Bitcoin and other cryptocurrencies are largely unregulated, meaning that scams, fraud, and thefts are rife. Whether you’re a bitcoin newbie or a seasoned investor, falling prey to a scam is easier than ever, unless you know what to look out for.  The Bitcoin value has attracted unwanted illegal tactics and spawned up multiple scams on the internet.  Here are six of the most common bitcoin scams in 2019 and how to avoid them.

 

1. Phishing Sites

Phishing sites are fake websites that look exactly like legitimate websites. These are set up in order to trick the users of genuine sites into entering their private details such as their username, password or even their bitcoin wallet’s private key.

 

Phishing sites could be set up for any bitcoin-related website including:

• Exchanges
• Mining pools
• ICO landing pages

New phishing sites are popping up all the time, but some sites operate successfully for years. Criminals use Facebook or Google ads to push unsuspecting users toward these sites in the hope that they enter their personal information.

 

Why phishing sites are so difficult to spot

It’s easier than you think to be duped into visiting a spoof site. You likely already know to check for a green site identify icon (https://) to the left of the URL on any website you visit as this indicates that the site has an SSL (secure sockets layer) certificate. However, some criminals manage to acquire genuine SSL certificates, giving their fake sites an air of legitimacy.  

 

How to avoid phishing scams

The golden rule for accessing any bitcoin website is to always navigate there directly and never from a link in an email or from an unknown source. It’s fine to use a bookmark in your browser that you created, but your best bet is to enter the URL directly into your browser.

 

2. Cryptophishing

The second most common bitcoin scam to watch out for in 2019 is spam email. The vast majority of bitcoin exchanges still use email for identity and verification procedures, so fake emails are abundant. Most crypto-phishing emails either offer a reward for completing a survey or tell you that someone has tried to access your bitcoin exchange account and asks you to complete a verification procedure.

 

Spam emails are effective because real cryptocurrency exchanges such as Coinbase.com always send email verification links when you try to log in from a new device or new location, asking you to confirm your device. Email spammers create emails that are almost identical to the real thing, but they link to a phishing site instead of the genuine webpage.

 

How to avoid this scam

Most email providers have anti-phishing algorithms and security precautions in place that are good are flagging up cryptophishing emails so you should never see them. As a precaution, you should familiarize yourself with genuine emails from whichever exchanges or websites you use so you know exactly what they look like. Unless you can be sure that you generated the email, by trying to log on for example, never click on a link in an email sent to you. Report any spam emails that you receive and flag them as spam if your email provider gives you this option.

 

3. Fake recovery sheets sent with hardware wallets

On the whole, the entire bitcoin community is far more clued up about potential scams than ever before. Most traders and investors know that online bitcoin wallets on cryptocurrency exchanges are fine for storing small amounts of bitcoin, but aren’t a very safe long-term option. The use of hardware wallets for highly-secure long-term storage has really taken off as they offer a convenient ‘cold storage’ solution for protecting large amounts of bitcoin. But the scammers have upped their game and the third scam to watch out for is fake recovery sheets send with hardware wallets.

 

Hardware wallets keep your bitcoin wallets’ private key secure, even if you use the device over an unsafe connection or via a computer infected with keylogger software. However, they still rely on having a ‘Recovery Seed’ or phrase that you can use to recover your bitcoin in case the device is lost, stolen or destroyed.

 

The fake recover sheet scam relies on new users failing to realize that hardware wallets create their own recovery seed. Scammers add fake ‘Recovery Sheets’ to genuine devices with their own recovery seeds written on them. The unsuspecting customer then enters the words and ‘recovers’ a device controlled by the scammer. Any funds then send to the bitcoin wallet can be stolen.

 

How to avoid this scam

Always buy a hardware wallet directly from the official website as fake or compromised devices can be an issue if you buy from third party resellers. Educate yourself about how to set up your device and look out for red-flags such as pre-filled recovery seed sheets.

 

4. Fake Facebook groups

Joining a Facebook group can be a helpful way of learning about bitcoin, but did you know that these too can be faked?

 

Scammers target popular cryptocurrency communities and create their own Facebook business pages that look almost identical to the real thing. They may use minute changes to the names of these groups. As Facebook lets people set any name they want, these pages are hard to spot, given that the name is far more prominent than the address.

 

For example, let’s say that ‘Bitcoin Platform’ is a popular Facebook community. A scammer could create a Facebook page with the exact same name, but use a number ‘1’ instead of the ‘l’ in the word ‘Platform’ in the URL. Such a tiny difference would be hard to spot unless you looked carefully at the URL.

 

As business or fan pages cannot directly contact any users on Facebook, scammers share the profile photo of the person they want to target. The owner of a business or fan page can then tag the person they just added. They can then direct phishing messages to these people.

 

How to avoid this scam

You can’t stop someone from sharing your profile photo or tagging you on Facebook as your profile photo is visible to everyone. Make sure you have disabled notifications about tags created by unknown communities, pages, and users.

 

5. Fake ICO scams

Fake ICO scams are fraudulent websites purporting to be up and coming companies with sound business strategies. They follow the classic ‘pump and dump’ model by generating interest around their new coin or token and pushing up its price to draw new investors in, before selling up and pulling out. To invest in an ICO usually requires bitcoin or ether, meaning that your money is at risk if you act on a leap of faith. The U.S. Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) have described ICO (Initial Coin Offering) scams as a case of “old scam, new technology.”  Especially when Bitcoin’s value reached an all time high in early 2018, these fake ICO scams were created in the hundreds promising to mimic the same type of gains.  

 

How to avoid this scam

Avoiding this type of scam has become much easier following Facebook’s move to ban cryptocurrency ads because so many of them are scams. According to the CFTC, there are three simple steps that anyone can follow to avoid falling prey to ICO scams. These include reporting suspicious activity to the CFTC, ignoring online ads or solicitations over social media and separating hype from facts when investing.

 

6. Bitcoin Sextortion Scam

The bitcoin sextorition scam is the latest scam trying to scare and steal everyone’s bitcoin through extortion.  Scammers will send you an email saying you have 72 hours to send them bitcoin or else they will release webcam video of you masturbating to everyone on your friend list on facebook or other social media platforms.  The scammers state specifically that they have been tracking your website visits to various adult sex sites and by visiting those sites, some how, you downloaded the scammers software they developed.  You may see your old password in the email sent to you, but try not to worry.  Usually these stolen passwords come from data breaches and may also see your phone number included in the email.  They acquire your phone number because usually its connected with your password, but most likely wasn’t hacked from your computer.

 

How to avoid this scam

First DO NOT PAY OR REPLY to the email, they are just trying to scare you, just delete the email.  Regardless if you know %100 you did not go to those sites and whether it is true or not, it is always recommended to change your passwords on all counts and update security measures such as two-factor authentication immediately then periodically especially when it comes down to money.  If the off chance and rare circumstance you read information on the scammer’s email that know one else would know except you, and is truly feel is a security breach and extortion, contact your local authorities.

Conclusion

New bitcoin scams are cropping up all the time so being prepared is your best defense against them. Our list of the five most common bitcoin scams should help you stay ahead of the curve over the years and months ahead.