Shield Yourself Against Fraudsters and Scams
Learning

4 mins

6 months ago

Mathieu Bussière
Mathieu Bussière

COO

Shield Yourself Against Fraudsters and Scams

Bitcoin has gained a lot of popularity in recent years, but unfortunately, so have the number of scams associated with it. With the surge in value and interest in Bitcoin, scammers are coming up with increasingly clever schemes to take advantage of the newcomers. Whether it's a fake exchange, fraudulent automated yield generator, or phishing scam, there are many ways that scammers can take your money and leave you with nothing. In this blog post, we'll go over some tips to help you avoid falling victim to frauds and scams. By following these simple steps, you can protect yourself and your investments from fraudulent activities that involve bitcoin as a means of transferring your hard earned money to those who want to steal it from you.

Although this blog post is geared towards those who are new to Bitcoin, it can be a useful tool for anyone seeking to safeguard themselves or their loved ones from fraudulent activities and online swindles. Even experienced Bitcoin enthusiasts are not immune to such risks, and it's critical to remain vigilant and informed about the latest tactics employed by scammers. By adhering to the recommendations and approaches described in this post, you can not only shield yourself from dishonest schemes, but also help your family and friends avoid falling into traps.

Scheme #1: The Fake Online Trading Platform

In this scheme, sophisticated scammers are creating fake online trading platforms and luring unsuspecting victims with promises of dedicated traders or trading bots that will generate impressive profits for them. These scammers are highly dedicated and will go to great lengths to steal your wealth, spending countless hours over the phone or online to make you believe they are working hard in your interest. However, once you have made your initial deposit, you will never be able to withdraw any of your profits or your original deposit. In some cases, they may allow you to withdraw a small amount, but as soon as you attempt to withdraw a larger amount, they will ask you to send them more money to "accelerate the withdrawal process". They could also ask you to send money in order to cover the capital gains tax of your profits, and provide you with all sorts of excuses. It is essential to be vigilant and do your research to avoid falling victim to these types of scams.

In many of these fraudulent schemes, the scammers will attempt to have you install software on your computer that allows them to take control of it. They may use this control to open accounts at bitcoin exchanges such as Bull Bitcoin or even gain access to your banking information. They often use remote access software like AnyDesk or TeamViewer to make it appear as if you are the one making the transactions, even though they are using your computer and IP address. These tactics can be incredibly sophisticated and convincing, making it all the more important to thoroughly research any trading platform or investment opportunity before committing your money.  

To check if a trading platform is licensed in Canada, you can use the Fintrac website.  Fintrac is the organization that regulates all Canadian money service businesses.  When an entity is registered with Fintrac, it means that it must observe and apply strict rules that are difficult or impossible for non-legitimate platforms to follow.

Another good practice to guard yourself against fraud is to use search engines to check if the platform has been reported as suspicious or fraudulent.  Often, when people have been scammed by a platform, they will write a post in social media such as reddit telling their story and to prevent others from suffering the same fate as them.

Scheme #2: The Celebrity Investment Opportunity

There are countless fake social media accounts created every day by scammers who make those accounts look like they are genuine celebrity accounts.  They then use those accounts to promote sketchy investments that will require you to buy and send bitcoins in order to invest in the, let’s say, next Elon Musk mega venture.

The people behind those scams will go as far as paying costly online ad campaigns targeted at specific groups that they consider more vulnerable to fall into their trap. They then reel their victims into signing up on a website that looks legitimate, what happens next is often very similar as described above as the fake online trading platform scam. 

The rule of thumb here is that if you have to send bitcoins to invest in something, it is probably a scam.

Scheme #3: The Romance Scam

Romance scams are a frequent occurrence on social media and dating apps, where individuals engage in relationships that are often conducted solely online and over long distances. In these scams, one party invests considerable effort to establish trust with the other before gradually persuading them to help them financially. Unfortunately, once the money has been transferred, the scammer typically vanishes, leaving the victim with financial losses. Such scams are also known as "pig butchering scams."

Scheme #4: The Judicial Threat

Scammers sometimes use judicial threats as a tactic to deceive and manipulate vulnerable individuals into paying money. One common scam involves contacting victims and claiming that they have been caught doing something illegal online, such as downloading copyrighted material or participating in illegal activities. The scammers then threaten the victim with arrest and imprisonment, unless they pay a fine or fee. Similarly, scammers may claim that the victim owes a significant amount of tax money and needs to pay immediately, or face legal consequences. These threats can be very convincing and intimidating, especially for those who are unfamiliar with the legal system, and scammers often use high-pressure tactics to coerce victims into paying. It's important to be aware of these scams and to always verify any claims made by someone demanding money or personal information.

Scheme #5: The Loan Scam

Beware of a cunning and prevalent scam that masquerades as instant loan offers, preying on those in dire financial need. The scam promises quick and easy access to loans but requires the unsuspecting borrower to make an upfront payment, usually in the form of an administrative fee or deposit. These fraudsters may ask you to send cryptocurrency, such as Bitcoin, to secure your loan, which appears as a small fee compared to the loan amount promised. However, once the payment is made, the loan vanishes into thin air, and you're left with a significant financial loss. Remember, legitimate lenders never demand upfront payments for loans, so always exercise caution and conduct thorough research before engaging with any loan provider to avoid falling victim to these deceptive schemes. Your financial security is too valuable to risk.

Scheme #6: The Fake Employer

Stay vigilant against the pernicious deception of fake employers peddling enticing job opportunities online. These scams may pose as legitimate job offers, promising substantial monthly incomes in exchange for a nominal upfront payment, often requested in the form of Bitcoin. The catch is that this fee is typically for access to supposed online marketing tools or to create a user profile. While the initial payment may seem insignificant compared to the promised financial gain, it's a sham. Once the payment is sent, these fraudulent employers vanish into the digital abyss, leaving you not with a job, but a significant loss. Genuine employers will never ask for payments to secure a job or access tools.

Always scrutinize employment opportunities diligently and be cautious of anything that appears too good to be true, as it likely is a scam designed to exploit your trust and financial resources. These so-called employers are never met physically, the job interviews are conducted online via platforms such as LinkedIn, Telegram, and WhatsApp. Your financial and professional well-being should never be compromised by these deceitful practices.

Bottom Line / Conclusion

In conclusion, preventing bitcoin frauds and scams requires being vigilant and aware of the various tactics that fraudsters and scammers use to prey on unsuspecting victims. From phishing emails and fake websites to Ponzi and other sophisticated schemes, the methods used by these individuals are constantly evolving to adapt to a wide array of victims. Furthermore, fraudsters may use psychological tactics to gain the trust of their victims or intimidate them into handing over their wealth. Therefore, it is crucial to exercise caution and conduct thorough research before sending bitcoins to anyone. Stay informed, stay alert, and above all, keep your bitcoins in your full control at all times.

Notwithstanding the adage that if something is too good to be true, it probably is, if you have even a shadow of a doubt and want to validate yourself, our team works hard to flush out frauds on a daily basis.  Hence, never hesitate to hit us up for some advice if you have any doubt that you are being or might get cheated. Although we can't always pronounce beyond doubt, we are still able to help detect the vast majority of scams.

Useful Online resources

If you think you’re a victim of a scam but are not sure what to do, you can visit the website of the 

(CAFC). The CAFC provides information on past and current scams affecting Canadians and provides guidance on what to do if you’re a victim of a scam, fraud or cybercrime.
Canadian Anti-Fraud Centre

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