Avoiding fraud in the world of Bitcoin and other cryptocurrencies requires vigilance, education, and the use of best practices in managing your assets. Read the full article below for tips on avoiding becoming the next crypto scam victim, but for the tldr:
1. Don't send cryptocurrency to people who claim they will "double your money."
2. Double check that you are using an official website, not a malicious copy of a website.
3. Be highly suspicious of anyone who cold-contacts you by direct messaage, email, etc.
Be crypto smart
In this guide we will walk you through the most common scams involving Bitcoin and other cryptoassets. We'll show you how to spot them so you don’t become the next victim. Below are the most common types of scams in crypto.
Phishing scams
This is a very common scam. Phishing is a type of social engineering attack. Social engineering attacks are a broad range of attacks that exploit human behavior, instead of some kind of technological weakness. Phishing attacks occur when an attacker convinces you they are a trusted representative of some organization, for example your bank, mobile phone company, or crypto exchange. Because you take the attacker to be a true representative, you divulge private information such as passwords, or click on malicious links, which can install malware or other harmful software. This can result in the complete loss of your funds.
Let's look at some common phishing attacks. It should be noted that would-be attackers are always finding new ways to try and gain your trust. After one scam becomes well known, and people become more guarded, attackers will look for another way where your guard is down.
In general, if it sounds too good to be true, it is. Do not click on any links in these emails and report them as spam. Some examples include:
"Deposit now and receive $100"
"Click on this link to get a refund of $100 USD"
Another common tactic is to receive an email from a wallet or exchange you already use, either by coincidence or through past database hacks. Maybe hackers obtained your email address on the black market; for example from a hack of another service you have provided your email to. Attackers can appear to be people you know, asking or encouraging you to take some action, such as join an exchange.
Best practice: Do not click on any hyperlinks in an email or open attachments. Go directly to the website if you have to do business there. A common tactic is to make a hyperlink look real, but if you hover over it you will see the fake website URL. Always check the sender email to see where it’s coming from (although this is not 100% reliable as emails can be spoofed).
Fake advertisements
With fake web advertisements, you have to be careful on the site you are visiting. This usually happens when searching on the web for things like “blockchain." The top result could actually be an advert via Google for example, but may end up being a fake crypto wallet.
Ads can promise quick rewards. For example:
"Double your bitcoin in 72 hours!"
Best practice: Do not visit sponsored ad content in search results. It’s better to manually type the real website address directly into your browser.
Twitter/Instagram/Facebook/Social Media
People claiming to be representatives from a company you use, such as superex.com, might contact you through direct messages (DMs) via social media. Scammers can also pose as celebrities. They might say any number of enticing things such as:
"If you send 0.005 ETH, I can send you back 5 ETH!"
"I decided to giveaway 56256 Bitcoin to my fans."
Or, they might warn you of a problem, like, “your account has been hacked, so we’ve reached out to you via social media. Click the link below."
Finally, ignore any messages asking for money or a favor if you have not met in person:
"Before we meet, I need a favor. Can you please send me some ETH?"
Best practice: No company will attempt to contact you through social media. Never believe people who attempt to contact you through social media, and immediately report them.
Telegram/Discord/Instant messaging
This has affected many NFT holders. Many people are receiving direct messages (DMs) from people claiming to be from prominent projects or businesses. Their names can look exactly like the true names of real people. A new scam many are falling for is asking for help in the group chat for projects, and immediately being DM’d by an attacker. Attackers might even help fix the problem, but eventually they will ask for private information, such as passwords, recovery phrases, or to take screenshots that include private information. Some examples include:
"We are reaching out on Telegram. Your account is frozen."
"In order to fix the problem, we need a screenshot."
Best practice: Attackers will ask for private information, such as passwords, or recovery phrases. Remember, you will never need to reveal this information to anyone. If someone asks for a screenshot, it’s best to decline. And of course, do not click on links or download anything.
