How Can I Recover Scammed Bitcoin?

Bitcoin — the possible Pandora’s Box of the currency world — has never been short of controversy. Whether it be aiding the black market or scamming users out of millions, bitcoin is no stranger to the front page. However, there have been several legitimate bitcoin scams that have become infamous, and you need to know about them — but, what are the top bitcoin scams? And how can you avoid them? And also how to recover your scammed bitcoin.

What Is a Bitcoin Scam?

For most cases, it may be pretty obvious what a scam is — but with bitcoin, and cryptocurrency in general, things become murkier. Bitcoin itself is an unregulated form of currency that essentially is a mere number that is only given value because of an agreement. It’s basically like a moneybag with a lock on it — the code of which is given to the recipient of the bitcoin.

Bitcoin scams have been famously criminal and public in nature. With no bank as a middleman in exchange, things become more complicated; so hackers and con men have had a heyday.

Top Bitcoin Scams to Avoid

There have been (and undoubtedly will be) nearly countless bitcoin scams, but these frauds make the list of the top worst bitcoin scams to date to take note of.

1. Malware Scams

Malware has long been the hallmark of many online scams. But with cryptocurrency, it poses an increased threat given the nature of the currency in and of itself.

Malware has long been a weapon in the arsenal of online scammers. But thanks to the complicated and highly technical nature of cryptocurrencies, much of which isn’t well understood by most people, malware now poses an even bigger threat.

Rather than stealing credit card and bank account details, crypto-related malware is designed to get access to your web wallet and drain your account, monitor the Windows clipboard for cryptocurrency addresses and replace your legitimate address with an address belonging to a scammer, or even infect your computer with a cryptocurrency miner.

How to avoid cryptocurrency malware scams:

a.) Update your antivirus software regularly to protect yourself against malware.

b.) Never download and install programs unless you’re 100% sure they’re from a reputable, legitimate provider.

c.) Don’t open suspicious attachments.

2. Fake Bitcoin Exchanges

In a similar vein to phishing scams, keep an eye out for fake bitcoin exchanges. They might walk and talk like a reputable exchange, but they’re merely a front to separate consumers from their hard-earned cash.

Some will entice users with promotional offers that sound too good to be true. Others pressure users into creating an account and depositing funds, perhaps even offering “bonuses” to those who deposit larger amounts. But once they have your money these platforms might charge ridiculously high fees, make it very difficult to withdraw funds or simply steal your deposit altogether.

Surely one of the easiest ways to scam investors is to pose as an affiliate branch of a respectable and legitimate organization. Well, that’s exactly what scammers in the bitcoin field are doing.

How to avoid fake exchange and fake wallet scams:

a.) Stick with well-known and popular exchanges.

b.) Thoroughly research any exchange or wallet before creating an account — who is the team behind the exchange or wallet? Where is the company registered? Are there reliable reviews from other users confirming its legitimacy?

c.) Don’t let yourself be pressured into depositing funds or providing any personal information.

d.) Don’t just randomly pick a wallet from the app store — only download apps and software from legitimate wallet providers and exchanges.

3. Ponzi Scheme — MiningMax

“Ponzi bitcoin scam” has got to be the worst combination of words imaginable for financial gurus. And, the reality is just as bad.

A Ponzi scheme is a simple but alarmingly effective scam that lures in new investors with the promise of unusually high returns. Here’s how it works: a promoter convinces people to invest in their scheme. These initial investors receive what they believe to be returns, but are actually payouts from the money deposited by newer investors. Now satisfied that the scheme is legit, those investors who received payouts pump more of their money into the scheme and encourage others to do the same.

How to avoid Ponzi/pyramid schemes:

a.) Look out for cryptocurrency projects that encourage you to recruit new investors to enjoy bigger profits.

b.) Never trust a scheme that promises returns that sound too good to be true.

4. Fake Bitcoin Scam

A classic (but no less dubious) scam involving bitcoin and cryptocurrency is simply, well, fake currency. One such arbiter of this faux bitcoin was My Big Coin. Essentially, the site sold fake bitcoin. Plain and simple.

I am here to tell you that if you have ever been told that you are too late to ‘cash in’ on the Bitcoin ‘craze’, and there is a better alternative out there, RUN because you are about to get scammed.

The first one that comes to my mind is My Big Coin. The con artists behind this scam were shut down for this exact reason.

They took over $5 million from investors so they could supposedly invest in a new cryptocurrency for them. Instead, they took the money and redirected it into their own banking accounts.

5. ICO Scam — Bitcoin Savings and Trust and Centra Tech

Still other scammers have used ICO’s — initial coin offerings — to dupe users out of their money.

Along with the rise in blockchain-backed companies, fake ICOs became popular as a way to back these new companies. However, given the unregulated nature of bitcoin itself, the door has been wide open for fraud.

Most ICO frauds have taken place through getting investors to invest in or through fake ICO websites using faulty wallets, or by posing as real cryptocurrency-based companies.

6. Pump and Dump Scam

While this type of scam is certainly not relegated to just bitcoin (thank you for the education, “The Wolf of Wall Street”), a pump-and-dump scam is especially dangerous in the internet space.

The basic idea is that investors hype up (or “pump up”) a certain bitcoin — that is usually an alternative coin that is very cheap but high risk — via investor’s websites, blogs, or even Reddit, according to The Daily Dot. Once the scammers pump up a certain bitcoin enough, skyrocketing its value, they cash out and “dump” their bitcoin onto the naïve investors who bought into the bitcoin thinking it was the next big thing.

Bittrex, a popular bitcoin exchange site, released a set of guidelines to avoid bitcoin pump-and-dump scams.

While “stackin’ penny stocks” may sound like an appealing way to earn an extra buck (thanks to its glamorization by Jordan Belfort), messing in bitcoin scams is nothing to smirk at.

How to Avoid Bitcoin Scams

With the inevitable rise of bitcoin in current and coming years, it is becoming increasingly important to understand and be on the lookout for bitcoin scams that could cost you thousands. As more people become interested in Bitcoin, more people are also likely to try and pull off a scam.

There is no one formula to avoiding being scammed, but reading up on the latest bitcoin red flags, keeping information private, and double checking sources before investing in anything are good standard procedures that may help save you from being duped. Cryptocurrency can be a confusing topic even for the experienced Bitcoin enthusiast, so the more you read up on the world of Bitcoin, the more prepared you can be. After all, knowledge is power.

Have you been a victim of scam in any means? Contact a bitcoin recovery expert to recover funds lost to Binary Option, Forex trade and Cryptocurrency scam. Follow the link to make a report and stand a chance of recovering your funds lost to online scam.

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