Bitcoin Scams

As soon as a new technology emerges and becomes very profitable, the scammers begin to lick their lips. If that technology involves money transfers in any way, those scammers flock in their millions. Such is the case with Bitcoin. Every day millions of dollars are lost through Bitcoin scams, and in this guide we’ll look at the worst in 2018 and beyond.


This combines fraud and malware into one malicious, heartbreaking package and it has stung many millions of Americans in 2018.

Ransomware is the name given to a virus that immediately blocks a user from accessing their files as soon as it infects their computer. It encrypts them and then asks them to pay a ransom in order to get the password to decrypt.

How Ransomware Scams Work

The people who send out ransomware don’t choose single victims. They attach the software to files that are mass-mailed, hoping that someone will end up with an infected computer and that that person will pay the ransom.

They rely on the fact that many of us have not backed up our machines and have files that we can’t afford to lose, and in some cases they even infect the files that have been backed up.

How to Avoid Ransomware

Ransomware asks for payment in Bitcoin. Scammers like to use Bitcoin simply because it can not be traced. In some cases, they will release the passwords as they promised and you will get your files back, but in most cases they will not. And why would they? After you pay them they have what they want.

Not only that, but you have just been exposed as someone who is happy to pay scammers, which will make you a target. Your details will be placed on every hit-list and they will make your life a misery.

Just follow the old rules about avoiding viruses: never download anything unless you are 100% sure where it came from. You should also backup your files using external hard drives that are not connected at all times.

As for currently infected machines, you just have to face it—your data is lost. Reformat the drive, clear everything, and start a fresh.

Threats and Blackmail

Bitcoin Scam

These Bitcoin scams work in a similar way to the ransomware scams mentioned above. They rely on people being scared to lose something and they play on that fear, demanding money in the form of Bitcoins.

How These Scams Work

They begin by sending random letters out to people, claiming to know a secret or even openly mentioning that secret. They know that if they do this to 1,000 people then at least a few dozen will have the secret they have hinted at and will be at the peak of their paranoia about that secret.

Imagine someone who is cheating on their spouse and is starting to get paranoid that someone knows. Maybe they’ve just been out and about with their fling, maybe they just spent a night together. They then get an email from someone who claims to know they are having an affair and threatens to tell their spouse if they don’t pay.

How to Avoid These Scams

In some cases, it’s more than just a random scam and the scammer really does know and is singling that person out. But in all cases it’s blackmail and if you’re worried then get the police involved.

If you received an email, check to see if it was just sent to you or if it was also sent to others. If it’s a letter, check to see if it was actually addressed to you and not just “recipient” or something equally vague.

Common Bitcoin Scams in 2018

Bitcoin Scammers

Scammers really are working hard on fleecing Bitcoin users and we ran out of space long before we could cover all of them. But here are a few more major Bitcoin scams to be on the lookout for in 2018 and beyond.

Fake Cryptocurrencies

Scammers are cashing in on the cryptocurrency craze by launching all kinds of fake currencies. One of the most famous scams of this nature was My Big Coin, which is thought to have taken more than $6 million from its investors. In an unregulated industry such as this, these scams are common and there isn’t much that can be done about them. It’s the Wild West, and scammers are exploiting the gold rush.

Fake Exchanges

A coin exchange is where cryptocurrencies like Bitcoin are bought and sold. There are a few major ones that are legitimate like Coinbase, but there are also scams out there. One of these, based in South Korea, that is said to have taken millions.

Classic Scams

The untraceable nature of Bitcoins have made them a popular choice with all kinds of scammers. It’s not about Western Union, PayPal or even Venmo anymore, because they can leave paper trails, whereas Bitcoin can’t. Not all scammers will use it, but if you suddenly get a call from the IRS claiming that you need to send them Bitcoins to pay for a tax bill to avoid being arrested, you should know it’s probably a scam.

Actually, scrap the “probably”. It’s definitely a scam.

Fake Wallets

Bitcoin rely on the use of wallets. Each user has a unique wallet that is identified by a code, and this is how they can receive money. One of the Bitcoin scams common in 2018 is to offer free wallets that are actually fake, usually along with an incentive such as free Bitcoins. These are downloaded by people who are new to the currency, don’t understand quite how it works and simply want to get in on the action.

Once those fake wallets receive a certain amount of Bitcoins, they are cleared, with the money going to a real Bitcoin wallet owned by a scammer.

Fake Mining Services

Cryptocurrencies are “mined” into existence using advanced machines that constantly solve complex puzzles, using vast amounts of processing power in order to do so. Everybody wants in on the act because they see these services as an easy way to get Bitcoin and thus make money, and scammers have capitalized on this by offering all kinds of fake mining services, equipment and more.

They offer people the opportunity to get their own share of the spoils via subscriptions or by taking large amounts from investors who are expecting a significant return. This return never comes though, the victims lose their money and in many cases the scammers get away with it.