Bitcoin Forum

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Online Scams has been around since the world wide web started, and a few years ago it looks like scammers has found another industry to make money off– the cryptocurrency space. The cryptocurrency space is infested with scams due to it’s pseudo anonymous nature, allowing scammers to get away with huge heists with little to no trace.

The best way to not get affected by these scams is simply to educate yourself and be extremely cautious in everything you click online. Here are some of the common scams that are being used in the cryptocurrency space.


Phishing sites

Phishing sites are scams sites that are masquerading as certain legitimate websites like social media sites, online banking sites, exchange sites, wallet sites, etc. Most of these phishing sites even looks exactly like the website they’re pretending to be.

So how do they work? Phishing sites mostly appear on Google or other search engine’s ads. You do a Google search on “Binance“, and so if you don’t use an Google ad blocker, then Google the top result would be an advertisement.

https://i.imgur.com/XcAzF1U.png

It clearly says “www.binance.com” on the advertised link, but when you actually click the link and look at your browser’s address bar, there’s a good chance that it’s going to say something like “binanceus.com“, binancesite.co“, something along those lines that isn’t the legitimate “binance.com“.

Some scammers are even smart, as they use domains like “biṇaṇce.com“.

https://i.imgur.com/dl95uJ8.png

You might haven’t noticed, but it’s actually an “ṇ“, a latin character(an “n” with a dot below it). Always keep your eyes peeled. Take note that this doesn’t only occur on exchanges. These scams exist for Facebook, Coinbase, MyEtherWallet, etc. Also, these scams doesn’t only exist on search engine ads. They could also be spread in the form of emails; scammers may email you something along the lines of: “Your account has been locked due to suspicious activity. Click on the link below to unlock your account“; and the link they’ve listed would actually be a phishing link.


Tips to not get phished:
[1] always do a double or triple check on your browser’s address bar and confirm if you’re actually on the legitimate website
[2] install an ad blocker on your browser
[3] make sure the site you’re navigating to has a green “secure” tag on the address bar. Though a secure tag doesn’t automatically mean the website is legit.


Twitter Giveaway Scams

This should be a very obvious scam, but we’d just included this anyway due to people still falling for this scam for some reason.

This type of scam is pretty straightforward. The scammer would make a fake a Twitter account masquerading as a famous cryptocurrency or any technological personality, then the scammer would then reply on the legitimate person’s tweet, saying something along the lines of:

https://i.imgur.com/gRdUxYN.png

Don’t be delusional. No one would give out good amounts of money to strangers online.


Investment scams/Ponzi schemes

Investment scams has existed pretty much since forever. They ask you to deposit a certain amount of money(or crypto, in this case), and promise a amount in return every week, month, or year. Today, most of these scams mostly pretend to be “trading bots“, “cloud mining” sites, “bitcoin investment” sites, etc.

Yes, some people do make money off these sites, by using the site’s referral program. If you invite another person into the program and get the person to deposit money, you get a small percentage off the deposit. These scam sites mostly use referral programs to get people to spread these scams online for them; sometimes even to the point of YouTubers spreading them, causing a huge number of people to fall for these scams.

If you wanted to invest in the cryptocurrency market, buy the coins/tokens using reputable exchanges and hold them on your own secure wallet.

Some famous ponzi scams in the past:
[1] BitConnect
[2] DavorCoin
[3] HashOcean


Pump and Dumps
Pump and Dumps are pretty easy to spot, as pump and dump group leaders usually advertise them as “pump groups“, "free trading signals" or something along those lines. The scheme is pretty straightforward: The leader asks his/her members to buy a certain coin/token that is quite low in marketcap to make the price far easier to manipulate, claiming that it will raise or “pump” in price. Well the thing is, before the leader actually announces the coin/token, the leader already loaded up his/her bags with that certain coin/token, so he/she can sell them in a significantly higher price. Earning the leader significant amounts of profit.
How do you not fall into these schemes? Easy. Simply don’t join these groups.


Scam ICOs

Initial Coin Offerings or ICOs is quite similar to crowdfunding whereas the company/team accepts BTC/ETH from the people in exchange for a certain amount of their coins/tokens, depending on how much you sent them.

ICOs aren’t really scams as some are definitely legitimate, but a good percentage of ICOs are indeed scams. The thing is, some well-made ICO scams are quite hard to detect as a scammer could create a legitimate well-thought project and simply just not deliver and run away with the money. Though there are some scam ICO characteristics that could be enough proof for you to stay away from certain ICOs.

