{"id":138353,"date":"2018-12-04T08:23:43","date_gmt":"2018-12-04T13:23:43","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=138353"},"modified":"2018-12-04T08:23:43","modified_gmt":"2018-12-04T13:23:43","slug":"bitcoin-scams-and-how-to-avoid-them","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2018\/12\/bitcoin-scams-and-how-to-avoid-them\/","title":{"rendered":"Bitcoin Scams and How to Avoid Them"},"content":{"rendered":"
December 4, 2018<\/div>
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Bitcoin has taken the world by storm, and since its introduction in 2008, it has inevitably faced several controversies. Scammers found a gold mine in the digital currency for many reasons. One of them is the fact that only a few people understand it, which makes it easier to make them believe false promises. Another reason is anonymity \u2013 cryptocurrency<\/a> gives scammers relative ease to cover their tracks. Lastly, a major reason is that it is largely unregulated<\/a>. \u00a0Bitcoin<\/a> chiefly operates outside of the conventions of a financial system; and this worries regulators as it has the potential to be linked to money laundering, tax evasion, fraud, and terrorist funding.<\/p>\n

What are the most common bitcoin scams and how do you spot them?<\/b><\/p>\n

Fake Bitcoin Exchanges<\/b>. One popular example for these would be South Korea\u2019s BitKRX, which posed to be a branch of the country\u2019s Korean Exchange (KRX) and claimed to be a platform to exchange and trade bitcoin. Ultimately, it turned out to be fraudulent. There are also those that pretend to be connected with well-known exchanges using apps or fake websites; users are scammed when they log in and their account details are given away. When you are directed to a website, make sure that the URL has \u201cHTTPS\u201d rather than just \u201cHTTP.\u201d Without the letter S, it means that the web traffic has no security and encryption.<\/p>\n

Ponzi Scams<\/b>. Someone promises an incredible return of investment using bitcoin and a lot of people buy in it. Before you know it, someone runs off with all of your money. That\u2019s basically how Ponzi schemes work. At first, victims will be made to believe that it actually works \u2013 say, the digits in their bank account are increasing. This will also make them talk about its \u201csuccess\u201d and convince others to join in. Eventually, calls to the customer service are unanswered, there are technical problems with the website, or the money will be remitted late \u2013 among several excuses while your money disappears for good. If you see ads that sound like, \u201cdouble your bitcoin overnight,\u201d they\u2019re probably scams. How it usually works is you have to send them your money first before they can double it.<\/p>\n

Pyramid Schemes<\/b>. Scammers use bitcoin as a product in pyramid scams. In these schemes, your low initial investment will be multiplied if you invite more people to sign up. After a lot of people have invested their money, the original scammer walks away with all the money.<\/p>

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Malware<\/b><\/a>. Hackers have long been using malware in order to get a hold of other people\u2019s login credentials and account details. Now, it\u2019s being used to drain Bitcoin wallets that are connected to the Internet.<\/p>\n

How do you avoid falling into these scams?<\/b><\/p>\n