Does the Bitcoin Exchange Have Scams? 13 Cryptocurrency Scam Tricks to Watch Out For

Is Bitcoin a scam? This question is asked many times by new investors. In fact, Bitcoin is a legitimate digital asset traded on reputable bitcoin exchanges worldwide – it is not a scam. However, it is a tool exploited by bad actors to carry out large-scale scams. From fake exchanges to three-party Ponzi schemes, millions of people have become victims due to lack of knowledge. This article will help you recognize the most common tricks and know how to protect your assets.

The Most Dangerous Bitcoin Scams Today

1. Fake Bitcoin Exchanges - Number 1 Danger

Do bitcoin exchanges scam? The answer is: yes, some exchanges are scams. As Bitcoin becomes more popular, dishonest individuals quickly set up fake bitcoin exchanges. These fake platforms are especially dangerous because they offer extremely competitive market prices, making you believe you’re getting a rare opportunity to buy bitcoin cheaply. In reality, it’s a trap to steal your money. In 2020, UK police arrested 6 people for operating a fake bitcoin exchange with a total scam amount of up to 27 million USD.

2. Free Bitcoin Giveaways - Information Gathering Tactic

On social media and websites, you often see invitations to give away free bitcoin. This is one of the most common crypto scam tricks. Scammers will ask you to send a small amount of money to “activate” the gift, or provide personal information to “verify identity.” Once they collect your data, they will use it to continue scamming you or sell it to third parties. If you encounter any “free money” offers, report them immediately to protect others.

3. Ransom Email - Threatening to Publicly Share Sensitive Videos

Ransom via email is one of the simplest yet effective bitcoin scam tricks. They send emails warning that they have hacked your computer via remote control protocol (RDP), installed recording software, and have videos of you viewing sensitive content. They threaten to distribute these videos to all your contacts unless you pay bitcoin. The truth is, scammers use stolen email lists to send out thousands of messages simultaneously, hoping someone will believe. Never pay in this situation – it’s completely a scam.

4. Impersonating Celebrities - Hijacking Social Media Accounts

Celebrities and influential figures in the Bitcoin community are favorite targets for impersonators. They create accounts that look very similar to the original, then reply to comments with invitations to “giveaway bitcoin” or request transfers. Many people have been scammed because they didn’t verify the account carefully. Always verify identities through multiple contact channels before trusting any invitation.

5. Malicious Software Changing Bitcoin Wallet Addresses

One of the most dangerous crypto scams is malicious software installed on your computer. After infiltrating, it automatically changes your Bitcoin wallet address when you copy it, causing all sent funds to go to the hacker’s wallet. Since Bitcoin transactions are irreversible, you will lose your money permanently. Be extremely cautious with applications requesting administrator rights, and always double-check wallet addresses before sending.

6. Face-to-Face Buying and Selling - Physical Safety Risks

Direct Bitcoin trading can save transaction fees, but it also carries significant risks. Scammers may impersonate reputable individuals to increase trust, then exchange fake money for your Bitcoin, or use the meeting to rob you. Instead of meeting in person, use intermediary platforms with escrow mechanisms to protect both parties.

7. Phishing Emails - Fake Password Reset Requests

Fake emails from exchanges or Bitcoin wallets requesting you to “verify your account” or “update your password” are common scams. Fake emails are often very professional, making them hard to distinguish from real ones. If suspicious, do not click any links – instead, visit the official website directly by entering the URL, or call the company to verify.

8. Fake Websites - Imitating Legitimate Platforms

Scam websites are often designed to look exactly like legitimate bitcoin exchanges or wallets. They may appear as sponsored results on Google or in mobile app stores. Their goal is to steal your login information or trick you into installing malware. Before logging in or installing any app, make sure 100% that you are on the official website.

9. Ponzi Schemes - Promising Unrealistic Returns

Ponzi schemes promise you high interest (often 50-100% per month) in exchange for depositing Bitcoin or other cryptocurrencies. This is a classic crypto scam model, where new investors’ money is used to pay interest to earlier participants. Eventually, the entire system collapses and everyone loses money. Remember, no interest rate is “too good to be true” – if it sounds like that, it’s definitely a scam.

10. Multi-Level Systems - Profits from Recruiting New Members

Multi-level systems promise profits based on the number of people you invite to join. This creates a pyramid structure, where those at the top earn a lot from those below, but most members will eventually lose money. Never invite friends or family to join these systems, and never use your own money to help them participate.

