Cryptocurrency Scams: UPDATED 2018!!!


As a p2p digital cash system, bitcoin has some unique features which make it particularly attractive to scammers. The irreversibility and pseudo-anonymity of transactions are particularly inciting to nefarious actors. The technology is still very new. So regulation, consumer protection, best business practice, and supervisory bodies are sorely lacking. With that in mind, it is important to learn how to protect oneself against scam artists.

The research

Research indicates that scams using bitcoin have resulted in excess of US$11m in gains for scammers, over the last four years. These scams have claimed approximately 13,000 victims.

In the interests of assisting our valued clients, we offer the following article detailing some best practice for avoiding Bitcoin scams.

Bitcoin Scam

SCAM 13Before handing over your Bitcoins to any counter-party, a good place to start is The site provides a Bitcoin ‘bad list‘; a list of known scam sites and bad actors. The list is fairly comprehensive and kept as up to date as possible. At this point, even if a site is not on the list, it pays to ask yourself necessary questions: is the deal or opportunity is too good to be true. If the answer is yes, then it is recommended to stay away.


Bitcoin Ponzi

Beware of bitcoin Ponzi schemes that promise you incredible returns, if it sounds too good to be true, it usually is…. Any “investment” or “system” offering you double or more than the bank interest rate is a SCAM. DO NOT SEND THEM YOUR BITCOINS. EVEN SYSTEMS WHERE MEMBERS HOLD THE FUNDS ARE RIGGED WITH PSEUDO MEMBERS WHO CONVERT THE BITCOINS BACK INTO CASH AND YOU WILL NEVER SEE OR HEAR FROM THEM AGAIN.

It is a good idea to do some background checks and due diligence on the company. This does not necessarily have to be a long or expensive process. Comprehensive due diligence will usually involve the assistance of a legal expert. If you cannot afford that, then check to make sure the company publicly discloses the identities of its operators and is registered to operate. A WHOIS search can be useful in this regard. Checking forums like Bitcointalk and Reddit can also be useful.


Finally, where possible, engage with the operators. Meet them in person if that is achievable. Discuss your concerns and ask questions.
And remember, if there is any doubt at all, don’t give them your Bitcoins. Bitcoins, in this regard, are like cash. They are irreversible and the same care should be take as dealing with cash.

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