Bitcoin Scams on Social Media: How to Spot Them and What to Do

Bitcoin scams are in the news. The growth of fraudulent behavior connected to cryptocurrency has risen substantially, particularly on social media. The social network Gab was completely taken down temporarily because a large number of accounts were posting bitcoin wallet scams. This problem is symptomatic of growth of bitcoin frauds on social media. 

Cryptocurrency represents exciting possibilities, but there are also many scams connected with digital currency to watch out for. Trader Defense Advisory experts will help you evaluate whether a bitcoin opportunity is legit or fake. If you have lost money to a bitcoin scam, contact TDA experts who are experienced in dealing with cryptocurrency scams and can help you seek redress for your claims. 

Why Are There So Many Scams Connected to Bitcoin? 

Bitcoin is a digital currency that does not have a physical equivalent in the form of coins or bills. It is not centrally regulated by a government but instead is managed through the blockchain. Transactions are anonymous and bitcoin is free from the usual regulations that accompany banking and trading. 

Bitcoin, though loosely regulated, is not dodgy or illegal. Many mainstream merchants accept bitcoin as payment and some legitimate brokers have cryptocurrency funds. However, it is an attractive vehicle for scam artists because the anonymity of the transactions provides cover for illegal behavior. This makes money laundering and even extortion easier. 

bitcoin transactions happen in a kind of a vacuum without a central authority regulating it. This means there is little recourse for those who have lost their money through bitcoin. Transactions done with bitcoin can be difficult to reverse, which can make customers and clients feel stuck. 

It may seem impossible to get money back from a bitcoin scam. However, experts at Trader Defense Advisory are experienced with cryptocurrency and have the tools and skills to unmask crypto scammers. Contact us if you have lost money in a bitcoin scam. 

Social Media Imposter Bitcoin Scams 

One common social media bitcoin scam is a hacker or imposter creating a fake account or hacking the actual account of a public figure and asking for fake donations of bitcoin in return for a doubled donation. 

This happened on a large scale in July of 2020 when a hacker, who turned out to be a teenager, hacked into the Twitter accounts of Elon Musk, Bill Gates, Kanye West, and Barack Obama asking its fans to donate with bitcoin and promising to double the amount to a major charity. Bill Gates’s account promised to give double back to the actual sender. 

It took a couple of hours for Twitter to contain the incident, although many of the accounts sent messages immediately that the tweet was not genuine. A total of $113,000 was taken, which was returned to users and the 17-year-old hacker was apprehended. Although the issue was resolved, it emphasizes how easy it is to mimic the tweets and posts of public figures. 

The takeaway from this incident is to avoid sending money if a public figure seems to be advocating a campaign. Usually, when celebrities start an initiative there is a news story or a press release. Check the news before sending any money, and send through an official donation platform, not social media. 

Fake Wallets and Platforms 

Along with actual bitcoin, many consumers purchase wallets, apps, and bitcoin trading platforms. Since these deal with your actual money in the form of bitcoin, it is essential to ensure they come from a reputable seller. A common bitcoin scam on social media is to post links selling apps and wallets. When people purchase them, their bitcoin is stolen by the people who sold them. 

Social media is a place people discuss every imaginable topic. They seek advice about everything from relationships to how to decorate their apartment to managing their money. Unfortunately, many scammers take advantage of this and market their fraudulent products on platforms such as Twitter, Facebook, and Instagram. Although the platforms try to stay ahead of these schemes, it is hard for them to put out every fire. 

Wallet and app scams when the user downloads them through a link on social media. This installs malware on the computer or device and robs them of data and their bitcoin. Sometimes the link itself will install the malware immediately without even pretending to be the service or app advertised. 

Bitcoin Blackmail

This scam sounds like something out of a thriller on Netflix, but unfortunately, it is all too real. It can happen with or without social media, but often these scammers find platforms like Facebook are more convenient ways to embarrass their victims. 

They will send a message by Facebook messenger or an email claiming they have hacked into their computer, have found compromising photos or documents, or filmed them visiting adult websites and will expose them on social media if they do not pay them a certain amount of money in bitcoin. 

In many cases, the claims that they have hacked into their computer and found compromising photos or filmed them is false. It is amazing, also, how many people end up paying these extortionists even though they know they have no compromising material. Still, they are worried about photoshop or deep fake videos and sometimes pay the bitcoin anyway. 

This is an example of negative reinforcement as a way of scamming people, instead of promising to make them tons of money in a phony investment. Fear, sadly, can often be a great motivator, even if the recipient knows the extortionist is probably bluffing. 

Bitcoin Investing Scams 

Like other investment scams, bitcoin investment scams have grown significantly in recent years. The SEC sounded the alarm about the increase in Ponzi schemes at the theft of investors’ money through false investments. 

Investing scams are often connected with Bitcoin flipping. These flippers take advantage of the fact that bitcoin transactions are hard to reverse. They often meet people on social media and start talking to them about a fantastic investment opportunity that is guaranteed to double their money. All they have to do is give them their bitcoin, and the other person will give them the dollar equivalent. 

Not surprisingly, the other person disappears without giving them the dollars. Another fake bitcoin investing scheme is a false ICO. Like an IPO or Initial Public Offering is a chance for people to invest in companies going public, an ICO or Initial Coin Offering is an opportunity to invest in a new type of cryptocurrency. The money is taken from investors, but the new currency never materializes. 

Social media is often the way communication of these fake opportunities takes place. Social media platforms have tried to clamp down on these fraudulent activities, but there is such a proliferation of them, the numbers can be hard to manage. Also, many bitcoin scam artists will strike up a conversation with someone on social media only to lead them off for more details about the scam via email or text. 

What to Do If You Have Lost Money on Bitcoin Scams on Social Media

If you have been the target of bitcoin phishing, a cryptocurrency investment scam or are dealing with an extortionist asking for bitcoin, contact Trader Defense Advisory. Our team of experts has vast combined experience dealing with cryptocurrency scams and advocate for our clients. Consult with us and we will create a claim and help you get started on the path to retrieving your funds.

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