20 Bitcoin Scams: How To Spot And Avoid Them (2024)

We know. You might feel uneasy using Bitcoin because you don’t want to lose all your money to some asshole scammer. Bitcoin Scams are one of the biggest reasons why a lot of people are uncomfortable with cryptocurrencies.

But refusing to use the best money in human history because you’re scared means the scammers win. So instead, we want to help you learn about Bitcoin scams so you can grow strong and confident buying, using and securing your bitcoins.

It’s also especially important now that it looks like Bitcoin is entering into another massive bull market. With every price rise, it’s more likely you’ll start seeing all the same old scams popping up in your Twitter feed, your emails, Discord and more. So we thought we’d get everyone up to speed and prepared as best we can.

But before we address this main topic a quick note: Bitcoin and Cryptocurrencies are not the same thing. Bitcoin is indeed a cryptocurrency, but when most people refer to “crypto” they are referring to the tens of thousands of other cryptocurrencies out there that aren’t Bitcoin. Things like Ethereum, Solana or Dogecoin.

There is a substantial differences between what Bitcoin is, how it’s governed, its network and what it’s used for and all these other cryptocurrencies. For more detail on this, check out our piece What’s The Difference Between Bitcoin And Cryptocurrency?

It’s because of these differences that all other cryptocurrencies are alternative coins or altcoins. It’s also usually the case that scammers target and use cryptocurrencies that aren’t Bitcoin. As such, one of the quickest, best ways to avoid scams is to never touch other cryptocurrencies. It’s not fool proof (there are Bitcoin scams too), but it eliminates a lot of scams and one of the most common ways people lose their bitcoin.

How To Avoid Cryptocurrency Scams

Besides avoiding altcoins, the number one, absolute, most important thing to remember. The one thing you MUST remember even if you don’t read anything else on this page is this:

Never tell anyone your private keys or seed phrase. Never. Not under ANY circumstances. Ever. Giving someone your private keys / seed phrase is exactly like handing that person ALL your crypto. They will steal it literally within seconds and you will NEVER get it back. Ever. You’ve been warned!

While you might think that there’s something special about Bitcoin or other cryptocurrency scams, in actual fact they’re just the same type of older scams. Why reinvent scams that already work when you can just put a “crypto spin” on them? As these scams are basically just the same as ones that have been around for a long time the same general rules to avoid them apply.

We outline in detail below many of the most popular Bitcoin scams that happen today, but for a brief summary of how to avoid them:

• Never enter your private keys or seed phrase into anything digital, even if it’s just for you. Don’t take a photo of it, don’t enter it into a computer / phone, don’t print it, don’t copy it with a printer / copier, don’t store it in digital form of any kind or store it in the cloud. Keep it only on a piece of paper (or steel plate), in your dedicated hardware wallet and nothing else
• Never invest in anything that you don’t understand
• Never engage with things that have high pressure, time limited offers. Take your time
• Never engage with scammers, phishing emails or anyone that contacts you out of the blue. It doesn’t matter if they’re from the government or bank or famous or the police or IRS just ignore the SMS, email or message and if you’re really worried, contact that agency via their public contact details found via a separate Google search
• Never engage with things that guarantee future earnings or lots of money
• Never engage with famous people, they will never contact you trust us
• Many scams happen via online dating apps or websites, never give anyone you haven’t met in real life your money (crypto or otherwise)
• Never accept “free” money or crypto, this is used to steal your tokens or NFTs
• Never engage with agents offering amazing job listings that you need to apply for
• Never engage with scammers trying to extort you, report them immediately to the police
• Try to install as little software as you possibly can and only from major platform App stores. The more software you install, the more security holes you open and the higher risk there is of installing a malicious one that will steal all your funds
• Never send any funds to another external wallet for “verification” or “fixing” your account
• Use long, complex passwords and app based 2 Factor Authentication (2FA)
• Double check URLs, domain names, email addresses, social media handles etc. If you’re really unsure simply Google the company and use the ones they provide on their website

When we say “never engage” we mean it. Don’t ever respond to or answer calls or messages from scammers even if you want to tell them to stop. Interacting just tells them that you’re real and that they just need to try again in a different way.

