed phrase combination strengthens security in case of hacker's attack, I can't agree this method is able to protect from any wrench attacks. I have a hunch, the size of the wrench will be a more important factor than the size of the secret password.

Absolutely, but the same can be said of any wallet or any security set up. This is no way to store your bitcoin which is entirely immune to user error or stupidity.

It is more or less the only method that can offer at least some protection from a $5 wrench attack. Any wallet protected by login details, a password, PIN, finger print, etc., any seed which has been hidden or split in to multiple parts, any seed which has been encrypted, and so on, all have a single piece of information required to access them - the password, the location, the encryption key, etc. Only by using a passphrase (and keeping the addresses behind it secret) can you have any form of plausible deniability. An attacker who finds your wallet can $5 wrench you until you reveal the password/PIN, but has no way of knowing that you have more coins hidden behind an additional passphrase.

Irrespective of the where the scammers are from, if you have a clear knowledge about scam, you will not be scammed. Follow the rules above and do not trust anybody but you alone.

Here i nowadays phishing emails are becoming more dangerous and need to wake up for all of us. Always be careful and do not open unknown mail to avoid any inconvenience.

There are still many ways to scam but all are included here on this thread, nice one. The very one I was scammed with was when I bought a shit coin that made me lose 90% of the initial capital. This type of shit coins are common on exchanges that are not well regulated.

Offers can be deceiving, it's the type of scam that take advantage of a person's greed. It lure people with offers that seems impossible like earning huge money without so much effort. So if you tend to believe on easy money, then there's a chance that you will get tricked by it. Thus, people should do further research to check if it's a real special offer and confirm that it's not a fraud. People are obliged to research for their own sake to be alert of scam because scammers used different methods to attract attention.

Gone are the days when people get scammed easily. Nowadays, people are now wise in investing in any given project. In as much you don't have greed within you, to invest more than what you bargained for, even though you get scammed finally, you won't get hurting that much

Used to buy many shitcoins from scam ICOs back in past. Never returned me a penny :<

This has been a scam, truly another type of scam I have to include to the list. If a person for being novice is scammed and scammed again through these recovery services, it will not make any sense and it is considered double losses.
 

I often see point number 9. projects with a good coin value are very tempting, especially for beginners to invest. need knowledge to be able to distinguish which projects are P&D and actual projects.

Scamming is everywhere, people fall into victim's of scamming due to lack of information and over consciousness in order to get what they want,
We need to be careful because know one knows who is actually a scammer.
Scamming has caused lack of trust in different societies,
We have to know the possible way to eradicate scamming in the societies because people are giving up their life because of shocks based on scamming.

Lack of information or idea are also the main reason they fall into this scam activities. But the real reason why they get scammed is their greed that, even they know it is too good to be true and they still fall for it. It is why we should learn how to control ourselves without being aggressive when it comes to earning money because there is no such thing is easy money that we should work hard just to earn money.

This is a good introduction to the newbies because right now still there are some people who are getting victims with these untrusted platforms and one of the best things is to enlighten them what are the definitions and what are the possible attempts do by the scammers also one of the misconceptions. This kind of information is very informative it gives an additional knowledge to the lower ranks instead to the higher ranks sometimes we think we already know a lot of things but this is just a piece of wrong information also we want to have a piece of good knowledge still some of the mistakes is coming from getting greedy of the person to make more additional earning, in my opinion, this is not bad to become greedy but the bad side is you will risk a more higher chance of earning and losing.

We can experience different scams so this is not limited right here also it's better to add some information that came from the different members it's good to make a compilation right here.


Even we are trying to aware those people if their ego wants to make more earning we cannot stop them to do those things still we don't need to regret if they got scam because at the end of the day we gave that knowledge and information do they need to prevent losing their funds but still keep spreading the scam platforms.

Not just those although they're mostly the main reasons people get scammed. We also have other reason like, lack of determination or focus on their goals. The industry is full of distractions, and if you're not focused you might end up lossing all your invested capital talk less of gaining anything. There's only one project worth giving all your attention 100% and that's bitcoin. Not saying other projects can't give you profits but you shouldn't go chasing after them to make easy money as it'll most likely end up badly.

Informative can be easily access this days and you been on the forum is an extra advantage as if you keep your foot down you'll likely get all you need here, from advice to warning on likely scams to avoid.

Integrating anti scam will help reduce scammers from the whole environment.