11. Pump and Dump - Selling at the Highest Price

The “pump and dump” trick involves a group (coordinating to inflate the price of a cryptocurrency), then selling all their holdings at the peak to make huge profits. After they sell, the price crashes, leaving others with worthless coins. To avoid this trap, research any cryptocurrency thoroughly before investing, and don’t believe promises that the price will “rise even higher.”

12. Ransomware - Demanding Bitcoin Ransom

Ransomware is malicious software that blocks access to your device or files, demanding payment in Bitcoin to unlock. If you encounter this, never pay the ransom – contact cybersecurity experts for assistance. To prevent, be careful when installing new software, especially those requesting admin rights.

13. Fake Altcoins - Worthless Digital Currencies

Many fake altcoins appear on the market with names containing “Bitcoin” to deceive people. These fake coins often have a flashy website and a large artificially created community to create FOMO (“fear of missing out”). Founders sell their coins at high prices, causing the price to plummet afterward. Some fake altcoins even give away free money to attract participants. Be extremely cautious and only invest in well-verified coins.

5 Golden Rules to Protect Yourself

To avoid becoming a victim of bitcoin scams, follow these basic principles:

First - High Alert: Any invitation that sounds too good to be true, with benefits but no risks – such as promising high interest or quick money without effort – is a sign of a scam. Stay alert to temptations.

Second - Verify Information: Always seek information from multiple trusted sources before making investment decisions. Check licenses, community comments, and activity history of bitcoin exchanges to identify scams.

Third - Use Security Software: Use reputable antivirus and anti-spyware software from major companies, and keep them updated regularly. While not foolproof, they significantly reduce risks.

Fourth - Don’t Trade with Strangers: Scammers may spend a lot of time building trust, but they never reveal their true identity. Always trade on reputable, well-established bitcoin exchanges.

Fifth - Choose Legal Platforms: Only use officially registered bitcoin exchanges that comply with local laws and have licenses. Gate.io, Binance, Kraken are reputable exchanges with long-standing histories.

The Largest Bitcoin Scams in the World

PlusToken - $2 Billion Ponzi Scheme

In 2019, Chinese police uncovered and arrested 6 operators of the PlusToken bitcoin exchange. This was a massive Ponzi scam with at least $2 billion stolen. The masterminds organized hundreds of events, advertised on social media, and lured thousands to deposit money with promises of multiple times returns, much higher than bank savings. After accumulating enough funds, the platform shut down without returning any money. Even authorities took a long time to track down and arrest key suspects.

USI-Tech - Over $100 Million Lost

USI-Tech was founded in Dubai, operated in the US, but run by four individuals (two of whom are British living in Australia). The company used a combination of Ponzi and multi-level marketing to attract investors. They promised returns several dozen times higher in just a few months, using videos of luxurious lifestyles on social media to build trust. The scam spread widely, prompting warnings from securities agencies in the US, Canada, Australia, Spain, New Zealand. Even after being exposed, the company changed names to Eyeline and WealthBoss to continue operating. Tens of millions of USD were lost, and victims remain ashamed of being scammed.

iFan and Pincoin - 32,000 Victims in Vietnam

In 2018, the iFan and Pincoin scams shocked Vietnam, leaving 32,000 people broke, with a total of 15 trillion VND stolen. Both projects were founded by 7 Vietnamese individuals, but iFan claimed to be Singaporean, and Pincoin claimed to be Indian to increase credibility. iFan promised minimum 48% monthly profit, with a 4-month return, plus an 8% commission for recruiting new members. This was a typical Ponzi + multi-level scheme. Thousands of families lost their homes, but due to lack of legal awareness, most victims have yet to recover their money.

Conclusion

Bitcoin is not a scam, but it can become a tool for scams if you are not cautious. Do bitcoin exchanges scam? Yes – but many reputable ones exist. The key is knowledge and high vigilance.

All investment assets carry risks. To buy and sell Bitcoin safely, you need to be well-informed, cautious, and never believe promises of extremely high profits without risks. The world’s biggest Bitcoin scams have shown that anyone can become a victim without proper alertness.

Apply the 5 golden principles, thoroughly research common tricks, and always remember there are many ways to verify information before any transaction. A cautious mindset and good information-seeking skills are your best weapons in today’s crypto investment world. Stay safe when trading and aim for deserved profits.