Beyond these basic rules you should also be on the look out for the below things in general. While we can’t cover every known scam, these general guides should help keep you alert to the types of ways scammers can get into your head.

Fully Understand Any Investment: Whether it’s a legal contract with terms and conditions for a house you’re buying or the White Paper for a new ICO, read it in depth before committing any funds. This is especially important when you’re learning How To Invest In Bitcoins. There should be clear and easily understandable information that tells you how the asset works, its current state and what is expected for the future.

Scam white papers usually have completely missing, incomplete or factually wrong information that doesn’t add up. Others try and obscure this deficiency by making things confusing and “technical” to try and bamboozle potential investors.

Thou shalt not invest in anything thou doesn’t fully understand

Information vs Marketing: All flash, no substance. We’ve all heard the term but with scams it’s almost entirely true. Real investments, projects or cryptocurrencies will have real, tangible benefits, results, code or other things. Scams mostly just have marketing (and excessive amounts of it at that). If you see a high skew towards more money being spent on marketing rather than the project or investment itself then it can indicate a scam

Remove Emotions: The more emotional you are about your money, the more susceptible you become to manipulation. The quickest way to a sale is through your emotions and salesmen and scammers alike know this. Getting people excited that they’ll make quick gains, get rich quick or be able to buy lambos and live the high life is always a popular way to get you hyped up, emotional and thinking less about legitimate things like whether the numbers actually line up or even exist. Usually the final step to this process is getting you to commit some funds or sign a contract (whether it’s for crypto or a new car).

Be not swayed by the fantastic plans of impractical men who think they see ways to force your gold to make earnings unusually large. Such plans are the creations of dreamers unskilled in the safe and dependable laws of trade.

The Richest Man in Babylon

Be Careful Of “Limited Time” Offers: One of the best ways to force someone to make a mistake or do something silly they otherwise wouldn’t do is to rush them. If there are countdown timers, high pressure sales tactics, limited time offers or other things that are limiting the time you get to make a well informed decision alarm bells should be going off in your head. Stop and back away slowly.

Promised Returns: Past performance is no guarantee of future results. We’ve all heard this and know in our hearts it’s true, but sometimes emotions again can get the best of us and we truly believe that their “guaranteed returns” are certain. In fact we could all just get together and have a huge party celebrating how rich we’ll be one day, but it doesn’t make for good investing.

No one knows the future, so if anyone – in crypto or otherwise – is promising you guaranteed returns or riches it’s highly likely you’re looking at a scam.

That’s a long list we know and there are a lot of different scams that can get you too. A great way to help remember the above precautions is to read and better understand the scams themselves. It’s much easier to avoid a scam if you know how it works as this helps trigger alarm bells in your head when you see it in real life.

Common Cryptocurrency Scams

The list of scams, schemes and tricks criminals have invented over the centuries is extensive. From pretending to be a companies CEO to blasting the internet with millions of unsolicited emails it’s an eternal fight.

While we can’t possibly cover all types of scams, we’ll today focus mainly on the ones that seem to be the most popular in the Bitcoin and Crypto spaces. Many of these are simply ancient scams that have been “updated” to work with crypto terminology. Regardless, you can’t avoid what you don’t know about so the first step to avoiding Bitcoin scams is to get familiar with some common ones.

Ponzi Schemes

A Ponzi scheme is a scam that involves paying older investors with the money from new ones that have been brought in. The scam brings in more and more new investors until the new investors run out and everything collapses. This is an old type of scam dating back to the 19th century that has just been repurposed to “crypto”. You can find many examples here.

SIM-Swap Scams

SIM-swap scams aren’t new to crypto and can be extremely dangerous to everything from your coins to your identity. This attack usually occurs with the scammer – through a variety of tricks – getting access to your SIM card and thus being able to receive or send SMS and phone calls with your number.

