Bitcoin’s and other cryptocurrencies’ popularity is not without its dark side. This is causing a huge cybercrime industry to grow, rife with scams. Unscrupulous criminals are preying upon unsuspecting Internet surfers, trying to trick them into losing Bitcoins. will be clarified the most typical cryptocurrency-related frauds in this article and offer guidance on how to use Bitcoin safely.

Ponzi schemes

You may be tempted by irresistible offers of crypto that are too good to believe. They promise that your Bitcoin will double in a short time or even more. This is a classic example of a Ponzi scheme. The chances of recovering the original Bitcoin amount are very slim.


  • Any investment that guarantees a return should be viewed with suspicion. All investments are risky, and those who promise a guaranteed profit are likely to be dishonest.
  • A clear business model is the basis of all legitimate investments. It is a warning sign if you do not understand how a particular investment generates income.
  • Recruitment of new members is a key component in Ponzi schemes. You might be involved in a Ponzi Scheme if you feel pressured to recruit more people so that you can make money. Referral programs are often included on these websites, allowing members to earn money for bringing new customers. You should be alerted if you see a link to a referral in the URL. 
  • Check with the financial regulators of your country to find out if a company has been registered, and if there have been any complaints made against it.

Cloud mining

Cloud mining is the processing of cryptocurrencies using a distant data center with pooled computing resources. Cloud mining providers, in essence, rent out their computing power and mining hardware to clients. They can then mine cryptocurrency without having to buy and maintain expensive mining gear.

Fraudsters launch many deceptive schemes, even though the concept is good and legitimate. The fraudsters lure potential investors in with high-flying promises only to deliver returns that are significantly lower than those promised if they even exist.


  • Make sure the website gives clear and transparent details about who manages and which mining pool they use. Included in this information are their mining facilities, types of hardware used, and mining capacity.
  • Check contract details. Details like the price of the contract and the amount of computing power you’ll receive should be clearly stated in a legit cloud mining contract. Be cautious if these details aren’t precise.
  • Ask for advice from a cloud mining expert or an independent advisor. 

Crypto exchanges that are bogus

Be wary of ads that promise you can sell Bitcoins for bargain prices, or with minimal transaction costs. They could be an attempt to lure you to a fake cryptocurrency exchange site. The PayPal to BTC scam is another telltale sign.

This scam is usually carried out by websites that ask for your PayPal email address and the amount of money you want to spend. A QR code is then generated to verify the transaction. The promised Bitcoins do not arrive and your PayPal account is compromised instead.


  • Do your research before using any Bitcoin exchange. You can read reviews and get opinions from users who have experience. Check the website of the exchange to find out more about it, such as how long the company has been in operation, its address, and who its members are.
  • In many countries, crypto exchanges must be registered and adhere to specific regulations. Check to see if your exchange complies with the regulations of your country.
  • Avoid clicking on links that may lead you to fake exchanges. Double-check the exchange’s URL before you log in. 

Fake wallets

It can be difficult to identify deceptive Bitcoin wallets since the primary purpose of a Bitcoin wallet is not to execute BTC Smart Contracts but to store crypto. These scams do not always aim to make money immediately. These rogue wallets may eventually steal your assets, but they often start by stealing sensitive data.


  • Download wallet software only from an official website or app store. Rogue wallets frequently pass for the real thing, but they are only available on unapproved or unreliable app marketplaces.
  • Turn on MFA to increase security. You will need to enter two forms of authentication, typically a password and a verification code.
  • Consider using a hardware-based wallet if you have large amounts of cryptocurrency. These are devices that physically store your cryptocurrency.
  • Update your device’s operating system and any security software. Included in this are the operating system of your device, any security software, and wallet software.
  • It is important to check the Bitcoin wallet for malicious code before downloading it. VirusTotal is a useful website that scans software binaries using multiple antivirus programs simultaneously. You can also check the code of an open-source wallet on platforms such as GitHub. This may require technical knowledge but can give you an insight into the wallet’s functionality and security.
  • Many crypto wallets offer a backup option, usually in the form a seed phrase. This phrase can be used to retrieve your funds in the event that you lose your wallet. This phrase should be kept safe.

The good old phishing

Phishing is a common digital scam that aims to trick people into visiting a fake website masquerading as an established and trusted service. It could appear that the malicious email is coming from an exchange or wallet you use. Cybercriminals usually gather your personal information from past data breaches and use it in their phishing email.

