How to avoid and report bitcoin scams

Bitcoin is a new technology. Thieves and scammers exploit your lack of familiarity and understanding of bitcoin to trick you into giving the thieves your bitcoin. If someone is reaches out to you and eventually ends up asking you to send them bitcoin, they are probably scamming you. 

Here is how to figure out if you are involved in a bitcoin scam and how to protect yourself from losing your bitcoin to a scam.

Know your enemy

Scams come in many forms, but they often follow a familiar pattern. The safest approach is to be skeptical of anyone telling you to send money—especially if they ask for payment in Bitcoin or other cryptocurrencies—as it's likely an attempt to manipulate or deceive you.

Scammers will lie, pretend to be from real businesses or make up fake businesses or pretend to be a romantic partner that needs your help, but only in bitcoin, of course. Scammers often belong to large scamming businesses with dozens of employees and managers and a sophisticated and tested system to trick you into parting with your money. Below, we discuss their scamming methods and how to protect yourself.

Common types of scams to watch out for:

Investment scams

Scammers pose as legitimate companies offering massive, guaranteed and fast returns through forex trading bots or AI, luring you into sending bitcoin with the promise of profits that never materialize. These scammers will create a fake website that displays falsified trading reports, data and charts that give you the appearance of financial returns, tricking you into giving them more and more money. For example: a scammer will say you need to give them an additional $1000 for them to be able to transfer your $20,000 in returns that you’ve earned. These excuses are lies, and the $20,000 in returns don’t exist; it's a fraud and a trick to get you to part with more of your savings. Beware! 

Investment scams will also claim to help you set up a bitcoin wallet, while preying on a lack of understanding so that theycontrol the bitcoin wallet you think belongs to you. Always set up a bitcoin wallet yourself!