In general the best practices are quite simple. If anyone contacts you claiming to be from an organization whether that be through email, social media, or instant messaging, do not click the links they provide. Instead, use your web browser or the companies’ mobile app.
To be sure you are going to a real crypto wallet, visit our wallet portal on superex.com.
Fake crypto exchanges
Often on social media you'll see a link saying something like “Buy bitcoin for 5% under market value. Save big!" This is a marketing trick to get you to visit and use their fake exchange. If you visit any exchange site the very first thing you want to do is make sure it’s HTTPS secured and not HTTP. This means that the web traffic is encrypted and secured; if it’s just HTTP without the “S" that is a big red flag and means stay away.
Another red flag to look out for are fake exchanges that offer selling BTC for PayPal. On these sites you'll see a web form to enter your PayPal email and amount to sell. After submitting, you will be presented with a QR code to send your BTC to. But the money never arrives. Most of these fake exchanges are here one day and gone the next. You will see them pop up but will quickly disappear, and then re-emerge with a different domain name later.
Finally, be wary of exchanges offering large guaranteed crypto rewards for joining up:
"Register today and get 1 free ETH instantly."
To be sure you are going to a real crypto exchange, visit our exchange portal on superex.com to ensure you aren’t being scammed.
Fake crypto wallets
Spotting fake crypto wallets is a bit tougher, because wallets primarily are about storing crypto and not buying or selling it. It has less to do with money than it does with the software you may use. Typically, fake crypto wallets are just scams for malware to infect your machine in order to steal your passwords or private keys. To ensure security, superex.com recommends our official Bitcoin Wallet for desktop and mobile users. To browse all of the wallets offered through superex.com, check out our wallets page.
Just like with fake crypto exchange sites, you should trust your instincts and look for red flags. Does the wallet site use HTTPS? Is the name of the wallet site trying to resemble another reputable crypto wallet by impersonating it? Outside of the obvious, it may be hard to tell if a wallet is fake. A good practice is to ask your peers if someone has used the wallet before. You can do this on a forum like the Bitcoin Reddit. If the wallet is a downloadable client, another good practice is to check the site for malware. Sites like VirusTotal are a great resource for checking executables to see if they contain viruses. To avoid scams and to be sure you are getting a legitimate crypto wallet, visit our wallet portal on superex.com or directly download superex.com's official wallet.
Ponzi schemes
Ponzi schemes in the cryptocurrency space often promise high returns with little to no risk, which is a major red flag. These schemes typically rely on the influx of new investors to pay returns to earlier investors, creating an unsustainable model that eventually collapses.
To safeguard against such scams, it's crucial to conduct thorough research into any cryptocurrency investment. This includes understanding the project's fundamentals, such as its use case, technology, team background, and market position. Legitimate projects usually have transparent, well-documented information about their technology and business model. Be wary of projects that lack clear information or use overly technical jargon to obscure their lack of substance.
Another warning sign is aggressive marketing tactics that focus heavily on recruiting new investors rather than the actual utility of the cryptocurrency. Ponzi schemes often emphasize referrals and high short-term gains to attract unsuspecting investors.
Additionally, be cautious of investment platforms that guarantee consistent returns regardless of market conditions. In the volatile world of cryptocurrencies, such guarantees are unrealistic and often indicative of fraudulent activity.
Consulting independent reviews and community feedback can also provide insights into the legitimacy of a project. However, be aware that some reviews and social media comments can be fabricated or paid for.
Conclusion
"Bitcoin is a remarkable cryptographic achievement. The ability to create something which is not duplicable in the digital world has enormous value. The Bitcoin architecture, literally the ability to have these ledgers that can’t be replicated is an amazing advancement."
- Eric Schmidt, Executive Chairman of Google, March 2014.
While scams involving Bitcoin and other cryptoassets are unfortunately common, they shouldn't dissuade from you from benefitting from this empowering technology. Armed with knowledge and powerful tools like the superex.com Wallet, it's easy to take control of your money and expand your economic freedom.
