How to Recognise a Bitcoin Scam

An ultimate guide to protect your crypto funds from fraudsters.

Don’t let bitcoin scammers fool you

Bitcoins and other cryptos are no doubt on the cutting edge of technology. Due to their near instant transactions, the blockchain technology behind them, or for their potential to allow people to have control of their own money without entrusting them to banks or other third parties, they are no doubt revolutionising money as we know it.

Despite all of these upsides, there is a certain degree of risk when it comes to holding them. Simply put, there are people out there that want to steal your money, whether you hold it in Euros or bitcoins, it doesn’t matter to them. The incentives for stealing cryptos vary, but it’s worth pointing out how lucrative they are, and how a tech-savvy scammer or fraudster could easily steal from someone who is ignorant to their unsavory tricks and practices.

It can be a daunting task to maintain the security of your cryptocurrencies, so we’ve decided to publish a series of articles dedicated to keeping your money safe. This will be the first of several articles on this subject, and in this piece, we’ll be talking about how to identify different scams and fraudsters.

Bitcoin Ponzi Schemes

Charles Ponzi may have invented and given his namesake to this unscrupulous practice in the 1920s, but it still exists to this day. This scheme works by having each round of investors attract newer unsuspecting ones with promises of unreal profits and riches.

Obviously, such pyramids can’t grow forever. The moment comes when the whole scheme comes crashing and most of its participants end up with nothing but tremendous regrets and empty wallets.

Red flags

Look for the following signs to warn you about the potential fraud:

  • The revenue promised is much higher than the market average.
  • Your revenue strongly depends on your referrals and affiliates.
  • A vague and unclear explanation of how the scheme works.
  • A complex funds withdrawal procedure
  • Scarce information about the company and its founders in the open sources.

Bitcoin Phishing Scams

A phishing scam is a fake email that was sent on behalf of a company (like Cryptopay, for instance) or a fake website. These websites and emails invite users to enter or share their personal data, such as username, password, security code, etc. This doesn’t let the victim log into the real website, while scammers get all the sensitive account data.

If this happens to your Bitcoin account, villains can easily withdraw your money. Moreover, harm could be much worse if you use the same password on other websites.

Also, there are a number of phishing websites that attempt to make themselves appear as the Cryptopay website. We plan to devote a separate article to reveal these projects.

Red flags

  • Double-check if the website address is spelled correctly.
  • Look for mailbox alerts on suspicious content.
  • Typically, a phishing email doesn’t address its victim personally. Instead, it says ‘dear sir / madam’.
  • A phishing email may urge you to take actions quickly and implies that your funds or account will be blocked immediately.

How to protect yourself

  • Set up unique, strong passwords for each website you visit, especially for those with sensitive data.
  • If a website allows you to use multi-factor authentication, be sure to do so.
  • Use password management tools with a good reputation.
  • Don’t click the links or download the attachments in suspicious emails.

Malicious Software

A malicious program or malware is used by criminals to gain unauthorized access to your computer.

Once a virus seeds into your PC, it starts doing whatever it was designed for. For example, it may compromise your BTC wallet, and whenever you want to send some Bitcoins to your friend or a business partner, it replaces the original address to the one that belongs to a scammer.

Red flags

  • Your PC runs much slower than usual.
  • You constantly receive tons of unwanted pop-up ads.
  • You may spot some unusual activity that you haven’t noticed before.

How to protect yourself

  • Whenever you want to download a file from the internet, always check it with the anti-virus software.
  • Download files from reputable sources only.

If you believe your device is infected, do the following:

  • Don’t use it for online transactions or logging into your accounts unless the threat is removed.
  • Instantly scan the device with the anti-virus software.
  • Get in touch with a professional who checks your device and fix the damage.

Bitcoin Wallet and Exchange Scams

So you’ve finally got your hands on some bitcoins, but now the question arises. Where should you store them? Of course, there are many respected and secure wallets out there, but you must be vigilant about which one you decide to use.

Such scams promise to provide you with a wallet or a platform to exchange cryptocurrencies, gain your trust and then and once you transfer your Bitcoins, they disappear with your funds.

Red flags

  • The information about the project can’t be easily found in open sources.
  • The project is not mentioned in reputable media sources.
  • The website was created recently (check the age at
  • The connection is not secured (http instead of https)
  • Website reviews are bad or there are no reviews at all (look them up at Bitcoin forum)
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