From there they can receive “SMS verification codes” for logging into or resetting accounts or even call a business and impersonate you to gain access or reset the login credentials of your accounts. Once they have access to your accounts, they can lock you out and steal your bitcoins.

It should be noted that they will only be able to access your bitcoins if they are held on a third party exchange like Coinbase. If you custody your own Bitcoin Wallet, then having your SIM card won’t give them any access.

Social Engineering Scams

These use a variety of tricks to manipulate or deceive the users in order to gain control of your accounts. For example the scammers might pose as any number of trusted entities like the government, the crypto exchange, a bank or even a friend or CEO using AI Voice Deepfake technology.

When it comes to crypto, its usually targeted towards getting your seed phrase or some credentials that allows them to access your online exchange account. From there they steal your coins.

Blackmail And Extortion Scams

One particular nasty off shoot of a social engineering scam is sending blackmail emails. Sometimes the scammers will have legitimate information on the victim like nudes or browser history that they use to extort money by threatening to “expose them”. Other times they will simply claim they have such information.

In order to stop the scammers from telling loved ones, posting the information online or sometimes even sharing it on the victims own social networks that they’ve hacked the scammer demands a cryptocurrency payment. This type of scheme is extortion and is taken very seriously by law enforcement agencies.

Romance Scams

We’re often much more likely to send money or give access to someone if we trust them. When it comes to romance and relationships trust is a big part of things, so it’s no surprise scammers use this to get to your coins.

Often over a long period of time trust is built up with the victim, usually found on a dating website. Once it’s at a sufficient level they will request money for “help” or just use the personal information you’ve provided to gain access to various platforms or services.

Pig Butchering Scams

Similar to Romance Scams described above, this version instead uses the trust that’s built up to encourage the victim to “invest” in crypto. When they then seek help from the scammers as to how to do this they’re directed to fraudulent exchanges, websites or investment opportunities. Once they’ve invested as much as they can the scammers and often the online platform disappear.

Upgrade Scams

You want to be safe don’t you? Well then you should always make sure your software is up to date with the latest security patches. That’s all good and fine… but scammers can leverage this need to insert malware or exfiltrate information from users that they might not normally give out.

This can take a number of different forms from scammers inserting malware into the “download” area on legitimate websites, to them piggybacking on major platform upgrades such as the Ethereum merge that happened a few years ago.

Employment Scam

These are a variant of the Advance-Fee Scam with the crypto part being an additional variant! Usually scammers target those that have posted resumes and send them fake (crypto) job offers. In order to get the job though, the victim has to pay some usually small fees for things like training, work permits and so on.

Cryptojacking

This crime is actually one that you might get involved in without even being aware of it. That’s because cryptojacking involves a hacker gaining access to your computer and mining cryptocurrencies on their behalf. There are a lot of paths this can take including having the mining being done via:

• Malware
• Infected apps
• Email attachments
• Malicious online ads
• Phishing links that you click

Usually this can been detected by the user quite easily as the computer will be “working hard” or draining its battery very quickly even when you’re not actually doing anything on it.

Pump And Dump Schemes

Another ancient old scam (and form of securities fraud) repurposed for the crypto era, Pump And Dump schemes involve specific coins or tokens being “pumped” or hyped up by criminals. These criminals usually have large holdings of the things they’re talking up and then “dump” these holdings at or near the peak only to leave everyone else with a worthless token.

Fake Apps Scams

Whether it’s through the Apple App Store, Google Play Store, Microsoft Store or just random online websites, fake and malicious apps aren’t anything new. In the crypto world though they can not only steal your information but also bitcoins. The most common type of this scam is to replicate well know, large crypto wallets or exchanges.

Fake Celebrity Endorsements

Faking a celebrity on various platforms (particularly Twitter) is a hugely common crypto scam. Whether it’s famous crypto people like Vitalik Buterin or just general celebrities like Elon Musk the bots are many and legion.

Usually they are just the starting point to one of the other types of scams, sending you down a rabbit hole of fake sites, fake tokens or something else. Another popular version is when they are combined with giveaway scams.