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More will be added to the list in the future.

Disclaimer: CryptoSec.info (https://cryptosec.info/) is a website made to help beginners in the cryptocurrency-space by giving them sufficient knowledge on protecting their crypto investments, and learn about the risks they’re taking when using certain wallets and or services.

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Related articles:

• Detecting Scam ICOs (https://cryptosec.info/guides/scam-icos/)
• DOs and DON’Ts on Securing Your Cryptocurrency Investments  (https://cryptosec.info/guides/crypto-investment-dos-and-donts/)
• Bitcoin and Cryptocurrency Wallets and it's risks (https://cryptosec.info/guides/cryptocurrency-wallets-and-its-risks/)

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I would add scam emails/PMs under phishing sites. They often come from seemingly official email accounts, say there's a problem with your account somewhere, and ask you to click a seemingly legitimate link to log in, only to direct you to a phishing site. They're not as common as the typical attacks, and often not sophisticated enough to be believable, but I thought they're still worth mentioning.

Thanks for heads up. I mentioned emails on our site but for some reason missed the copy-paste on that part.

Hi. When are you planning on adding more to the list?

Who can help me contact admin. I have just been ripped by this vendor https://bitcointalk.org/index.php?topic=1999963.80

I believe that admins are aware of this adverts here on this site?

If I have time. I'm currently on a trip.

That's a great OP. It's crazy how scams can be categorized as when it comes right down to it, they're all basically the same.

On the scam ICO topic, it's important to note that many ICO projects started by sincere and honest people also fail due to lack of resources of various kinds making them unable to ultimately deliver. You have to really know some financial terms and concepts in order to properly conduct due diligence on such projects. You can find lots of information at https://dnotesedu.com/

This op-ed article contains some interesting statistics about ICOs: https://dcebrief.com/op-ed-icos-are-damaging-crypto/

Thanks for the vital info.

True. Some projects simply don't have enough funding. Those projects are probably a minority compared to the number of scams though. Thanks for the heads up. And thanks for the merit!

I didn't know domains like "biṇaṇce.com" could be used. Thanks for the warning.

You're welcome. Hackers and scammers can be really really creative and innovative when making their scams convincing.

You may also want to link this in case people don't believe that most ICOs are scams until they see actual figures lol. Perfect for that red text "a good percentage of ICOs are indeed scams":

https://www.investopedia.com/news/80-icos-are-scams-report/

Aaand you should have enough merits to be a member for those images now! Keep up the good work!

People probably still think it's still like lastyear, where pretty much majority of the ICOs turned into a profit.



Thanks! Now I'd have to wait til I have 60 activity  ::) l0l

Edited the post to add the IMG tags. Thanks for the merits!

You should adding SCAM Airdrop, too. Such as: DENTACOIN, or nearly GXS.  That's not meaning that coin is scam. Just someone make scam airdrop base on existing coin:
- Firstly, they collect ETH address and private informations (that's is usual as other airdrops)
- Secondly, they call for donation for airdrop, not small as gas fee, they call for big donation, may be 1, 5 Eth or more for bonuses.
- Thirdly, they cheat some chickens by call them to give wallet's private key for examining that you owning that address or not
- And more...

Though a big percentage of airdrops are scams to start with, I agree. I'll add airdrops to the list soon. Thanks for the heads up!

You're really likely to not figure it out if you don't educate yourself.

Scamming is a major issue in the world of cryptocurrency. They are the dirty fish in the pond. My advise for people is to check the company before investing in them. Check their development team and do background research before forking out your cash.

As there's so much scam ICOs out there, right now I'd just simply suggest to NOT invest in ICOs. I'd personally just invest in the top reputable coins instead.

Education is the safest bet to not get scammed. Crypto is, after all, a complex topic.

Some scam coins/airdrops ask for private keys, if you don’t understand the difference between public / private key, you are easily relieved of your coins.

New exchanges / mining pools can also be dangerous. They may look legit and still run off with your coins.

Crypto is still Wild West. No central authority to help you out. By design. Careful out there

Also, be careful, sometimes some campaigns distribute coins (airdrop) and offer to download their own purse, which contains a virus that later steals your data or sells analytics to use your device to sell the data to advertisers.

This is a tough one to prevent for the average Joe. Almost all wallets trigger an anti virus alert (and they need to be manually whitelisted to enable launch), it‘s extremely difficult to see whether the wallet comes with a built in surprise.