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10 Bitcoin Scams You Should Be Aware Of and Remain Vigilant

itcoin Scams You Should Be Aware Of and Remain Vigilant

With cross-border fees from typical digital and bank-based payment services increasing, Singaporeans and people worldwide found an alternative to cut out the unnecessary middleman. Cryptocurrencies — which began with Bitcoin — became the world’s best avenue for cross-border purchases and commerce without limitations.

However, middlemen did more than just transport money and took a small fee. They regulated and oversaw security for all transactions. In doing so, they can trace problematic transactions and unveil scams in real-time. In the world of cryptocurrency and Bitcoin, this danger is always present. It takes a discerning mind to spot possible scams. For everyone’s safety, we’ve made this list of the most common cryptocurrency scams in existence.

What is Bitcoin and Cryptocurrency?

An Introduction to Bitcoin and Cryptocurrency

Before we dive into the topic, let’s discuss Bitcoin and cryptocurrency in general.
Bitcoin came to light in 2009 after Satoshi Nakamura sent a unique page-long study on using cryptocurrencies as a means for future transactions using the Internet. The author — which many believe in having published his paper using a fake name — completed a first Bitcoin transaction in the same year.

Cryptocurrencies and Bitcoin grew to fame almost a decade afterward. In December 2017, Bitcoin reached its highest value reaching beyond $19,500 per coin. During the craze the enormous rally brought, many people dove into and studied cryptocurrencies. Unfortunately, these included a considerable number of unwitting investors, who fell into the jaws of Bitcoin and cryptocurrency scammers.

Why Do People Invest So Much on Crypto Today?

Cryptocurrencies, such as Bitcoin, Ethereum, and the other 3,000 variations you’ll find worldwide, have the most significant potential to be the most sustainable and practical e-commerce currencies in the future. Cross border fees from Paypal and other online payment and transaction services continue to plague many consumers. With cryptocurrencies, they can cut out the middlemen.

Additionally, they can receive great benefits from cryptocurrency’s secure infrastructure. All transactions are end-to-end transmissions. Blockchain technology encrypts financial information, through which buyers or sellers with the recognized private key can only unlock. In doing so, cryptocurrencies can publish open ledgers that are tamper-proof to the point hackers cannot decipher a fast-reacting blockchain system.

The security, convenience, and anonymity that cryptocurrencies provide consumers is one of its greatest appeals. Unfortunately, the same features make it easy for scammers to get away with their illegal means to profit.

How to avoid being scammed

10 Bitcoin Scams To Watch Out For

On the other hand, it’s not difficult to identify scams before they happen to you. Social media, forums, and email newsletters are great avenues to learn more about possible Bitcoin and cryptocurrency scams. However, these unscrupulous individuals and groups are finding different and unique ways to deceive and trick you into their high-stakes, high-return promises, and means to make you believe their faux legitimacy.

In April 2019, crypto security firm CipherTrace found that crypto criminals and scammers have stolen different cryptocurrencies, making up more than $1.2 billion in combined value in the first quarter of 2019 alone. The discovery has triggered a massive international movement to help secure and identify money laundering and illicit practices online.

On the other hand, CipherTrace discovered that most cases didn’t involve hacking. Scammers have tricked users into shady deals and practices that promised high returns, automated investments, and others. Here are ten scams whose patterns you can identify quickly and avoid without trouble.


Before cryptocurrencies hit the mainstream — even before the Internet and emails became as powerful as they are today — phishing has been a practice for many criminals and scammers worldwide. In the past, homeowners received an unsolicited letter. Criminals provided a return address for the response letter, and the latter contained delicate and sensitive information. The scammers can either sell or access the accounts and extract all its contents.

The email was the digital avenue phishing practices began. Scammers used the same methods to access delicate information. Their website looks so identical to your bank’s website. In the case of cryptocurrency, you’re taken to a website that looks identical to your crypto exchange or wallet. You’ll be fooled to use your login credentials to enter the site only to discover it won’t even let you join.

The best way to identify crypto phishing emails is to check the user’s address. If the email domain is different from the official crypto exchange website, don’t even bother replying to the phishing email. Additionally, ask about your crypto exchange’s customer support process — and they’ll verify that they will never ask you for your private key or other login information.

Fraudulent Exchanges

Even if you’re a prolific computer keyboard user who has transitioned into smartphone digitizer keyboards, you can still mistype a few URLs. It’s laughable to see someone rip off a real-world website, such as your cryptocurrency exchange, but some scammers design their websites to look as close and genuine as the real thing.

If you’re not paying attention, and you did mistype the exchange URL, you might just walk right into scammers with your private key in their hands. Fraudulent exchanges appear genuine, which is enough to trap some crypto users. However, to better entice victims, they’ll introduce promotional offers that provide the “best” returns that sound too good to be true. Furthermore, they’ll give you great bonuses if you deposit more cash in exchange for a target cryptocurrency.

However, once you’re done making a deposit, and you plan to buy or sell cryptocurrencies, you’ll find these sites to have unfinished pages that lead to such links. At this point, most victims will realize they’ve been duped right after they’ve made their deposit.

To avoid this, it’s best to stick with well-known and forum-supported popular exchanges. Binance, Coinbase, and Bit2me are vast networks, to name a few. Before using any kind of wallet, find out more about the company and service providers. Lastly, don’t give in to “too good to be true” promises because you’ll end up with more significant losses.

Malware scams are very common


Cryptocurrencies aren’t paper money or actual coins that you can touch and distribute. They’re part of a digital platform that uses a program compatible with your operating system. It contains information that only your wallet’s private key can unlock.

