Bitcoin Scam Awareness: Educating Investors to Stay Protected


Many have fallen victim to various online scams since the internet connection became available to the general public. Although these scams were still in their infancy, they have propelled them to great heights in today’s digital world. As the world slowly embraces cryptocurrencies, scammers are taking advantage of the loopholes to rip off their victims.

Undoubtedly, cryptocurrency is the future, and everyone knows it, even scammers. Scammers will scam their victims through online social media platforms and messaging apps. It is the lack of awareness that is the real cause of many falling victims.

As per recent studies, more than 70,000 US citizens have fallen victim to various crypto scams, totaling a whopping $1.3 billion since the start of 2023 alone.

In this article, we will mention a few prominent crypto scams that will help you spot them should you encounter them in the future.

Investment or Business scams

Scammers will lure in their victims by giving them the false assurance of making quick money in less time with minimum risk. Everyone appreciates a good amount of money, and if the money is working for you, you won’t hesitate to invest in it.

Although most Bitcoin scams are either pyramid schemes or Ponzi schemes, where the old investors receive money from the investments made by the new investors, the scam continues until the well of new investors dries up.

The only difference between a pyramid scheme and a Ponzi scheme is that in the former, there is a commission for the old investors as they recommend new investors, with scammers always at the apex of the pyramid.

However, scammers are creative; they invent new techniques to rip off their victims. In 2022, a pair of Estonian nationals, Sergei Potapenko and Ivan Turogin pulled off a $575 million scam.

From 2015 to 2019, the duo offered their customers around half a billion dollars worth of HashFlare cryptocurrency mining operations contracts. They also promised their victims dividends by investing in a virtual bank, Polybius, that the duo had set up.

They had created shell companies to launder dirty money and had bought at least 75 properties and luxury cars with it.

Romance scam

Most romance scams are pulled off on dating apps, but what is more painful for the victims is that they suffer from not only heartache and mental stress but also from financial security.

In a romance scam, scammers become the puppeteers and their victims the puppets. They have such a hold on their victims that they do not realize that they are being scammed. In the name of ‘love,’ these scammers frequently ask for money in the form of fiat or the latest Bitcoins.

Although it is quite difficult to recover cryptos once they are lost to scammers, on rare occasions, some might even recover them.

Jonelle Still, a French nationalist, was lured into a romance scam by a Chinese woman on Tinder, a dating app. It is thought that the alleged scammer was not working alone but with a group of individuals that led Mr. Still into ‘pig butchering.’

Pig butchering is a term that is used in romance scams where the victim is ‘fattened up’ with compliments before scamming the individual for good and, in most instances, running away.

Mr. Still was lured into a romance scam by initiating romantic talks, and then he started to state the advantages of investing in Bitcoins. He was so mesmerized by the scammer’s talk that he eventually handed his Bitcoins to her.

Mr. Still wanted to remain anonymous, as he is one of those victims who is embarrassed by the fact that they were swindled through a romance scam.

On a lighter note, Mr. Still managed to recover almost $40,000 worth of Bitcoin from the Chinese swindlers after approaching a professional fund recovery agency.

Charity and Donation scams

It is a human tendency to help those who are in dire straits. Nobody wants to see others suffer, so those with enough financial resources will come rushing in and aid those in need.

Unfortunately, scammers are also there to take advantage of those with financial resources and lure them into charity or donation scams. Scammers commit a lot of this type of fraud under the pretense of helping individuals in need.

Scammers will usually swindle them when there is a natural or artificial calamity and the globe unites to provide necessary help in disaster-stricken areas.

One of the latest examples is the Russian invasion of Ukraine, where the Ukrainian government requested financial aid to purchase military hardware to stop the conquest of Russian war machines.

The Ukrainian government requested help from advanced economies through cryptocurrency. They set up a crowdfunding site where citizens from advanced countries could donate through cryptocurrencies.

The plan was a success, and many came to their aid. However, this progress did not go unnoticed by Bitcoin scammers, who saw an opportunity to get free cryptos through donations.

Many scammers set up fake websites and call centers that were ready to accept “crypto donations’ from citizens across the world.

However, after the Ukrainian government realized this mischief, it initiated a crackdown on these scammers. Since the investigation is still underway, it is unclear how much Bitcoin and other cryptos were stolen by these scammers.

As scammers globally exploited the Russia-Ukraine conflict, estimating the exact figures lost to scammers is still unclear. However, some experts believe that it must be in the billions.

Final thoughts

Scammers are opportunist lowlifes; they specialize in hunting and scamming those with good intentions. Our digital world has become one big village; however, our laws differ from land to land. Scammers know this, and thus it becomes almost impossible to track them.

Scammers also know that, at the most, they will lose the ‘booty’ they swindled from their victims and will not face incarceration for the crimes they committed.

The fact that there are no stringent laws against scammers and recovering financial digital funds makes it difficult for those who have fallen victim to such scams to recover them.




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