Bitcoin has been one of the revolutionary inventions in the modern world. Within a decade of its existence, BTC has become one of the most valuable financial assets in the world. However, with the fame and popularity of its positive aspects, there are several aspects associated with BTC which might cause hesitation among the investors to put their money in it. Among these aspects, a major one is cryptocurrency scams. Over the years, numerous scams have emerged where people lost their bitcoin reserves falling victim to scams. This article sheds light upon 3 of the most common BTC Scams and ways how you can avoid them if you are in such a situation.
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Following is a list of 3 of the worst BTC scams that people or organizations fell victim to in the past. You are advised to read carefully and learn from the mistakes of others which are discussed as follows:
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Malicious Software Scam
One of the most common modes of online scams is through malicious software, also referred to as ‘Malware’. Similar is the case with cryptocurrency. Given the digital and online nature of BTC, they are exposed to a greater risk of scams.
Over the years there have been malwares developed specifically to target crypto transactions. In recent times, ‘Bleeping Computer’, which is a tech support website, announced warnings about such software which target crypto transactions, especially bitcoin. The purpose of this warning was to increase public awareness against crypto scams in the market. It advised the crypto holders to be very vigilant to whom they are sending their crypto, and to do a background analysis of them before indulging in any kinds of trade with them.
There is a form of malware for hacking and stealing crypto, known as ‘Cryptocurrency Clipboard Hijackers’, which operates by tracking for virtual currency addresses and keys inside the windows clipboard. What these scammers do is, upon gaining access to the original key address from windows clipboard, they replace it with their own controlled one and thereafter gain access to the victim’s crypto and steal it.
The malware, Cryptocurrency Clipboard Hijackers is estimated to control almost up to 2.3 million BTC addresses. What these scammers do is that they swap the legit address with one they control. These addresses are responsible for conducting crypto transfer. Thereafter, what happens is that instead of going to the intended recipient, the crypto coins are redirected towards the scammers and sent to them. It is reported that this malware has been designed for several operating systems and scammers have gained billions of dollars’ worth of crypto through this scamming technique.
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Fake Bitcoin Exchanges Scam
One of the most convenient ways of scamming investors is to create a fake (but legitimate looking) branch of a renowned and well-established crypto organization such as a BTC Exchange. The scammers in the crypto market are utilizing this technique as well in order to scam the traders and investors of crypto, and steal their crypto through fraud.
One of the most infamous examples of a fake bitcoin exchange is that of a South Korean scam exchange known as BitKRX. They presented themselves as a legitimate platform for trading and exchanging crypto such as BTC. However, this exchange was not only incompetent but also a fraud. This fraudulent Korean Crypto Exchange derived its name from the real and well-known Korean Exchange ‘KRX’. These scammers deceived a lot of people and bagged billions of dollars’ worth of crypto from them through this exchange.
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Ponzi Scheme Scam
The term “Ponzi bitcoin scam” is possibly the worst term for the financial experts in the financial markets, especially in the crypto market. And in reality, it is just as worse as the term itself.
A lot of scammers have gained millions from crypto traders and investors through the Ponzi schemes using BTC. Mining Max, a South Korean Site, is a prominent example of one of those scammer Ponzi schemes. It should be known that this website was also not legitimate because of the fact that it was not registered with the United States Securities and Exchange Commission. This fraudulent website guaranteed to offer the investors and traders with a n ROI on a daily basis. What it demanded in return was a lumpsum amount of initial investment along with a given percentage of commission for the service being provided by the site, which included getting others to invest. This is a classic example of a general Ponzi Scheme. It is noted that the website demanded the investors to put in an amount of around $3,200 for Return on Investments on a daily basis for the next couple of years, along with a $200 referral commission for all the investors recruited personally by the website.
The domain of MiningMax was registered privately in the year of 2016. It consisted of a binary compensation structure. However, this fraudulent website was soon reported by people who got scammed and caused up to 14 arrests in the following year, during 2017.
A Final Word
These were a few of the most major scamming attempts which people fell victim to, worldwide. The purpose of this article is to increase your awareness about such matters and dangers so that you do not fall victim to such attempts from frauds. There are many other scams which you need to research about and be aware of in order to keep your crypto investments safe.
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