Ever since its inception in 2009, Bitcoin has been gaining incredible popularity among traders and investors. The pioneering cryptocurrency has fluctuated in price over the years with its current value being on the rise due to its newly approved spot ETF and upcoming halving in April.

But is Bitcoin a scam? Many are still wondering whether the virtual asset is legitimate and if they can profit from investing in it. 

Due to its rising popularity, there has been an increase in Bitcoin scam variants. These schemes can leave users with devastating financial losses if not spotted promptly. Learn the common types of Bitcoin scams and how to protect yourself from cyber fraud.

What is Bitcoin?

In a nutshell, Bitcoin (BTC) is a decentralized virtual currency, i.e. crypto coin without a central bank or administrator. It is an asset that can be sent from user to user on the peer-to-peer (P2P) network without the need for third parties. 

Network nodes verify transactions through cryptography and keep a record on a publicly distributed ledger, commonly known as a blockchain. Bitcoin is the largest cryptocurrency with a market cap of more than one trillion, as of writing.

Common Types of BTC Scam

There are many variants of Bitcoin scams. Some fraudsters use the names of well-known individuals or organizations to promote their illicit schemes through various giveaways. Others resort to impersonating these people or companies.

Then we have the classic investment scams and pump-and-dump maneuvers. Sometimes, more than one type is in play, which is why you should get familiar with how each works. 

Giveaway Scam

This type of scheme involves financial swindlers impersonating famous people or companies in the cryptocurrency space and promising to give away free Bitcoin. One of the most controversial examples was the Warren Buffett Bitcoin scam, where cunning operators used the name of the businessman as a ruse.

Unwary investors are typically asked to send a small amount of crypto to a wallet to receive a larger sum in return. Although it sounds alluring, it’s definitely too good to be true. 

After the initial payment, the fraudsters simply vanish. Aside from famous businessmen and entrepreneurs, they use the names of artists and actors, making it seem as if they are promoting fake offers. We thus had the Drake Bitcoin scam and fake promo codes.

Impersonation Scam

For this dubious tactic, fraudsters create fake social media accounts or bogus websites that impersonate legitimate crypto exchanges, individuals, or organizations. Victims are duped into sending their Bitcoin or other crypto assets to these fake accounts.

For instance, we had the PayPal Bitcoin scam email affair relatively recently; the email includes a link that displays the invoice, which leads to a fake PayPal login page. Scammers tricked users into paying fake BTC invoices! Once the transfer has been made, the senders magically disappear.

Investment Scam

A Bitcoin investment scam revolves around promising high and unrealistic returns in short periods with minimal risk. Scammers back up their operations with fake testimonials, false exchange rates, and other deceptive tactics. 

They often promote something like a 50% return on investment in just one week, which is impossible unless you roll the dice and get lucky. Normally, your crypto assets are what they want. Once the investor sends his/her crypto, they realize that they have been defrauded. 

Mining Scam & Pump and Dump Scheme

Some companies pretend to provide mining services using a mining cloud. This is known as a Bitcoin mining scam. They take your money and never mine any crypto whatsoever. People often fall for the trick because they want to get their hands on the largest virtual asset without investing much effort or time. If you’re interested in mining, stick to legitimate firms.

On the other hand, pump-and-dump schemes involve artificially inflating the price of crypto through false announcements. Afterward, the scammers sell off all their holdings at a profit, causing the price to crash and leaving investors with shitcoins, excuse the language.

How to Protect Yourself From Bitcoin Scam?

Look for red flags that are usually in plain sight. We advise you to follow the following steps and ensure you protect your funds in the online space. 

• Research – Always check whether the crypto offer sounds realistic and who is offering it. Is it a transparent company or an anonymous website?
• Report Bitcoin scam – Inform the relevant financial market regulator and local law enforcement about the scheme by filing a complaint. Request immediate action against the fraud.
• Use a reputable exchange – Open an account with a renowned and credible crypto exchange to buy, sell, and store your Bitcoin and other virtual assets.
• Enable two-factor authentication (2FA) – Use 2FA on your crypto exchange account and wallet to add an additional layer of security.
• Caution – Be wary of emails, pop-up messages, or websites that ask for your personal information or crypto wallet details in a suspicious manner.

By sticking to these rules, you are staying safe in the crypto industry and focusing on making the most out of investing or trading Bitcoin.

Is There a Way to Recover Lost Crypto?

As you may imagine, recovering lost crypto is extremely challenging. Due to the virtual assets’ decentralized systems, transactions are difficult to trace. Nevertheless, there is a way to recover stolen crypto, but you must get professional assistance.

Enter CipherTrace, a powerful software designed to track crypto transactions and identify the wallet that received the coins. The program thus carves your path to requesting a refund from the exchange and getting your money back!

If you are a victim of a cyber fraud involving Bitcoin and other cryptocurrencies, please book a consultation with Scam Brokers Reviews. We boast a team of experts who skillfully handle fraud cases involving Forex, investments, and crypto. They can help you get your money back!

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