Searching for “Buy Bitcoin”, “Bitcoin Exchange” or “Buy Crypto” may also lead to fake Bitcoin exchanges or wallets. These sites are often found among the first search results.


  • Avoid clicking links in emails as a general rule. The link may look authentic, but the hacker will use multiple redirection methods to land you on their site. Use your bookmarks or type the URL directly into your browser to avoid this risk.
  • Be sure to also treat each email attachment with caution. Hackers use email attachments to spread malicious software.
  • Unsolicited communication should be viewed with suspicion. If you are unsure, contact the company by phone or email using the details on the legitimate website.

Crypto trading risks on the spot

Globally, as Bitcoin theft has spread beyond the digital realm, new laws and regulations governing cryptocurrency trading are being developed. These changes can be a challenge in some places for the traditional online purchasing and selling of bitcoins. The Bitcoin economy has shifted, and traders are now turning to face-to-face meetings to conduct transactions.

In-person Bitcoin exchanges can be dangerous. Several incidents have highlighted this. In India, an entrepreneur was robbed when he tried to buy BTC for a low price. He had arranged to meet the alleged sellers in a shopping mall but was ambushed and lost the $50,000 that he brought with him for the transaction.


  • Avoid meeting strangers in person for Bitcoin exchanges. This is particularly valid if you have a lot of money.
  • When in need, make transactions in public areas such as coffee shops or shopping centers. They are usually safe because they are crowded and equipped with surveillance cameras. Inform others about your location.
  • Bring a friend if you can.
  • Use peer-to-peer platforms that offer features such as blind escrow.
  • Use the reputation and feedback system to identify trustworthy traders. Clarify all trade details using encrypted chat prior to completing any transaction.
  • Before you send coins, make sure the other party has shown you the agreed amount of money.
  • You are better off missing out on a deal than risking your safety. 

Pump-and-Dump schemes

Crypto “pump and dump” schemes are a form of manipulation in which the price of crypto is artificially increased (pumped) by coordinated buying or spreading false positive news. The manipulators then sell their holdings, causing a sharp price drop. The scammers can make substantial profits, but those who invested during the pump will suffer significant losses. Due to their fraudulent nature, these schemes are illegal in many countries. The decentralized nature of cryptocurrencies and their global reach can make it difficult to stop.


  • Don’t rush into investing based on pressure or hype. Fear of missing out can cause you to make rash decisions.
  • Distribute your investments over different assets. Spreading your investments across different assets can help reduce the impact of bad investments.
  • Be wary of promises to “get rich quick”. If something sounds too good to be true, then it probably is.
  • Set Stop-Loss Orders. This will help limit losses in the event that the price of cryptocurrency suddenly drops.

Fake airdrops

Fraudsters use fake airdrops to lure unwary victims into a cryptocurrency scam. Participants are required to either provide sensitive data like private keys, and personal information or make a small fee to “unlock”. After fulfilling the requirements, victims get nothing back. Scammers take advantage of the desire to make quick money by creating the illusion that a giveaway is free.


  • Verify that the company is reputable and legitimate before accepting an airdrop. You can find announcements on their website or social media.
  • Legitimate airdrops never ask you for your private key. Your private key is the most sensitive information you have. Never give it to anyone.
  • Consider yourself on high alert if you are asked to provide excessive information about yourself. You may need to provide certain data but any requests that seem unreasonable should be viewed as a red flag.
  • If you have to send cryptocurrency in order to receive tokens, it is probably a scam. 


Cryptojacking is an example of cybercrime that hackers use to mine cryptocurrency. Infecting a computer or a website with malicious code is a common way to do this. The victim’s computer is used to mine cryptocurrency without their knowledge once they visit the compromised website or download the infected program. It can result in a degraded performance of the system, an increase in power consumption, and wear and tear on the hardware. This is an unethical and stealthy way for hackers to profit from others’ resources. It can also pose serious cybersecurity risks.


  • Use a powerful and reliable antivirus program that has features to detect and stop crypto-jacking scripts.
  • Install extensions to your browser that will prevent scripts from cryptojacking running.
  • Monitor your system performance regularly. A crypto-jacking attack could be indicated by unusually high CPU usage.
  • Update your browser, operating system, and other software regularly, since updates include security patches.

The industry is still growing despite the initial hype around cryptocurrencies.  Cryptocurrencies will be around for a long time and remain an important part of our daily lives. As a relatively young form of currency, the crypto sphere will always attract scammers. You can minimize the risks associated with trading cryptocurrencies by being aware of the most common scams.

By Tejas

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