See The 5 Types Of Bitcoin Scams And How To Avoid Them

Bitcoin has seen increased adoption in the past few years. Unfortunately, while many of us are adopting digital assets and looking to accumulate more Bitcoin, some are seeing this as a way to rip people off their hard-earned money.

Scamming has become more prominent as the number of crypto users increase. In the past few years, there have been several successful bitcoin scams, so it is very important to be aware of the different ways in which these fraudsters work so you can take required precautions and reduce the risk of being scammed.

Where and how to buy bitcoin in Nigeria are some important factors you have to take cognizance of. There are several ways cybercriminals can take advantage of careless crypto enthusiasts.

It is quite inevitable that during your journey as a crypto trader or investor, you wouldn’t come across one or two attempts from scammers. However, being able to identify this at a glance and protect your funds is very vital.

Read about the crypto investment strategies that you can use to reverse some of your bad trading decisions.

Below are some of the bitcoin scams and how to avoid them.

Fake Exchanges

To buy or sell bitcoin you have to go through an exchange. There are hundreds of exchanges where you can trade your bitcoin. The likes of Remitano, Binance, and Coinbase are some of the reputable and secure exchanges to buy and sell bitcoin. However, many fake crypto exchanges are looking to accumulate user’s funds and do away with it. You have to be very careful as some of these exchanges are always disguised as real and reputable exchanges.

They lure crypto traders with exciting bonuses for creating an account with them and depositing money or even free bitcoins. Once you are attracted by the sweet offer and you invest in such an exchange, you have fallen into the trap.

You might get the bonus promised in your first deposit or investment and be pressured and enticed to invest more, however in the long run, attempts to withdraw your funds from such exchange will prove futile with different obstacles such as extremely high fees, hidden fees, and fake taxes. This will eventually lead to you losing the funds.

To avoid this kind of scam, it is important to always do some research about an exchange before deciding to buy BTC on it. Always buy your bitcoin on a well-known and reliable crypto trading platform like Remitano and do not be tempted by bonuses, discounts, and ROIs from random exchanges.


Phishing is a type of scam that involves social engineering via email. The attacker sends a fraudulent email to the victims to trick them into revealing personal information. In other cases, the attacker deploys malicious software to the victim’s device via email to collect sensitive information or even compromise their devices.

The attacker sends the mail with an address similar to a popular crypto exchange or wallet provider. The mail contains a link that redirects you to a clone website. These sites are always very similar to the ones you know. The site will mostly ask for sensitive details that will give them full access to your wallet. Once they get all the information they need to get into either your wallet or exchange, your funds are gone. They will hack into your account and steal your funds.

To avoid falling for this type of scam, always confirm the source of a mail before replying to it or taking any actions. Even if the mail appears to be from an exchange or wallet you registered with, always double-check. Also, you don’t have to follow mail links to access your account, go through the normal means to avoid issues. Don’t disclose private keys or log-in details on any site.

Fake ICOs

An initial coin offering (ICO) is a means that cryptocurrency projects use to raise funds. During the campaign, investors who believe in the project buy the token with crypto or fiat hoping that when the coin is finally launched it will yield great returns.

Scammers use this means to take advantage of individuals looking for the next big project. The exceptional price action of bitcoin has got many looking for the next crypto that will give amazing profits. Many people just jump on different projects without doing proper research about them. While some ICOs have yielded exceptional profits for investors, a lot have turned out to be scams. Once you invest in a fake ICO, you are not getting your investment back.

Sometimes the project might not be a scam, but the funds weren’t returned because the ICO wasn’t successful. Although some projects promise to refund people who participated, some eventually abscond with the funds.

To avoid falling for these kinds of scams, always research any project before trusting your funds with them. Read the whitepaper carefully, research the ICO team members and understand the project plan. Discuss such a project with the crypto community either in social media crypto groups or forums to know if it’s genuine.

Pump and dump

In this instance, an individual or group invests heavily in an altcoin especially coins with a low market cap to push the price up. This is done to attract several other buyers.

However, after the price has reached a certain point, the group behind the initial rise of the coin will withdraw their holdings at a higher price, and people who entered the market when the price was pumped will end up losing as the price of the asset will crash. This doesn’t sound like a scam, does it? As much as it isn’t considered a scam, lots of people have lost their funds to pump and dump.

Always research a coin before investing in it. Don’t just buy a coin because it experienced a sharp increase, check the news for any development that may have caused such an uptrend. Conduct fundamental analysis and technical analysis on such coins before buying.

Ponzi scheme

Ponzi schemes are one of the oldest forms of scam. People have lost millions of dollars to Ponzi schemes even before the advent of bitcoin. It could be argued that the popularity of bitcoin in Nigeria and Africa as a whole was driven by the MMM Ponzi scheme.

The MMM Ponzi scheme is one of the biggest scams that rocked Africa and it incorporated bitcoin as a means of payment.

In a Ponzi scheme, the person, group, or project behind the scheme promises investors great ROIs when they invest in their project and then invite a certain number of people to do the same.

Existing investors get paid with funds invested by new referrals and the cycle goes on. However after the project gains some ground and gets popular, the people behind the scheme cancel the scheme and abscond with the funds.

In conclusion, there are many other scams and tricks used by cybercriminals to take advantage of careless crypto traders and investors, so it is very important to always watch out and stay alert. When you want to buy bitcoin on a P2P exchange, always buy from reputable sellers with a good feedback rating.

SOURCE: Naijaloaded

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