Malware has been around since computers have evolved, and digital transactions have become possible. Crypto-targeting malware will try to sniff out your web wallet, replace your crypto address with that of a scammer (which you cannot reverse), and possibly infect your computer with an illegal cloud miner. Keep updating your antivirus and only use secure connections when using your cryptos.

Unregistered and Pretentious ICOs

In 2018, Facebook noticed a significant uptick in the number of illicit initial coin offerings (ICO) by different cryptocurrency companies. They’ve seen many misled Facebook-originating customers by unscrupulous ICOs.

Being short on resources and having no means to verify the ICO legitimacy of these companies, Facebook then decided to ban all Bitcoin, ICOs, and cryptocurrency advertisements by January 2018.

They argued that many of the unregistered and pretentious ICOs were promoting financial products that were misleading and using “deceptive promotional practices.”

However, up to this day, Facebook’s promise to re-evaluate its ban on ICO advertisements is still to yield results. Many of these unregistered and pretentious ICOs label themselves as “the next Bitcoin”. They even publish “white papers” or documents that explain the “unique” decentralization of their cryptocurrency.

Many reported buying into the hyped and appealing deal only to fall short of the promise. The most crucial aspect of reading from every crypto offering’s white paper is the evidence-based study and statistics. Furthermore, learn about the track record of every core team member that implements the cryptocurrency.


The traditional stock market eliminated speculation after involving regulators and the government. In this way, everyone trades at the same opening and closing of markets.

However, because of its decentralized nature, cryptocurrencies are a speculator swindler’s dream. Without regulators, malicious investing groups can target Bitcoin or other cryptocurrencies. Then, they’ll inflate the value of the coin by purchasing vast supplies of it.

This activity locks out many cryptocurrency investors and can render Bitcoin and other currencies from purchasing coins. Additionally, it can blow the cryptocurrency you’re investing in out of the water. Thankfully, cryptocurrency communities are aware of sharp ticks that indicate pump and dump activities. In doing so, they can warn many people to steer clear purchasing any artificially-inflated cryptos circulating the market.

Pyramid Scams

Charles Ponzi from Italy ran the very first pyramiding scheme in 1920s America. He promised enormous returns for many ordinary people’s small investments. To gain their confidence, he’ll send the first and second check of supposed investment “returns” until he ran off with the money. This concept was so novel at the time that they named it after him.

Uninformed cryptocurrency users are at the mercy of modern-day Ponzis that use robust marketing strategies through fact-riddled white papers and social media hype. Real enough, competent, and capable cryptocurrencies such as Litecoin, Bitcoin, and other established cryptos. These cryptos don’t need additional advertisements.

Work in groups to scam you one being friendly the other to get sensitive information


Multi-vector attacks feel like a practice in the art of war, but scammers see every opportunity as a battlefield. They’ll work in groups. The first one sizes up the victim by appearing as a friendly face, the cryptocurrency leader, or an “employee” for the crypto’s marketing department. They’ll hand a survey to get sensitive information.

Then, they’ll forward this information to a “superior” who will contact the victim and urge them to invest. These individuals will appear friendly, professional, and confident. Impersonation scamming just has one flaw: when victims recognize the promises to be too good to be true. So, study calculations and don’t fall for easy-money tricks by anyone, not even legitimate workers of crypto publications or investment groups.

Unregulated Brokers

You’ll see in some exchanges and crypto forums individuals that promote themselves as crypto brokers. These people promise to manage your portfolio as a hedge fund manager will. Furthermore, they’ll present to your clients (which you can’t verify for the sake of anonymity) they’ve provided success over the years.

Unfortunately, it’s hard to trust brokers unless you know them personally. Additionally, they’re likely to tell you about promises and returns too good to be true. Always remember that once you make your crypto deposit, you can’t get it back. So, make sure to do background research on brokers you feel trustworthy — or just be diligent enough to manage your investment even if it’s a slow, rickety, but steady pace.

Automated Trading Systems

Machine learning has advanced in many ways. You can have a CD-quality recording using artificial intelligence. Therefore, automated trading systems do exist if this is the case. They do, but all stock exchanges worldwide ban their use because they’re unpredictable and can cause massive problems for currencies as a whole.

Additionally, the owners of these automated systems will charge a fortune for the use of their services. Taking advantage of the short movements of cryptos can create a form of income, but with the high service fees of automated trading systems, it feels more like a burden than an advantage.

Can you do anything if you are scammed?

Can You Do Anything If You’ve Been Scammed?

Singapore does not recognize any cryptocurrency as official tender or fiats because they lack jurisdiction and regulation of the currency due to its decentralized nature. However, the government continues to warn buyers of the dangers associated with cryptocurrencies. On the other hand, it continues to monitor crypto activities and recognizes exchanges, crypto kiosks, and the use of currency as goods and services.

The bottom line: Singapore’s government cannot help in retrieving the huge losses individuals can incur after scammers trick them after investing their coins. So, be very careful when investing!

Be Aware of The Dangers of Investing in Anything

Cryptocurrencies do feel like a tutorial for big-world stock and commodities markets. However, it isn’t easy during the start, so make sure you use just adequate amounts and see if your methods are working. Research and due diligence with your investment decisions will always merit excellent results.

If you’re short on cash and need some to start your cryptocurrency ventures, you can always count on Bugis Credit to provide a fast, less-than-a-week loan release after application. Contact us today or visit us to learn more about what we can do for you.

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