TIPS: Watch out for these Bitcoin scams
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CAPE TOWN - In a recent finding by Bitcoin.com News, $1.36 billion worth of cryptocurrencies have been stolen by fraudsters during the first two months of 2018.
At the beginning of March, Investors in South Africa fell victims to the BTC Global scam‚ a company which asked investors to send their cryptocurrency to an online wallet address.
Investigators believe that a company called BTC Global duped more than 26 000 South Africans into buying Bitcoin and got them to hand over their cryptocurrency to invest in return for dividends of 14% a week.
Here a few scams that you should watch out for:
Celebrities giving away Bitcoin on social media
Fraudsters will pretend to be famous people offering digital money on social platforms such as Twitter but actually stealing it from anybody who replies.
A scam such as this was found using Elon Musk name, targeting his fans.
They appear to be sent by the celebrity himself but are actually being done by a fake account – usually one using a handle like e1onmusk, which at first glance looks like Mr Musk's real handle.
Fake Initial Coin Offerings (ICOs)
Fake ICOs invite investors to get in on a newly created coin that’s going to take off and be the next big thing.
These can be tricky because sometimes the creators themselves might not even know that they’re peddling junk.
Avoid ICO scams by knowing exactly what you’re getting into each time.
You need to decide for yourself whether a new coin has the potential to take off and whether the developers know what they’re doing. If you don’t have the know-how to make a judgment, you should probably avoid all ICOs.
. Most people know very little about cryptocurrencies, other than that it’s making millionaires. So the root of a Ponzi scheme is making empty promises, selling people a fake dream.
How it works:
1. Someone offers an investment scheme that promises an incredible return on your investment thanks to the magic of bitcoin.
2. A lot of people invest in it, and then someone runs off with all their money.
3. At first, it might look as though it actually works. The numbers in your account might be increasing as promised.
4. But when you actually try to get those funds back, you might find that the “customer service” isn’t very responsive, or that there are technical issues, or that the money will be returned soon or a number of other excuses.
5. Then one day the company simply disappears and the money is never seen again.
Criminals will request payments in bitcoin or even more private coins when they get a hold of any personal data on your computer.
For example, The WannaCry ransomware attack launched in July 2017 and infected computers across the globe.
Files were encrypted and hackers would only give them back in exchange for bitcoin payments. The amounts victims were charged were reportedly hundreds of dollars at a time, and hackers were thought to have walked away with more than $140,000 worth of bitcoin.
A wallet is used on blockchain for storing your valuable cryptocurrencies. However, they too can be fake and pose a threat.
Best way to spot a fake wallet is to ask around on social media and other chatting platforms for other people’s experience with a specific wallet.
Additionally, you should install a proper anti-virus security on your PC or laptop that could pick up potential malware.
Linum Labs, a blockchain production studio with a focus on blockchain training gives a few safety tips for when trading bitcoin.
Please note that none of the tips stated below is to be considered as financial advice.
Here are 10 safety tips for when trading Bitcoin:
1. Don’t keep all your funds in an exchange - store funds in a wallet application. A hardware wallet (offline wallet) is seen as one of the safest options for storing funds.
2. Have multiple wallets. It’s safer to have multiple wallets if one is compromised.
3. Enable two-factor authentication or encrypt your wallet so that a password is set for anyone trying to withdraw any funds
4. Only download your wallet from verified app stores or directly from their website.
5. Backup your wallet keys and store your password somewhere safe (write it down).
6. In order to protect your privacy, never share your private keys with anyone else. Sharing your private wallet key is like the equivalent of sharing your bank PIN.
7. Keep track of industry news and do your research on a reputable exchange.
9. Be alert and aware of scammers and phishing scams.
10. Be in control of your private keys (When you use exchanges, they are in control of your private key).
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