This article aims to educate you about common Bitcoin scams, how to protect yourself, and what resources are available if you fall victim to a scam.

We are sharing some of our knowledge with you. Knowledge drawn from our extensive experience handling scams, fraud, and cyber-crime on a daily basis.

The 6 Most Common Scams We're Seeing

• Imposter Scams: Scammers pose as well-known investment banks, figures in the Bitcoin world or government officials to trick you into sending them bitcoin.
• Fake Bitcoin Investment Platforms: Scammers create fake “bitcoin investment” opportunities and disappear with investors’ money.
• Ponzi Schemes: Investment scams that promise high bitcoin returns but use new investors’ money to pay earlier investors.
• Malware: Software that infects your device to steal your Bitcoin wallet’s information or private keys.
• Phishing Scams: Fraudulent websites or emails that mimic legitimate Bitcoin exchanges or wallet services to steal your login credentials.
• Bitcoin Theft: Hackers directly targeting Bitcoin exchanges or individual wallets to steal funds.

The Top 8 Red Flags to Watch Out For

While it’s important to note that scammers constantly create new platforms and find new ways of tricking the public, the top 8 red flags are:

• Guaranteed Returns: Promises of guaranteed or extremely high returns with little risk is almost always a scam. Bitcoin and other investments come with inherent risks, and no legitimate investment can guarantee profits.
• Pressure Tactics: Scammers often use high-pressure tactics to rush you into making a decision. If someone is pushing you to act quickly or make an immediate investment, be cautious.
• Unsolicited Offers: Be wary of unsolicited investment offers, especially those received via email or social media. Legitimate investments are rarely pitched this way.
• Unusual Payment Methods: Requests for payment via unconventional methods, such as helping you open a Bitaroo account and buy bitcoin, all in order to pay for their alleged services or products, is a strong sign of fraud.
• Fake Endorsements or Partnerships: Scammers might fabricate partnerships with well-known companies or institutions. Verify any claims of endorsements or affiliations through independent sources.
• Coaching to Bypass Security Processes: If you are coached on how to circumvent the security measures of your bank or a reputable Bitcoin exchange, this is a clear red flag. Legitimate investments should work within established financial and security frameworks, and any advice to bypass these protections is highly suspect.
• Unverifiable Claims: Claims of extraordinary success or endorsements by celebrities that you cannot verify independently are suspicious. Scammers often use fake testimonials or endorsements to lend credibility.
• Complex or Secretive Strategies: If the investment strategy is overly complex or requires secrecy, it could be a scam. Scammers often use convoluted explanations to confuse potential victims.

Protecting Yourself from Bitcoin Scams

• Be extremely sceptical of “too good to be true” offers.
• Be very cautious with letting strangers view or control your screen remotely.
• Avoid coaching or coercion to lie in order to bypass security measures.
• Enable two-factor authentication (2FA) on all your Bitcoin-related accounts.
• Be wary of unsolicited investment opportunities or promises of guaranteed returns.
• Use reputable Bitcoin exchanges and wallet services.
• Your private keys or recovery phrases are for your eyes only.
• Use a hardware wallet for storing large amounts of bitcoin.
• Verify all addresses before sending bitcoin.

Who do Scammers Usually Target?

Individuals particularly vulnerable to Bitcoin scams often include those who are new to Bitcoin and lack a solid understanding of its intricacies.

This demographic may include older adults who are not as familiar with digital technologies, as well as younger users who may be drawn to high-risk, high-reward schemes without fully comprehending the potential dangers. Scammers frequently target these users with promises of guaranteed returns, misleading investment opportunities, or fake “get-rich-quick” schemes.

Additionally, people who are under financial stress or seeking quick solutions to their monetary problems are often more susceptible to such scams, as they may be more inclined to overlook red flags in the hope of a rapid financial turnaround.

Resources in Australia for Bitcoin Scam Victims

If you’ve fallen victim to a Bitcoin scam in Australia, these resources can help:

• Australian Cybercrime Online Reporting Network (ACORN): https://www.cyber.gov.au/acsc/report
• Scamwatch: https://www.scamwatch.gov.au/
• Scam Adviser: https://www.scamadviser.com/
• Australian Competition and Consumer Commission (ACCC): https://www.accc.gov.au/
• Australian Securities and Investments Commission (ASIC): https://asic.gov.au/
• Australian Federal Police: https://www.afp.gov.au/

Tips to Identify Unknown Bitcoin Scammers

• Perform an online search using the institution name + the word “scam”: This can reveal if others have reported scams associated with the entity.
• Reverse image search: If you’re dealing with someone claiming to be a specific person in the Bitcoin world, try a reverse image search of their profile picture.
• Check for reviews and ratings: Look for independent reviews of the Bitcoin platform or individual you’re dealing with.
• Use scam databases: Websites like BitcoinAbuse.com can provide information about potentially fraudulent Bitcoin addresses and websites.

Remember, staying informed and vigilant is your best defence against Bitcoin scams. If something seems too good to be true, it probably is. Always do your due diligence before investing or sharing any personal information.

Key Takeaways

• Be Sceptical: Always approach unsolicited Bitcoin offers, high-return promises, and urgent investment opportunities with caution.
• Protect Your Information: Never share your private keys or recovery phrases. Enable two-factor authentication on all your Bitcoin-related accounts.
• Verify Before You Trust: Double-check website URLs, social media accounts, and the legitimacy of any platform before engaging or investing.
• Stay Informed: Keep up to date with common scam techniques and regularly educate yourself about Bitcoin security.
• Use Secure Methods: Stick to reputable Bitcoin exchanges like Bitaroo and consider using a hardware wallet for storing large amounts of Bitcoin.
• Do Your Research: Before trusting an unknown entity in the Bitcoin space, use online tools and databases to verify their credibility.
• Trust Your Instincts: If the opportunity feels off or too good to be true, it’s better to err on the side of caution and walk away.

By keeping these key points in mind, you’ll be better equipped to navigate the Bitcoin world safely and protect yourself from potential scams.