Everything You Need to Know About Bitcoin Scams and How to Avoid Them

Cryptocurrency, including Bitcoin, is a flexible way of paying for goods and services online. Many people are attracted to digital currencies, such as Bitcoin. The dark side is the ncrease in crypto scams and crypto complaints. It is important to be aware of the risks involved in cryptocurrencies and to avoid a crypto scam. 

Crypto-Trace is your antidote to crypto scams. Our professionals have the skill and expertise to track down the fraudsters and to trace their movements. Our professionals create a full investigative report that can be used to file claims or approach authorities. We give our tools to pursue crypto scams and to help you pursue justice if you have been the target of a bitcoin fraud.

About Bitcoin

Bitcoin was introduced in 2009 and was the first of many cryptocurrencies. The innovation represented by Bitcoin was that it was the first completely digital currency with no physical equivalent. Bitcoin transactions are reported on the blockchain and on public ledgers. 

Recently, Bitcoin has risen in value and prestige. Tesla CEO Elon Musk made a $1.5 billion investment in Bitcoin. This currency is gaining wider acceptance as a form of payment online. Many people enjoy the flexibility, anonymity, and the lack of government regulation involved with cryptocurrencies.

Why Are There So Many Bitcoin Scams?

The very reasons people enjoy cryptocurrencies are the same explanations for the number of crypto scams out there. The fact that it can be hard to trace bitcoin transactions, that they are non-refundable and are not under the authority of government regulation can seem to give many fraudsters a pass and can help them shield their activities. 

Although it may seem difficult to trace crypto scams, there are ways to track down fraudsters and catch them. Crypto-Trace professionals are familiar with cryptocurrency scams and the methodology of bitcoin fraud. We can help you create a report that will make it easier for the authorities to track down bitcoin scammers.

Types of Crypto Scams

Fake Wallets

Fake wallets are a common bitcoin-crypto scam that involve the direct theft of coins right out of a hardware wallet. These are especially unfortunate because the crypto-user was trying to find a way to secure their virtual coins only to find that the seller of the wallet is a fraudster. 

One way this crypto scam works is through a secret seed phrase hidden in a scratch card. They will then ask the victim to use the code in the setup, which will give them access to the bitcoin in the wallet. The fraudster can steal all of the bitcoin wallets in a matter of minutes. It is, therefore, important to buy wallets only from companies that are known to be reliable.

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Crypto Impersonation Scams

One of the most high-profile crypto scams is the crypto impersonation scams. This occurred in the summer of 2020 when a teenage scammer had hacked into the Twitter accounts of several celebrities and urged people to make donations in Bitcoin to a charity. 

These names included Bill Gates, Barack Obama, and many others. Fortunately, the hacker was caught before many donations were made, but the ease with which he was able to hack the Twitter accounts and ask for donations was sobering. 

Some of these crypto scams don’t involve actual hacking into accounts but impersonating celebrities with fake accounts. These work on the same principles as the hackers with false requests for donations.

False Cloud Mining Scams

This common crypto scam asks people to invest in your Bitcoin in return for hash power, or that you will pool your funds with other investors in cloud mining. This scam often has the veneer of respectability by returning investments of just the first few early investors, but will then shut down after it has secured enough money. This will lock all additional investors out of not only the returns promised but the money they put into the investment. 

Fake ICOs

Since Bitcoin first emerged, many other cryptocurrencies have followed. Each time there is a new type of digital currency on the market, it is introduced with an ICO, or an Initial Coin Offering. When companies go public, for instance, they are given an IPO or an Initial Public Offering, and this is the digital coin version. 

Like any fake investment, when the investors put the money in, the sponsors of the deal disappear. Sometimes, however, they can be tracked down. 

DeFi Rug Pulls

Cryptocurrency provides plenty of flexibility on its own, but DeFis provide even more choices. DeFis enable people to invest in invest or realize profits from their cryptocurrency without actually having to invest it. This creates a less centralized way of using blockchain technology for dealing with bitcoin. There are many innovative ways crypto-holders can use DeFi, such as to lend out bitcoin to other users. 

As the name “DeFi rug pulls” implies, once the investment is made, the other part of the deal is not fulfilled, but the crypto scam artists usually disappear.

Tips for Avoiding Bitcoin Scams

Although crypto scam artists may get craftier with each passing month, there are still many steps you can take to avoid getting your cryptocurrency stolen or your personal data hacked: 

  • Don’t give anyone your Bitcoin information or passcodes
  • If a celebrity social media account asks for donations, look for confirmation of such efforts by doing a Google Search
  • Purchase cryptocurrency apps and wallets only from trusted apps—Google Play or the Apple’s App store are 100% free of scammy apps
  • Research investments well–only use a registered broker
  • Avoid clicking any unfamiliar links


Has a Crypto Scam Stolen Your Coins or Data? Contact Crypto Trace

Crypto Trace professionals will provide the tools to making a claim against a crypto scam. Our skilled researchers know how to track down the crypto scam artists and do a full investigative report into their activities. We can provide a detailed report that you can present to authorities and greatly improve the chances of catching the cyber criminals and retrieving your funds. Consult with Crypto Trace experts today.