Here are the Biggest Cryptocurrency Scams and How to Avoid Them

Here are the Biggest Cryptocurrency Scams and How to Avoid Them

The advancement of technology and social media have allowed humans to transfer the normality of their physical lives to online platforms. People have heavily relied on the ease and accessibility the Internet provides. They have changed their methods of working, shopping, and even paying for goods and services.

Consequently, consumers have now preferred cashless payments, which has urged companies to invest in new payment systems. A new money transfer network is barreling its way to accommodate clients securely: cryptocurrency.

Cryptocurrency, as its name suggests, is a virtual currency secured by cryptography. Developers craft their services on advanced computer science postulates, which prevent external manipulation to user transactions. Crypto has rendered users faster access to deals and international trades, with little to no transaction fees.

Bitcoin is known to be the first blockchain-based cryptocurrency. It was launched in 2009 by the anonymous Satoshi Nakamoto. Pioneer Bitcoin's success has birthed modern cryptocurrencies such as EOS, Ethereum, and Bitcoin SV.

Bitcoin Satoshi Vision (SV) emerged from the visions of the pseudonymous Bitcoin creator in 2018. The cryptocurrency aims to continue Bitcoin's original perceptions, offering cheaper and faster transactions, a larger scale for increased block volumes, a network with planned changes to ensure stability, and a miner-first mindset. It ranks fourth on the top 10 cryptocurrencies by market capitalization.

The success of Bitcoin SV and the like came with cryptocurrencies becoming mainstream. But while companies focus on cryptography technology development, evil minds have seen the popularity growth as an open door for elaborate scams.

Victims have already incurred billions worth of losses from these scams. Here are some of the biggest cryptocurrency scams to have made the news:

1. Onecoin

Onecoin's Ponzi scam has swindled over three million users. The Ponzi scam has also gathered something between $4.9 and 19.4 billion from victims.

However, blogs have warned readers that Onecoin does not operate as a legitimate decentralized cryptocurrency. It also does not have a public ledger that accounts for transactions and transparent reports. The Vietnamese government has disproved Onecoin's earlier claims of being licensed. Nations like Thailand and Norway have also warned of Onecoin's risks to interested investors.

2. Bitconnect

Bitconnect has discontinued its operations due to a cease-and-desist order for its Ponzi scheme. Famous YouTubers like Craig Grant have promoted the site through reference links. Because of similar promotions, the Ponzi scam gained around $3 million from users.

Due to promises of high money returns, users exchanged their Bitcoins for Bitconnect coins (BCC) on the platform. BCC users loaned coins to other users to gain interest, as promoted by the site.

3. Bitcoin Savings and Trust

Trevon Shavers, or Pirate, launched Bitcoin Savings and Trust (BST), initially named Pirate Savings and Trust. Shavers sold Bitcoins with guarantees of high returns and personal contracts, but in reality, Pirate was only paying back old investors with new Bitcoins from new investors. He also used some of the money in casinos, meals, rent, and cars. Pirate has accumulated almost $6 billion of conned money.

To avoid these big scams in the future, you will have to be wary of what to click and where to invest. Here are some of the common cryptocurrency scams and how to avoid them:


Scammers present alternative cryptocurrencies to users through apps they can download in Google Play and Apple Play Store. They lure users into concluding that it would be too late to invest in large companies; hence, they would find it to be more reasonable to spend on new cryptocurrencies that have the potential to outrun frontrunners.

App stores would eventually notice and resolve these fraud applications. But thousands of victims may have already fallen into the trap before they see.

To avoid downloading these apps, double-check the application's identity. The logo and branding the app presents should look professionally created. Misspellings are also red flags.


Malware and viruses have been a common way for hackers to get private information. Cryptocurrency scammers have also seen this as a way to draw unknowing victims. They defraud users into installing money through unintentional clicks on fake websites sent through emails or social media pop-ups.

Although scammers can easily manipulate emails, you can identify fake emails easily. You can cross-reference the email address to the official email of your trusted cryptocurrency company. If the logo profile and email address look identical, the cryptocurrency company has sent you a legitimate email.

Do not click on links that navigate you into another website. You can verify the message by sending another email to the company's official address. Otherwise, do not engage with such cryptic messages.

Ponzi Schemes

Ponzi scammers entice victims into investing money with the assurance of high returns. However, older users often just receive the money paid by the new users. Most scammers keep the money themselves.

People behind the screens are anonymous and can be full of deception. Thus, you should always be wary of the identities of advisors. Always remember to be skeptical and watch out for any obscure offers. You can ask for suggestions from peer investors. Invest in known cryptocurrencies since they are most likely to guarantee safe transactions.

Pump-and-dump Scams

Scammers overpromise with exaggerated claims. Once the stock has already provoked enough buyers, Pump-and-Dump con artists would sell their shares, dropping stock prices drastically and resulting in a loss for new investors.

You can protect yourself from these overhyped offers by assessing whether proposals are feasible or not. Technology and social media have their ways of spicing up promotions. So, you have to develop the ability to determine what is good-to-be-true or what is too-good-to-be-true.

The Takeaway

Cryptocurrency has allowed for easy payment for goods, with the reverence of technology in human lives. It provides faster, cheaper, and easier transactions and accessible international trades. Bitcoin has jumpstarted the growth of cryptocurrencies and spawned altcoins such as Bitcoin SV.

Despite its benefits, scammers have also found a way to jump on the trend. Large-scale scams, such as the Onecoin and Bitconnect Ponzi schemes, have swindled billions of dollars from careless victims. One must always be cautious so as not to fall into these fraudsters' clutches.


About the author

Kimmy Maclang

Kimmy Maclang

 Kimmy is an experienced content writer with a demonstrated history of working in the internet industry. She is an avid practitioner of cryptocurrency investing. When she is not writing, she spends time outdoors with her dogs or crochets.

Publication date: 
03/28/2021 - 20:15

The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.