Giveaway Scams

These are quite easy to spot as they always promise that they’ll match or multiply whatever cryptocurrency you send to them. For example they might say “send us 0.1 BTC and we’ll send 0.2 BTC back!”. They also usually pretend to come from well known companies or famous people and impose strict time limits to try and get you to act without thinking first.

Phishing Scams

Just like with any other industry phishing is among the most common type of scam in the crypto industry. Usually this comes in the form of an email or message that gets you to click on a link of some sort.

This then takes you to a compromised website or somewhere that is a fake front for an otherwise legitimate business such as a cryptocurrency exchange. They also usually have a particular focus on getting you to enter your private keys or seed phrase so they can quickly and easily steal all your funds.

Telegram Scam

While Telegram (like any other messaging platform) can be used to do any of the other scams we’ve discussed so far, it’s more prominent in crypto than others. It’s also often used by scammers to pretend that they’re from trusted parties like an exchange who’s “chatting” with you to help you recover your account or give help.

This is a type of Social Engineering Scam which we’ve covered above, but it’s especially prevalent on Telegram within the crypto community.

Fake Cryptocurrency Exchanges

While we never recommend using any KYC exchange that takes custody of your funds (previously covered in A Beginners Guide To Bitcoin Privacy) as it means handing over the custody of your bitcoins to a trusted third party, with this scheme you’re not even trusting a real company! Through various tricks they will try and get you to sign up to a fake exchange, stealing anything you send to it likely along with your identity too.

Investment Scams

Another popular crypto scam is to simply promise ridiculously high investment returns that simply never come to fruition. Whether it’s through super high “yields” or just guaranteeing that some random altcoin will “moon” (go up quickly to the moon) it all ends up the same with the victim being parted with their hard earned money.

ICOs And NFTs

Initial Coin Offerings (ICO) is a crypto take on the IPO which is used for launching new shares of a company on the stock exchange. In this case they’re launching new “coins” or tokens for a cryptocurrency. While this was popular back in 2017 it’s not as prominent today. That being said there are still scams that create entirely fake websites and tokens for the ICO.

Non-Fungible Tokens (NFT) offer a similar risk in that you have complete strangers minting new tokens that they then sell to unsuspecting investors. As it’s the wild west out there they can often promise amazing returns or features that just don’t exist. Other legitimate ICO or NFT projects often fail or just aren’t delivered as promised resulting is heavy losses.

Rug Pulls

A rug pull (having the rug pulled out from under you) happens when a crypto project that has raised funds via investors is just stopped and the main members disappear with all the funds.

Cloud Mining Scams

Mining cryptocurrencies in the cloud is absolutely a legitimate business and does indeed exist. However scammers use this new business to trick people into sending them money for upfront capital down payments. These payments are supposed to “secure” Hash Rate and the Bitcoin Mining rewards that come from it. At least until the scammers completely disappear.

How To Spot Cryptocurrency Scams

Hopefully after all those descriptions you should be well prepared to recognize cryptocurrency and Bitcoin scams. Reading about them helps. Reading about them multiple times also helps too. It’s a lot to remember though so let’s just summarize how to spot Bitcoin scams:

• Offers that guarantee large future gains
• Offers that involve “free” money, bitcoins or tokens
• Offers with time limited offers or countdown timers on them
• Messages that offer you jobs or opportunities out of the blue
• Deals that are too good to be true, no one gives out free money
• Complex investments that are technical to the point of confusion
• Messages asking you to click on links or login via a different website
• Offers or messages from famous people like exchange CEOs or celebrities
• Instructions to send funds to external wallets for “verification” or to “fix” your account
• Websites, emails or messages that aren’t secure (HTTPS), have different domain names, signatures or logos
• Requests for personal information such as your seed phrases, private keys, banking or credit card details or date of birth even if they come from apparently reputable sources like a bank, tax agency, police or exchange you use

If you want to further enhance your security (highly recommended!) we have multiple guides available such as our Beginners Bitcoin Security and our Advanced Bitcoin Security. These will help you at different stages of your Bitcoin journey and ensure you stay safe and secure for decades.

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