Unless you have been living under a rock, you probably already know what cryptocurrency and in particular Bitcoin is. Simply put, it is the most popular and best known currency generated by computers. When it was introduced in 200, it was worth nothing, but it recently peaked at close to $20,000 per coin. This appreciation in value brought with it a new crop of scammers and cons prowling the internet for gullible beginners.
Last year alone, over 1,200 people filed complaints with the Australian Competition & Consumer Commission or ACCC, a body responsible for handling and resolving consumer complaints about trade and cryptocurrency. The reports filed showed that these individuals lost Bitcoins worth as much as $1.5 million in 2017.
Governments and financial regulation bodies around the world have issued warnings over the past year regarding the many cryptocurrency scams – and in particular Bitcoin scams – warning its citizens to be on the lookout for fake products, scams, and schemes designed to take their money.
Common Bitcoins Scams
Managing and busting scams on the internet has been very difficult largely because Bitcoin is an unregulated currency that does not require a third-party to complete. This means that scammers have easy targets with very little avenues for recourse when transactions turn out not to be what the scammers promise.
Here are four main typical Bitcoin scams that everyone should learn to recognize and avoid:
1. Bitcoin Investment Scams:
If an investment opportunity appears too good to be true, there is a high chance that it is a scam. There are Bitcoin scammers who promise higher yields on user deposits over a short time hoping that the target’s greed will sway his decision.
2. Bitcoin Mining Scams:
There are legitimate mining opportunities for cryptocurrency enthusiasts, but most cloud mining opportunities advertised are scams. Before investing in a cryptocurrency mining opportunity, understand how it works and research on its legitimacy before signing up for it.
3. Bitcoin Wallet Scams:
Pickpockets are no longer operating from crowded streets – they are online. A Bitcoin wallet scam basically involves a third-party, often a company claiming to be established in the cryptocurrency industry, convincing unsuspecting investors to sign up for online wallets and keep their Bitcoins in them.
4. Bitcoin Exchange Scams:
The Bitcoin exchange scam typically targets new entrants into the crypto world. Since an exchange is a point of entry into the Cryptocurrency universe, many scammers attract new victims by offering low exchange rates, zero transaction costs, and promises of anonymity. In truth, all they want is to take off with the customer deposits.
What Is Being Done About Australian's ACCC Bitcoin Scam Complaints?
Financial regulators such as the Australia Financial Intelligence Agency (AUSTRAC) and the Australian Securities and Investment Commission (ASIC) are working hard to find ways to resolve cases of customers being scammed and swindled. However, for now, it is important that you take steps to protect yourself from the most common Bitcoin scams.