Global Cryptocurrency Scams to Be Aware Of

With any investment, risks are part of the game.

So, it pays to be cautious.

Markets have been slammed with attacks and scams that have cost investors millions of dollars. 

Scam artists use phishing techniques, pump and dump schemes, ICO fraud, even Ponzi schemes.

All as cryptocurrencies like Bitcoin have grown in popularity.


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In 2017 alone, investors reportedly lost over $490 million to crypto-related scams.

According to the US Federal Trade Commission (FTC), investors lost nearly $532 million in in the first two months of 2018.

UK Regulator Updates Scam Warning

The UK Financial Conduct Authority (FCA) re-published its warning on scams. 

All as the agency sees a rising number of scam complaints.

Social media ads for example link to sites that appear real, but are not. Other scam artists use images of celebrities to make an investment appear to be real.

A similar warning was issued by the UK’s Action Fraud group.

They raised the alarm on “the growing problem of criminals using the reputation of prominent people in cryptocurrency scams”. According to Cryptovest, examples including Deborah Meaden from the BBC’s Dragons' Den and Martin Lewis, the founder of Money Saving Expert.

Their names have been used even without knowledge or consent.

Others are tricking investors into buying coins that don’t even exist. Once they have investor money in hand, scam artists shut down the offering without warning for example. Oftentimes, they’ll refuse to return the funds to investors, or ask for more money with a promise of returned funds. Unfortunately, no return is actually made.

Ponzi and Pump-and-Dump Schemes

A coin referred to as SLS was once pumped from .0046 and sent to .0046 mid-pump. After the dump, the coin value was sent back to .0049.

According to Crypto Insider:

Cryptocurrency pump-and-dump schemes are commonly found on chat platforms such as Discord and Telegram. Large groups of users (2,000+) coordinate a targeted pump on thinly traded smaller market cap altcoins, This leads to a window as small as 30 seconds for buyers to take profit. Nefarious tactics are often used, such as ringleaders in the operation pre-purchasing the coin to sell into their community's buy orders for profits.

According to the CFTC:

"Customers should not purchase virtual currencies, digital coins, or tokens based on social media tips or sudden price spikes," the agencies caution. Describing the fraud as an "old scam, new technology," the CFTC warned that, "same basic fraud is now occurring using little known virtual currencies and digital coins or tokens."

To avoid such a scam:

- Don’t buy a coin or token on a tip, especially if it comes from social media

- Don’t believe ads or sites that promise eye-popping wealth. 

- Do your own research and attempt to separate hype from fact

- If you believe you were scammed, you can always contact the CFTC, too

Fake Wallets

When investors use virtual wallets, they open themselves to risk by connecting online, where scammers play and steal.  The problem is that fake wallets are found both online and in mobile app stores, so cautious is a prerequisite.

According to CoinDesk:

More than $3.3 million has been stolen as part of an elaborate scam that took advantage of bitcoin users seeking to claim their share of the newly created cryptocurrency bitcoin gold. Perpetrated by the operators of a website called mybtgwallet.com, the scheme prompted users to submit their private keys or recovery seeds as a means to generate bitcoin gold wallets, as seen on an Internet Archive Spreadsheet. Shortly after users did so, however, the cryptocurrency holdings in their wallets were sent to different addresses. At least $30,000 in ethereum, $72,000 in litecoin, $107,000 in bitcoin gold and more than $3 million in bitcoin were confiscated, according to self-reported numbers.

A fake MyEtherWallet had to be removed from Apple’s App store after becoming incredibly popular.  What’s interesting is that on December 10, 2017, developers of the real MyEtherWallet.com tweeted, “This is NOT US.  We have file reports and e-mailed and reported.”  A day later, Apple removed the fake app from its store.

Unfortunately, prior to the removal, 3,000 people had downloaded the app, netting the person behind the scam as much as $15,000 in a very short period of time.

To avoid such a scam, only use wallet service with a solid track record.

Bonus Report: There are several patterns that can pintpoint the likely price movement of cryptos. Click Here to get the full report on how to spot these patterns.