5 Ways To Be Scammed Out Of Your Bitcoin
The Bitcoin market has been booming with both Bitcoin and altcoins rallying significantly. However, the threatening specter of Bitcoin scams is an ever-lurking shadow in the corner of the room.
Sometimes it pays to recount past errors, learn and move forward with our crypto gains firmly in our pockets – and not in someone else’s.
Not falling for phishing attacks, social media scams, SIM swapping hacks and understanding which are safe cryptocurrency exchanges, might seem obvious to some, but it is so easy to fall for them if you’re off your guard.
In this post, we’ll give a rundown of the main ways to be scammed out of your Bitcoin.
1. Being Hoodwinked by Phishing Websites
As cryptocurrency exchanges provide increasingly robust and vigilant security protocols, scammers have had to pivot and introduce new weapons in their hacking arsenal. In 2020, their new angle was socially-engineered cyber attacks.
These attacks, both carefully planned and executed, direct people, via email, to fake websites. The goal is to trick them into unknowingly and unwittingly handing over their private details.
One to watch out for! Never click on links that are sent to your inbox by unknown third parties.
2. Twitter Scams
In 2020, the Twitter accounts of notable companies, politicians and celebrities were hacked. These hacked accounts then tweeted out messages which claimed that they would double the amount of Bitcoin that was sent to a specified addresses and send it right back.
This is called a “giveaway” scam.
Accounts hacked included Barack Obama, Joe Biden, Apple, Elon Musk, Kanye West, Bill Gates and Uber. Hackers collected over $100k of stolen funds from this particular attack.
They were able to pull off this heist by accessing Twitter’s “God Mode”. The starting point, in this hack, was a phishing attack that duped a Twitter employee to click a compromised link and hand over login credentials unwittingly.
To stay safe on Twitter it’s always a good idea to tread carefully. Never send others Bitcoin or altcoins in the hope of getting more back – you will not.
3. Getting SIM Swapped
A SIM swap is a non-technical, low-budget way for attackers to take control of a mobile phone account.
To execute the attack, a hacker needs to know how mobile phone carriers authenticate identity and some portion of information about their victim.
Often, this only requires a victim’s phone number.
Scammers can gain access to everything on your mobile phone including bank accounts, email and trading exchange accounts.
It has been argued that the majority of people in the United States, who have phone number accounts with wireless carriers, are vulnerable to SIM swaps.
If you hold Bitcoin that you don’t want to lose, this fact is a sobering reminder to check your digital security.
A simple way to overcome this risk would be to keep your Bitcoin on a hardware wallet and cease using phone-based 2FA.
4. Investing In Non-Legitimate Projects
We’ve all been there. The excitement of discovering what we believe to be the next Bitcoin or the Ethereum killer.
The information seems sound, the numbers stack up and the CEO tells us that through the swathes of partnerships the company has already secured – it’s definitely going to go parabolic.
Often these schemes have a following of kind-hearted, well-meaning supportive folk who also believe the project is on the cusp of greatness.
Sometimes these projects make it and other times they incinerate in their own hype fuel.
It always best to “do your own research” and take your time before putting hard-earned money into a project.
5. Exchange Scams
Despite their decentralized nature, most cryptocurrency is still bought and sold on exchanges.
While this makes it easier to trade coins, regulation is still underdeveloped in many countries. Many investors have been left penniless when the exchanges they use turn out to be honey traps.
In 2017, South Korean financial authorities and the local Bitcoin community exposed a large scale Bitcoin scam: a fake exchange called BitKRX.
It presented itself as part of the largest trading platform in the country and stole people’s money. Watch out!
To avoid this type of scam stick to well known and safe cryptocurrency exchanges that offer a regulated place to buy, sell and trade.
5 Ways To Be Scammed Out Of Your Bitcoin
That’s my rundown on the top ways to lose your Bitcoin through scams. It’s still a jungle out there, so stay vigilant and take as many steps to protect your digital wealth as you can. A proactive approach at keeping your Bitcoin safe is always the best line of defense.
Author: Andrew Crossland
A Bitcoiner since 2017 and a Bitcoin Maximalist since 2018, Tommy is our main writer and editor at Bitcoin Maximalist. Other than researching and writing about Bitcoin, Tommy loves spending time with his family and supporting his beloved Leeds United.