Bitcoin is spreading like wildfire with a market cap over a billion dollars. This cryptocurrency is blowing up and everyone is taking notice, including the bad guys. Scammers will take advantage of every opportunity and Bitcoin is not immune to their crimes. Since Bitcoin has such a strong encryption with cryptography, scammers have to get creative with how to get this valuable coin. Investors not only have to worry about the volatility of this currency, but also the online attacks that come with the territory.


These scammers have gone through great lengths to make fake cryptocurrency exchanges, mining services, and wallets. The websites are here today and gone tomorrow and take what they can before they are. They usually pop up later under a different name to repeat the process. The exchanges usually advertise that you can get your Bitcoin for cheaper or at a discount then take your money and never deliver the Bitcoin. The wallets are a bit harder to crack, but usually just involve infecting your computer with malware to steal your private keys. Once they have your keys, your Bitcoin is as good as gone. Be on the lookout for these red flags and as always, be sure to use a reputable site to get your Bitcoin and store it. Best thing to do is to ask your peers about a service before using it on our forum. Chances are, if they have never heard of it, you should not use it.


Phishing emails are the oldest trick in the book. Phishing is defined as the attempt to obtain sensitive information such as usernames, passwords, and credit card details (and money), often for malicious reasons, by disguising as a trustworthy entity in an electronic communication. Scammers will pose as a reputable website or service and have you go to a fake site. They will then get all your personal information including your keys by using either malware or a fake sale. Then, they can spend money from your wallet anytime they want.


With the cryptocurrency craze, so many new coins are hitting the market. Developers raise capital by doing Initial Coin Offerings to gain investors. This creates the perfect opportunity for scammers to create a new coin to offer to investors and then run away with the money. They can also create fake websites and generate a “pre-sale” that will gain investors and you guessed it, run away with the money again. Chainalysis recently reported that ICO fraud has victimized 30,000 investors in 2017 alone, in the amount of $225 million. That is extremely effective scamming if you ask me!


One tactic that has been replicated on Wall Street many times is the Ponzi scheme. This is where the cyber criminals will offer a low investment that can be increased many times by signing up additional members using referrals. The scheme just keeps growing and growing until eventually the originator walks away and the pyramid collapses leaving you without your Bitcoin and them with all of it. The biggest red flag with these is the promise to double, triple, or even quadruple your Bitcoin overnight. It always involves you sending them some Bitcoin first before you can get a return on your investment.


One of the more creative methods is to get your phone number and trick your mobile carrier into porting your number into another phone. Once they have your number, they can reset the password to a digital wallet and drain the account. Most carriers require a PIN code as security measures get more strict, so this is more unlikely to happen, but still dangerous. Make sure you keep your PIN a secret and don’t let it get lost in cyberspace somewhere.

The bottom line is scammers want to profit from Bitcoin by any means necessary so you need to be on guard at all times. The best way to combat these criminals is to do your research, ask your peers, and trust your gut.